
Post-crash economics: have we learnt nothing? - okket
https://www.nature.com/articles/d41586-018-06608-6
======
timwaagh
Such a shame nature lends it's name to this absolute drivel. There are
reasonable 'mainstream' explanations for the crash. I was fortunate to attend
a lecture at my alma mater on that. It had to do with insurance and the
difficulty of doing risk analysis and communicating this down the line. The
only thing she is right about is that economics is not as exact as physics.
But that should be taken as a sign to develop better numerical analysis
methods rather than to embrace 'that's just your opinion man' level bs. She
does not belong in science at all.

~~~
quotemstr
I agree. There's a case to be made that traditional macroeconomic models
should incorporate more of the findings of experimental microeconomics that
show how humans differ from idealized economic agents --- but this article is
not such a case. Instead, it's just postmodern ideological drivel that
suggests replacing numbers with advocacy, done under the guise of "ecological
economics" and "feminist economics" and emphasizing "the collective over the
individual".

This article in Nature is exactly the sort of dead weight that accumulates
during economic expansions and that we discard during economic contractions.
The article is a move in a tiresome academic status game. It is not useful for
describing, predicting, or governing society.

You see this nonsense in every part of academia. The worth of theory is its
predictive power, not its ideological purpose or its "values".

~~~
FabHK
I disagree. A traditional economics education is problematic: It naturally
(and ostensively ineluctably, from first principles by logical deduction)
leads to libertarianism.

> The worth of theory is its predictive power

Naive economics predicts that deregulation leads to higher welfare. That
prediction did not pan out.

James Kwak has elaborated on the above points in his book _Economism_ [1].

> It is not useful for describing, predicting, or governing society.

Well, governing society better is precisely what is at stake here. This
article might not be the best manifesto for reform of economics education, and
might have gone over board a bit with the more fashionable and silly
"<adjective> economics", but the fundamental point stands:

People that have taken traditional highly technical undergrad or even graduate
economics classes without further context in economic history, political
philosophy, etc. should not be left in charge of shaping policy.

[1] [https://economism.net](https://economism.net)

~~~
quotemstr
The author's proposal is neither necessary nor sufficient for educating the
next generation of leadership in philosophy. It sounds like you think it's
"problematic" if economists end up being libertarian. Why is that? Your point
about regulation is misplaced: both under- and over-regulation hurt welfare,
and there are many instances of regulatory loosening leading to better
outcomes, e.g. in cryptography and air travel. Is your position that
libetarianism is itself problematic and that education should stamp it out?

------
archgoon
This author doesn't really explain how their proposed additions to the
curriculum would have predicted the subprime mortgage crisis. If the author is
going to criticize mainstream economics for being irrelevant, it seems
reasonable that they show how using their methods, it could have been
predicted.

~~~
tirumaraiselvan
Isn't it better to not teach something that is wrong than teach something just
for the sake of teaching?

~~~
bjhoops1
If you're a hyper-wealthy property owner of the type who can afford to fund an
entire economics department, the answer is "no."

~~~
tomrod
So, outside some very obvious heterodox economics departments, I haven't seen
this. Do you have some examples mind?

------
fogetti
I think the author falsely assumes that academic economists and the people who
go on to work in big business, governments and central banks were not aware of
the shortcomings of their discipline. I would assume instead that they were.
But greed and power was their motivator nonetheless. So I wish good luck for
her but I don't think awareness will change the hunger for power or greed in
any way.

~~~
9mit3t2m9h9a
Probably so. At some point I won some maths-heavy economy textbooks in an
undergraduate probability theory competition. It was last updated a few years
before 2008 (I would guess no later than 2004), and it is mainstream enough to
be a gift agreed upon by large-finance sponsors and financial-applied
probability theory professors.

While explaining the market models, the book had quite a few footnotes that
briefly mentioned incentive structures at different levels (individual
traders, groups inside a company, mortgage-issuers that unload all of the
risk…) Sometimes it stayed politically correct («it remains to be seen how
this incentive structure will affect market stability»), sometimes not
(especially when there were enough historical examples of exactly the same
incentive structure leading to the same problems), but it made clear that
principal-agent problems in the then-current (and now-current) economy are
well-known and easy to describe in mainstream economics.

