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« Happy 80th Birthday Leonard Liggio | Main | Is the Age of Economic Illusion Finally Coming to an End? »


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Rob Atkinson is a pain. Just a couple weeks ago he wrote a real sloppy response to a paper I had out of EPI that accused me and my co-authors of just trying to "advance an agenda of redistribution". I've got very similar analysis that's going to be published by the Cato Institute soon, so something tells me a desire for redistribution has little to do with it. You're exactly right - their principle concern here is their policy goals.

The list of myths is interesting... some of them are just plain wrong, but then the ones that make sense from the perspective of economic science are presented as if economists oppose them!

Why the contrast? They need a whipping boy and they've picked one.

I think complaints about Econ 101 not including more sophisticated treatments about topics than it does would be a lot more compelling if people weren't repeatedly making egregious mistakes that the "simplistic" analysis would catch.

As with most lists on the internet, I first glanced through the headers. Initially, I found myself remarkably in agreement, at least in part, with most of their points.

1. Economics is not a science in the way that I safely assumed they used the term "science". It is not physics. However, it is a science in the way Boettke and I use the term.

2. Efficiency, as used by many Samuelsonian economists, is greatly overplayed. Economists like McCloskey are right when they talk about virtues beyond prudence.

3. Institutions are important and looking at only the "market" in some perfect competition, equilibrium manner is of limited value.

And my reasoning continued for the rest...

The problem with Robert Atkinson and Michael Lind's analysis is not that economics is wrong, but that bad economics is wrong.

It seems to me that Atkinson and Lind are in most of their arguments attacking the mainstream neoclassical economics, which often claims the right thing, but for wrong reasons.

It really bugs me that they list "trade is win-win" as a myth. If the trade is between consenting individuals, it must be. That's just a tautology. They go off about international trade and China's industrial policy, but that's not what anyone means when they say that trade is win-win.

Sciences are defined by problems -- see Hayek, Darwin, Popper, etc.

Are we talking about economics as a science?

Then we are talking about the problem of design-like or plan-like order in the concatenation of millions of separate individual plans -- what is the underlying causal mechanism beneath this order and giving rise to it.

It is simply a mistake to say, "Economics is about human action in the face of scarcity".

Economists aren't going to make progress in understanding their science and in explaining it to others until that get the basics right.

The field is constantly challenged because economists continually get the basics of the science wrong -- in the very most basic casting of what the science is about and what it does.

The science provides a causal explanatory mechanism for the wealth-producing design-like order in the coordination of millions of individual plans.

Mistaking a logic of choice for the science is the beginning of confusion, not the beginning of answering econ-bashers like Atkinson and Lind.

There is a Chinese (I think) saying that a fool can ask more questions in an hour than a wise man can answer in a lifetime. This list reminds me of that. I would adjust it as: A fool can make more errors in a relatively short column than a wise man can correct in a lifetime.

The errors seem to be of two major kinds: (1) A&L often can't distinguish the general rule from the exceptions; (2) They do not realize that most economists do not take the idealizations of economic theory literally. These idealizations require a certain judgment to apply.

Complications of the basic model are important but often irrelevant to basic policy. And what's more: public choice considerations often spoil attempt to be subtle -- like counteracting foreign subsidies with domestic tariffs.

I'm afraid I have to disagree with your statement that "reality is not optional" in economics. Studying the various economic schools (from Austrian to post Keynesian) it's apparent that reality is at best selectively invoked depending on the argument being made.

I first learned this in college when I got the Marxist instructor for my first economics class. It bore little relationship to the intermediate class I took a few years later.

What is lacking in Atkinson and Lind's analysis is the basic appreciation that economics is about problems of coordination. So often in the teaching of economics, both in 101 and beyond, instructors really fail to communicate that economics proper is not about the level of GDP or employment in the economy, but rather about the chains of concatenation that create a spontaneous order permeating human action within the markets.

So, at the heart of the matter is a framing problem determining how we view the entire discipline. Is economics about understanding how the complex choreography of the markets emerges without a choreography? Or is it about providing people, especially policy-makers, with a tool box of techniques in order to manage certain measured quantities within society?

A bit of an exaggeration, perhaps. Nevertheless, I think the public's understanding of economics would be augmented if economics became primarily about appreciating and explaining catallactic order, with political considerations following at a distance.

I agree with Garrett Petersen. Attempting to argue that voluntary exchange is not mutually beneficial is like arguing that water flows uphill.

Winton and Garrett,

I'm going to try to channel Dan Klein.

I don't think we should neglect the qualifier that exchange is sure to be mutually beneficial
1) only in the sense of ex ante anticipations
2) only when both parties enter into the exchange freely, and
3) only if neither party misrepresents her product.

We should probably also note that it may well be unjust for one party to exploit the other party's ignorance of prices or other matters as with cabbies who overcharge, perhaps by taking a circuitous route.

The tautology about trade benefiting all traders is worth stating only because it helps your interlocutor to see that free trade (whether between persons, groups, or regions) tends generally, overall, by and large, to benefit all transactors ex post. It helps your interlocutor get over certain misapprehensions about trade, such as the common view that one party must win and the other loose. Whether trade really has the tendency to benefit all traders ex post is a broadly empirical question and not tautological.

I wrote a point by point reply here:

and a special on trade being win-win here:

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