Sunday, May 1, 2016


One of two excellent OP's on Neoliberalism by Corey Robin at Crooked Timber.

And within that, an assortment of riches in the comments, especially this comment by Bruce Wilder.  Example:

It doesn’t do any good, because the distilled version of mainstream economics that informs popular political discussion and rationalizes policy frameworks at a high level of abstraction — often called Econ 101, because it follows the introductory (and intermediate) college textbooks — maps out a theory that has few reliable referents in the world. Economic theory imagines an economy organized as a system of markets, coordinating activity with perfect numéraire prices and fairly complete information. It is a pretty good theory, capable of being rendered as an impressive axiomatic system and productive of considerable and valuable insight. Sometime in the 1950s, economics arrived at the conclusion that the actual economy could not possibly be like that for a variety of reasons, which can be summarized as uncertainty and bounded rationality. The traditional pedagogy of indoctrinating students in the theoretical system, while waving out the window as if the actual economy was like the imaginary world of theory, but just messier in mostly unspecified ways continued despite this result. The advanced research program in various subfields continued, with varying degrees of accommodation to reality, but the pedagogy remained paralyzed, while macro and policy economics have degenerated into a Dunning-Kruger combination of arrogance and ignorance.
That neoliberalism is the ideology of a managerial elite cadre that doesn’t want anyone to interfere with their self-serving complacency let alone looting and doesn’t want to be held responsible for results becomes a self-fulfilling prophecy in a way, since the underlying economics does not supply much in the way of practical wisdom or practical tools for that matter. When Krugman announces that IS / LM analysis — an 80 year old kludge that even its originator regards as fundamentally wrong-headed — provides a sufficient insight into what’s going on in the macroeconomy and with monetary policy, he’s defying others to parody him.
You cannot remain in this narrow space between Tyler Cowen and Krugman or DeLong and Mankiw and say or think much of anything that’s relevant to the 21st century problems of a globalized economy, climate change, resource exhaustion, overpopulation, or the Third Industrial Revolution of communication and computing.

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