~~~
whycombinater
What book is that?

------
speedplane
Economics isn’t science. In science you have the scientific method, control
and experimental studies that can validate a hypothesis. that’s pretty
impractical to do as an economist. Economists often describe their field as
the study of human incentives, which is basically the study of human decision
making, which is basically reading minds. It’s a worthy subject of study, but
we put far too much faith in it that what’s warrented.

~~~
antt
What controls and experiments can you do in astronomy?

The scientific method is a thin veneer best left at in the high school
curriculum where it belongs. Actual science is vastly more messy and
interesting.

~~~
adrianN
You can figure out that there is no luminiferous aether between the planets
with an interferometer. You can observe that the light of distant stars is
bent by the sun's gravity during an eclipse. You can check that the planets
appear in the sky where your celestial mechanics predict them to be. You can
find out what elements the stars are made of with a prism.

There are lots of experiments you can do.

~~~
antt
The ether was a part of dynamics.

Elements in a star is part of chemistry.

The rest of those are not experiments, they are descriptions of natural
phenomena we have no power of repeating. Which goes to show that you can have
a science that does not have experiments but does have observations.

~~~
adrianN
We clearly have different definitions of "experiment". Having a theory (e.g.
light is affected by gravity), making a prediction (that star that should be
behind the sun will be visible) and then doing an observation fits my
definition of experiment. It's more difficult to reproduce that measuring the
speeds of falling apples, but eclipses are not _that_ rare and you can always
come up with other predictions from you theory and do the corresponding
observations.

I would rather argue that we can in fact do experiments in economics as well.
It's just harder to draw conclusions from the observations because there are
lots of variables you can't control for easily.

~~~
antt
>I would rather argue that we can in fact do experiments in economics as well.

Fair enough. At least you're consistent. My point was that economics should be
no less a science than astronomy.

------
elvinyung
There's a very large body of work in fields like critical economic geography
(as an extremely introductory and nonrepresentative example, [1][2]) that
discuss the affective, pluralistic dimensions to global and local economies,
of which I think orthodox economics barely touches on (slightly, somewhat, in
neuroeconomics).

I think this is really important. With a better understanding of the limits of
human rationality (which is chief among other things) we can begin to unravel
the original axioms and assumptions of the neoliberal era, the ones that
basically treat humans merely as selfish, individualistic, perfectly-rational
economic agents. With a better understanding of this, we can begin to build a
society for humans instead of capital.

[1]
[https://pdfs.semanticscholar.org/f10a/6bae34ac59c7be9b7741fe...](https://pdfs.semanticscholar.org/f10a/6bae34ac59c7be9b7741feef9c1566757caf.pdf)

[2]
[https://onlinelibrary.wiley.com/doi/abs/10.1002/978111838449...](https://onlinelibrary.wiley.com/doi/abs/10.1002/9781118384497.ch34)

~~~
bachmeier
> With a better understanding of the limits of human rationality (which is
> chief among other things) we can begin to unravel the original axioms and
> assumptions of the neoliberal era, the ones that basically treat humans
> merely as selfish, individualistic, perfectly-rational economic agents.

Your comment is the equivalent of saying astronomers need to consider models
in which the planets rotate around the sun.

Just as one bit of evidence, we can ask if anyone has ever been awarded the
Nobel Prize for studying the things you claim "economics barely touches on".
If someone received a Nobel Prize, the field hasn't "barely touched on" it.

2017: Richard Thaler for behavioral economics. His entire career has been
devoted to studying the limits of human rationality.

2013: Robert Shiller for his work showing financial markets are not efficient.

2002: Kahneman and Smith for using experiments to study the decision making
process.

2001: George Akerlof, whose Nobel Lecture included "Behavioral
Macroeconomics".

1978: Herbert Simon, the guy responsible for bounded rationality.

