Monday, July 26, 2010

Orthodox Economists As Knavish Lickspittles

Bill Mitchell says:
"The mainstream economists hide behind lies. Most of the time they claim their policy recommendations are derived from economic theory. The reality is that they are not and economists lie and obsfucate.

There are many situations where strident policy suggestions – like the austerity packages – cannot be based on the economic theory that they are associated with – on the theories that economists use to give an air of authority and legitimacy to what are otherwise demands based on their blind ideology.

Unfortunately, the public is not in a position to judge and get swamped by the arrogance of economists..."

The arrogance of orthodox economists plays out in many ways. Philip Mirowski, for example, notes:
"But economists could not begin to discuss the major difference between 1929 and 2008: this time around, professional economists had played a much larger role in producing the conditions leading to systemic breakdown, from theorizing the financial innovations and staffing the financial institutions to justifying the deconstruction of regulatory structures held over from the last Great Depression. The profession did not entirely succeed in distracting public attention from that fact, either." -- Philip Mirowski, "The Great Mortification: Economists’ Responses to the Crisis of 2007–(and counting)", The Hedgehog Review, (Summer 2010)

And there is the matter of funding of inconvenient researchers. So we see Mirowski writing, "My home institution declined to provide any support for this research." And Jacob Hacker and Paul Pierson write something similar:
"The authors received no financial support for the research and/or authorship of this article."

Greg Mankiw seems always willing to demonstrate that he is a varlet. In his post labeled, "The Root Cause of the Crisis", he kowtows to another fool:
"According to Raghu Rajan: Skill-biased technological change, followed by ill-advised policies."
If an economist were honest, he could hardly continue to cite skill-biased technological change as a cause income distribution in the United States.


Magpie said...

Frankly, I won't pretend I completely follow the nuances of the discussions taking place in this site. Thus, I can hardly contribute to them.

However, one doesn't need to be an economic genius to grasp the notion that people like Mankiw and Rajan have little idea of what is going on.

In fact, their "expert advice" is often evidently self-serving and counter productive.

I will not go on providing anecdotal evidence that the "masters of the universe" (in academe and outside) are quite often a bunch of incompetent morons. I am aware that this is not the kind of evidence used in scholar circles.

But anyone following the news can get a notion.

Good post and good selection of links!

Robert Vienneau said...

I was trying my hand at abuse in the post. But not being British, I couldn't come up with anythning as good as "drink-sodden ex-Trotskyist popinjay" or "like being savaged by a dead sheep".

Magpie said...

You might want to have a look at

Guide to being memorably rude (hint: Keating's a master)