Not Necessarily. I Could Be Arguing In My Spare Time

"... that cooperation must be of a certain kind in order to be effective. It must, for example, obey the principles of discourse ethics. Where there is no opportunity to challenge accepted hypotheses by criticizing the evidence upon which their acceptance was based, or the application of the norms of scientific inquiry to that evidence, or by offering rival hypotheses, and where questions and suggestions are systematically ignored, then the scientific enterprise always suffers. When relations among scientists become relations of hierarchy and dependence, or when scientists instrumentalize other scientists, again the scientific enterprise suffers." -- Hilary Putnam (1995).

Most mainstream teaching in economics has been known for generations to be some combination of incoherent, empirically false, and theoretically unfounded. A central problem posed by economics these days is to explain how and why so many economists persist for so long in promoting ignorance and error. Historians of ideas, philosophers of science, and sociologists might explore this issue; and some have.¹.

In some sense, we are not having a debate² on the correctness or not of particular theories or propositions in economics. Generally speaking, mainstream economists³ do not read the critical literature⁴, do not respond to it, and do not attempt to accurately represent it. I consider it rude to continually spout lies and nonsense, whatever tone one may adopt. In other words, mainstream economists are socialized to be unable and unwilling to conform to civilized discourse ethics⁵. Should those who talk about economists adopt a tone where they pretend that this is not so?⁶

Perhaps it distracts from my point to give examples of propositions mainstream economists refuse to teach. Nevertheless, I will briefly list some in micoeconomics⁷:

• Manufacturing firms do not face U-shaped cost curves⁸.
• Pricing for the output of such firms is explained by theories of administrative (also known as full-cost) prices.
• Wages and employment cannot be explained by the supply and demand for labor.
• People are not utility-maximizers⁹.
• Pareto optimization is not a value-neutral maxim for evaluating policy proposals.
• General equilibrium theory is not a description of a decentralized capitalist economy in which commodities are purchased and sold with and for money.
• Equilibrium prices are not indices of relative scarcity¹⁰.

Footnotes

1. Contemporary practitioners in these disciplines tend to be descriptive, not prescriptive.
2. Frederick Lee and Matias Vernengo, on one side, and David Colander, Richard Holt, and J. Barkley Rosser, on the other are having a debate. Their thesis, polemically stated is: Resolved: Heterodox economists should knowingly teach as fact and develop ideas that they believe to be false so as to have professional standing and an influential audience for the true propositions that they may be able to advance from time to time.
3. I can think of exceptions.
4. I am talking about more than the heterodox literature. Studies show that heterodox economists cite both heterodox and mainstream literature, while mainstream economists do not cite heterodox literature. But what is heterodox about Alan Kirman on the Sonnenschein-Mantel-Debreu theorem or Franklin Fisher on the stability of General Equilibrium? Those are merely two examples of mainstream critical literature that challenge broad categories of mainstream teaching.
5. Notice that Krugman adopted behavior in his debate with Keen that he rightfully castigates in the Republican party.
6. I can see how others may answer this question differently. A candid look at the history of economics might lead you to wonder how that will work out for you.
7. Benicourt and Guerrien (2008), Lee and Keen (2004), and Varoufakis (2011) are, to some extent, surveys of such mistakes. I want to remember to look up these lecture and slides from James Mirrlees.
8. Milton Friedman wrote his incoherent essay on method specifically to rule out the early empirical evidence on this point. Lawrence Boland published an essay in 1979 considering why mainstream textbook authors recommended the methodological approach of Friedman and ignored the many refutations in the literature.
9. I am sure that you can find some discussion in undergraduate textbooks of behavioral laboratory experiments. How has the take-up been on theories of divided minds and multiple selves?
10. Daniel Hausman wrote a book on the Cambridge Capital Controversy in 1981 that addresses my question. I remained amused by the mainstream ignorance of what the mainstream defense concluded in that supposed controversy.

Selected References

• Benicourt, Emmanuelle and Bernard Guerrien (2008). Is Anything Worth Keeping in Microeconomics? Review of Radical Political Economics, V. 40, N. 3 (Summer).
• Lee, Frederic S. and Steve Keen (2004). The Incoherent Emperor: A Heterodox Critique of Neoclassical Microeconomic Theory. Review of Social Economy, V. 62, N. 2 (June).
• Varoufakis, Yanis (2011). The Dance of the Meta-Axioms: On the Dynamic Mechanism by Which the Inescapable Theoretical Failures of Neoclassical Economics Reinforce Its Dominance.