These are just a few names off the top of my head that won a Nobel Prize for
work that you say economists aren't doing.

~~~
elvinyung
But I think that precisely misses the point.

Yes, orthodox academic economics focuses very deeply on the psychology of
decision making, but it doesn't focus very broadly on all the other things I
mentioned. I love the work of Kahneman and Tversky (among others) as much as
anyone else, but I would still further argue that there's so much more to do,
that as far as I know, orthodox economics still mostly ignores other
components of society within which economics is imbricated, such as the
cultural (overviewed by the John Pickles paper I linked) and the affective
(e.g. the unremunerated emotional and affective labor that the author mentions
as integral to the functioning of the economy).

Can you argue that this is scope creep? Sure, but you can also go the other
way, and argue that any reductionism will always make the model inaccurate.
Striking a balance is obviously important here, but I would argue that it is
necessary at the very least to try widening the scope, at least a little bit.

------
bjhoops1
Golly, if I didn't know any better I'd think that maybe the field that deals
with questions of power and resource allocation might not actually be
apolitical, but may be primarily driven by the need to justify existing
distributions of power and resources.

~~~
tomrod
Economist here. I think you're mixing political science (power distribution +
more) with economics (efficient resource allocation + more). Happy to talk
more if you're interested.

~~~
neffy
You may or may not be fully cognisant of how your field is actually practised,
which the original commentator obviously is.

I have lost count of the times that senior people in your field, have happily
admitted how their research is targeted towards the desired outcome of its
funding source. Which the people funding the research are fully aware of, they
just go economist shopping for whatever result they want to back their policy
decisions.

The real issue with current economics isn't that it's not a science, it is
that it's not practised scientifically. Those who do look at the field
scientifically, have learnt a very great deal from the 2008 debacle - but
they're not getting published where anybody is going to read them. But that is
far from new. Let me present one of the great, sadly overlooked papers of your
field:

David Jones, Emerging problems with the Basel Capital Accord: Regulatory
capital arbitrage and related issues

[https://www.sciencedirect.com/science/article/pii/S037842669...](https://www.sciencedirect.com/science/article/pii/S0378426699000527)

Written by a researcher at the Federal Reserve in 2000, he pretty much nailed
the causes of the 2008 crash, at least 8 years in advance. His reward was that
he got to be part of the cleanup judging by his subsequent career - efficient
resource allocation indeed.

~~~
jeffreyrogers
I think you're overestimating the homogeneity of the field and underestimating
the degree to which most economists understand (and in many cases agree with)
the issues you're raising. Plus, finance is not the same is economics and you
seem to be conflating the two.

~~~
bjhoops1
Their definitely is a difference between academic economists vs the
"economists" who direct policy in the halls of power.

~~~
tomrod
Please name some individuals that come to mind.

~~~
FabHK
Not GP. Krugman frequently makes this point though, and highlights the
economic incompetence of Trump's "economists", eg here:

[https://www.nytimes.com/2017/10/23/opinion/federal-
reserve-j...](https://www.nytimes.com/2017/10/23/opinion/federal-reserve-john-
taylor.html)

[https://www.nytimes.com/2018/07/02/opinion/trump-trade-
war.h...](https://www.nytimes.com/2018/07/02/opinion/trump-trade-war.html)

------
quotemstr
The real lesson of the 2008 crash is that long periods of prosperity
inevitably produce an accumulation of poor investments, parasitic false
beliefs, and outright fraud. At first, the economy is strong enough to shrug
off the burden of this detritus, but it eventually accumulates and overwhelms
growth. We end up one day having a Minsky moment and clean up the crud
accumulated during the growth phase.

The best way to minimize the pain associated with this necessary process is to
commit to reason, empiricism, and truth during the growth phase, minimizing
the accumulation of uselessness that the eventual economic contraction must
discharge.

------
vertline3
We have known for hundreds of years that over expansion of debt causes
crashes. Maybe I'm missing the point, were economists supposed to stop the
expansion of debt?

------
projektfu
I liked her comment about mainstream economics' bias toward maximizing
"efficiency". It definitely felt like eliminating sources of "deadweight loss"
was the primary goal of introductory microeconomics. Nevertheless, most
societies today have substantial tax rates, suggesting that there are other
priorities than efficiency in the real world.

Interestingly, though, mainstream macroeconomics would probably have predicted
(and could have been used to prevent) the 2008 crisis if it had actually been
used. Instead, well-positioned economists supported policies that ignored the
rapid growth of a housing bubble and the fact that it was driving a
substantial portion of total economic output. I would not, for example, call
the analysis in Baker's 2002 paper [1] a heterodox analysis, indeed, it was
pretty mainstream. It was, however, contrary to the pronouncements of the
Federal Reserve.

1\. [http://cepr.net/publications/reports/the-run-up-in-home-
pric...](http://cepr.net/publications/reports/the-run-up-in-home-prices-is-it-
real-or-is-it-another-bubble)

------
throw2016
Mainstream macro economics is 'captured', and they have been behaving like
high priests justifying dubious policies. [1]

The 80s onwards have seen massive CEO pay increases, financialization, asset
inflation, deregulation, the vulgar celebration of greed by economists and on
the other side wage stagnation, increasing inequality, the 2008 crisis and
endless bailouts.

Greenspan and others are happy to gloat about cornering labour in Congress
[2]. This is an odious statement made without protest from members.

Macro economists can continue to be tone deaf and believe the narratives of
emh, rational expectations, 'freetrade' and 'assumptions' that are
disconnected from reality but there is now significant dissent and resistance
to these narratives. [3]

Evonomics is a good place to start getting a perspective of the scale of
problems, and people need to do this untill there is a complete meaculpa and
clean up of corporate and vested interests, untill then every single thing
macro economists say needs to be questioned and verified.

[1] [https://paulromer.net/wp-content/uploads/2016/09/WP-
Trouble....](https://paulromer.net/wp-content/uploads/2016/09/WP-Trouble.pdf)

[2]
[https://www.federalreserve.gov/boarddocs/hh/1997/february/te...](https://www.federalreserve.gov/boarddocs/hh/1997/february/testimony.htm)

[3] [http://evonomics.com/economyths-five-stages-economic-
grief/](http://evonomics.com/economyths-five-stages-economic-grief/)

------
your-nanny
The idea that economics is formulated as it is to protect the status quo, or
to justify the distribution of wealth and power is only partially correct.
Economists have a lot to say that elites do not want to hear. The political
class, in fact, routinely ignores economists' prescriptions, eg a carbon tax.

Instead, I would say that:

(1) on some issues there is a diversity of opinion among economists and so
people pick and choose their ecomist to justify their position

(2) non academic employed economists' pronouncements tend to reflect the
interests of their employers (for variety of reasons)

(3) as a class economists defend not the status quo but an ideology that
justifies that status quo. for example pareto optimal policies dont really
work out when distributions are already highly unequal.

------
montalbano
A good book written by members of the student society Maeve discusses here,
for those interested: 'The Econocracy' by Earle, Moran and Ward-Perkins

~~~
dredmorbius
Mentioned in TFA FWIW.

------
Dowwie
Sure, the world has learned hard to swallow truths that business media won't
adopt because it's not aligned with their narrative.

------
fouc
The crash wasn't really about economics, it was more about people abusing
financial instruments for short term gains. There would need to be some sort
of meta-field that combines economics, finance, banking, politics, etc to
properly analyze the cause/effect and predict this.

------
sgt101
I think a big problem is that economics - as defined by culture from the
enlightenment to about 1980, with markets created by locally rational
transactions - isn't as important as the culture that defined it made it to
be. For example, the market and the function of the market was seen as an
absolute / starting point for an economy. In China it was not possible to
simply establish a market, but instead what has happened is that the state
created pseudo private enterprises outside of a market system / in the absence
of a market system which then underpinned further economic activity. The
market of ideas - which is the construction that we put on democracy has been
further challenged. The Chinese government employs more than 50m people, and
this wide participation in a structured and hierarchical mechanistic system
provides another way of managing and legitimising capital allocation.

~~~
ElBarto
A functioning free market is the best system we've come with for capital
allocation and benefits to consumers.

Even China tends to create competing corporations and to let them compete. In
many industries they actually let private players create companies
independently.

~~~
GijsjanB
This is a rhetoric that is being repeated and repeated, but the simplification
renders it obsolete. In my opinion. What market is free? Who is your consumer?
What about ((yet) unforseen?) externalities? We've come up with a lot more
systems and are sticking with this "free" market one, but being technicians,
we know that more often than not, not the "best" system endures.

~~~
ElBarto
A functioning free market, or at least the best approximation that we can have
in practice, requires state intervention.

I think this is a crucial point that is too often overlooked.

Many people think that "free market" means no intervention. While this might
be the theoretical definitions, in practice that does not work and the system
degenerates.

If a good approximation of a functioning free market can be achieved then it
is indeed the best option we have.

~~~
sgt101
I think there is a choice element around "free" as well. I think functional
markets can be relatively free (and regulated) but they can also be not free
(closed to certain actors, structured with elements of compulsion) and yet
also be functional.

Efficient allocations are theoretical (in the sense of not computable within
the lifetime of the universe on a real machine) when you move past a handful
of actors and a handful of goods. Functional markets don't make efficient
allocations - they make allocations that the actors can sustain.

~~~
ElBarto
Free markets make efficient allocations in the sense that resources are
allocated to what is in demand and competition forces players to increase
their own efficiency.

Markets exist no matter what you do. Everything is a market.

~~~
sgt101
Markets are one mechanism for social regulation; there are many others. For
example it was common for rulers in past societies to bury large hordes of
treasure as offering to the gods. This was done not to store it, but because
it increased prestige while reducing actual power. This is not a market. Not
everything is a market and attempting to apply market mechanics to things
which are not markets (like relationships, education) is a major source of
inefficiency and unhappiness.

~~~
ElBarto
Everything is a market. Problems arise when this is ignored and, worse, when
rules are created that go against the market.

Education, for example, certainly is a market. Demand is high and all parents
try to get the best the can for their children, which creates an imbalance
between demand and supply for the best education. Where school places are
allocated according to catchment areas, houses prices immediately reflect the
value of certain schools. That's the market talking.

In the UK, there used to be "grammar schools", which were selective secondary
state schools. Most of them have been abolished but not all of them. Getting a
place means top free education. Result? Insane competition and huge industry
of private tuitions and training books that lockout the poorer. Again the
market is at play and tells us that a grammar school place is extremely
valuable.

Supply and demand, therefore markets, shape everything.

~~~
bjhoops1
Everything is NOT a market, that’s a profoundly ideological statement. Check
out Karl Polanyi and the distinction between a society with markets vs a
market society. We live in a market society, but that is a historically
unprecedented state of affairs - historically, many important aspects of
society were distributed and regulated through other social forms. It is
capitalism alone which commodifies everything under the sun, including land,
housing and labor. Many of the most awful aspects of our society are rooted in
this historic aberration and the creative destruction it brings with it.

~~~
sgt101
Specifically the interests of the unborn cannot be represented in a market.
The unborn have an interest in the use of resources and the exploitation of
the environment, and it is a legitimate moral interest, but they are not
market actors and their interests cannot be accounted for in a market
framework.

------
your-nanny
it's not that we haven't learned, it's just that the forgetting is so good.

------
travbrack
We learned nothing.

~~~
js8
Betteridge's Law of Headlines: No, we haven't learnt anything.

------
pdfernhout
Related from 2003 by Jim Sanford: "Confessions of a Recovering Economist"
[http://www.paecon.net/PAEReview/issue21/Stanford21.htm](http://www.paecon.net/PAEReview/issue21/Stanford21.htm)
"I am an economist. It is seventeen days since I last uttered the phrase
"supply and demand." But the demon still lurks untamed, within me. Economics
is an addiction. Every other addiction has a Twelve Step program, laced with
tough love and blunt self-honesty. Why not a Twelve Step program for
economists? God knows, we have done enough damage with our arrogant, drunken
prescriptions. Here's how each and every economist can face up to their inner
demons, and make their own small contribution to setting things right. ..."

From 2010: "They Did Their Homework (800 Years of It)"
[https://www.nytimes.com/2010/07/04/business/economy/04econ.h...](https://www.nytimes.com/2010/07/04/business/economy/04econ.html)
"But in the wake of the recent crisis, a few economists — like Professors
Reinhart and Rogoff, and other like-minded colleagues like Barry Eichengreen
and Alan Taylor — have been encouraging others in their field to look beyond
hermetically sealed theoretical models and into the historical record. “There
is so much inbredness in this profession,” says Ms. Reinhart. “They all read
the same sources. They all use the same data sets. They all talk to the same
people. There is endless extrapolation on extrapolation on extrapolation, and
for years that is what has been rewarded.”"

Or from 2011: "Economics for the Rest of Us: Debunking the Science That Makes
Life Dismal" by Moshe Adler
[https://www.goodreads.com/book/show/7197448-economics-for-
th...](https://www.goodreads.com/book/show/7197448-economics-for-the-rest-of-
us) "Why do contemporary economists consider food subsidies in starving
countries, rent control in rich cities, and health insurance everywhere
"inefficient"? Why do they feel that corporate executives deserve no less than
their multimillion-dollar "compensation" packages and workers no more than
their meager wages? Here is a lively and accessible debunking of the two
elements that make economics the "science" of the rich: the definition of what
is efficient and the theory of how wages are determined. The first is used to
justify the cruelest policies, the second grand larceny.Filled with lively
examples-from food riots in Indonesia to eminent domain in Connecticut and
everyone from Adam Smith to Jeremy Bentham to Larry Summers-Economics for the
Rest of Us shows how today's dominant economic theories evolved, how they
explicitly favor the rich over the poor, and why they're not the only or best
options. Written for anyone with an interest in understanding contemporary
economic thinking-and why it is dead wrong-Economics for the Rest of Us offers
a foundation for a fundamentally more just economic system."

Or harder hitting from a trial lawyer:
[http://conceptualguerilla.com/essays/essays-on-economics-
and...](http://conceptualguerilla.com/essays/essays-on-economics-and-
ideology/mythology-of-wealth/) "Old habits die hard. In fact, we still have a
“leisure class”. As capitalism has grown so has the wealth and privilege of
our leisure class. The old mythologies – gods, the “great chain of being” etc.
– are no longer available to justify the existence and perpetuation of our
leisure class, something our elites are definitely interested in perpetuating.
What was needed was a new “rational” world-view that justified the existence
of privileged elites. That rationalization came in the form of a brand new
science known as economics, which included a brand new mythology."

Or from 1999: "The Market as God" by Harvey Cox (Harvard professor of
religion): [https://www.theatlantic.com/magazine/archive/1999/03/the-
mar...](https://www.theatlantic.com/magazine/archive/1999/03/the-market-as-
god/306397/) "A few years ago a friend advised me that if I wanted to know
what was going on in the real world, I should read the business pages.
Although my lifelong interest has been in the study of religion, I am always
willing to expand my horizons; so I took the advice, vaguely fearful that I
would have to cope with a new and baffling vocabulary. Instead I was surprised
to discover that most of the concepts I ran across were quite familiar.
Expecting a terra incognita, I found myself instead in the land of déjà vu.
The lexicon of The Wall Street Journal and the business sections of Time and
Newsweek turned out to bear a striking resemblance to Genesis, the Epistle to
the Romans, and Saint Augustine's City of God. Behind descriptions of market
reforms, monetary policy, and the convolutions of the Dow, I gradually made
out the pieces of a grand narrative about the inner meaning of human history,
why things had gone wrong, and how to put them right. Theologians call these
myths of origin, legends of the fall, and doctrines of sin and redemption. But
here they were again, and in only thin disguise: chronicles about the creation
of wealth, the seductive temptations of statism, captivity to faceless
economic cycles, and, ultimately, salvation through the advent of free
markets, with a small dose of ascetic belt tightening along the way,
especially for the East Asian economies."

See also: "The Impact of Inequality: How to Make Sick Societies Healthier" by
Richard G. Wilkinson

And: "The Spirit Level: Why Greater Equality Makes Societies Stronger" by
Richard Wilkinson and Kate Pickett

And: "The Price of Inequality" by Joseph E. Stiglitz

Another petition/manifesto by students from 2009: "The True Cost Economics
Manifesto" [https://blog.p2pfoundation.net/the-true-cost-economics-
manif...](https://blog.p2pfoundation.net/the-true-cost-economics-
manifesto/2009/08/09) "“We, the Undersigned, make this accusation: that you,
the teachers of neoclassical economics and the students that you graduate,
have perpetuated a gigantic fraud upon the world. You claim to work in a pure
science of formula and law, but yours is a social science, with all the
fragility and uncertainty that this entails. We accuse you of pretending to be
what you are not. You hide in your offices, protected by your mathematical
jargon, while in the real world, forests vanish, species perish and human
lives are callously destroyed. We accuse you of gross negligence in the
management of our planetary household. ..."

There is at least one other petition I saw from around then (though with
softer words) mainly by economics professors and grad students -- can't find
it at the moment.

Or to go way, way back, see Marshall Sahlins:
[http://www.primitivism.com/original-
affluent.htm](http://www.primitivism.com/original-affluent.htm) "Hunter-
gatherers consume less energy per capita per year than any other group of
human beings. Yet when you come to examine it the original affluent society
was none other than the hunter's -- in which all the people's material wants
were easily satisfied. To accept that hunters are affluent is therefore to
recognise that the present human condition of man slaving to bridge the gap
between his unlimited wants and his insufficient means is a tragedy of modern
times. ... The world's most primitive people have few possessions. but they
are not poor. Poverty is not a certain small amount of goods, nor is it just a
relation between means and ends; above all it is a relation between people.
Poverty is a social status. As such it is the invention of civilisation. It
has grown with civilisation, at once as an invidious distinction between
classes and more importantly as a tributary relation that can render agrarian
peasants more susceptible to natural catastrophes than any winter camp of
Alaskan Eskimo."

Even in the 1980s when I was in college it was clear to many that much of
economics was, essentially, am apologetic branch of mathematics with little
connection to the real world. My own take on that from around 2008:
[https://pdfernhout.net/post-scarcity-
princeton.html#Some_com...](https://pdfernhout.net/post-scarcity-
princeton.html#Some_comments_on_the_PU_Economics_department_and_related_research_directions_from_a_post-
scarcity_perspective)

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skookumchuck
Economists can't even agree on what caused the Great Depression.

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kebman
Wow, what Socialist crap that article is, and in Nature of all things!
Probably best to steer clear of those books on economy! Anyway, if you look
into how trading is done today, and how big firms – especially banks – are
allowed to operate, then it's no wonder it goes as it goes. First off no
company should be too big to fail. That should be your first warning sign that
it's become too oligarchic, if not completely monopolistic. But no, most
governments chose to go in the opposite direction, and further corporatize and
monopolize the behemots. Well, good luck with that! Now we're probably just
moments before the biggest crash in history. People talk about 2008 being this
century's 1929. Ha! That was peanuts!

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thanatropism
The author's true colors come out when he rails for post-Keynesian economics
as an alternative worth studying.

As much as economics ("mainstream" or "orthodox economics" is an expression
like "allopathic medicine") is a struggling pre-science that has just in the
90s begun to adopt RCTs, etc -- the alternative these people are saying is
snake oil. "Post Keynesian economics" isn't even trying -- it's just a
justification for the kind of irrationally exuberant policies that caused 2008
in first place.

