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batista | 13 years ago
I'm talking about the assumptions about market efficiency and the supposed superiority of the mythical "free market" here.
Hayek, since you mentioned it, was a western "free market" lackey, imposing his dogmas on the Chilean people --and lots of others-- (and through a dictator at that), with dire consequences. This kind of "policy advice" is 80% percent catering to interests and 20% ideology. No more scientific than Stalinist economics.
A science doesn't need a dictator (or an elected official) to enforce that "earth is round" or "water will boil at 100 degrees under the right conditions".
Heck, even hard science fails when there are economic interests (e.g big pharma, releasing BS half-baked drugs, or physicists making big BS claims to get funding).
Economy is all, and solely, about economic interests, so all public (non academic) use and discourse of it is inextricably tied to those.
As for the "popular topics to study today", those, while interesting from a math/game theory standpoint, are turned to shit as soon as they enter the political / economic policy field.
On my 25 years of following the stuff, I've haven't seen anything but BS, special interests, spin, greed, failed predictions and bad advice on all fronts. Which is always touted as "scientific" and "based on state of the art models" by the policy advisors.
If you take out the "cater to special interests" bias factor, the rest of economists performance can be had with any random walk methodology.
yummyfajitas|13 years ago
Market efficiency and "superiority" (I have several incompatible ideas of what you mean here, but if you could clarify...) of an idealized free market are not assumptions. They are conclusions derived from much simpler assumptions.
Different conclusions can also be derived under different assumptions. For example, markets are "inferior" when distributing signalling goods (e.g. suits or educational certification), since this leads to wasteful arms races and overconsumption.
As I said, you should learn some economics before attempting to critique it.
A science doesn't need a dictator (or an elected official) to enforce that "earth is round" or "water will boil at 100 degrees under the right conditions".
I'm confused - apart from the fact that you (and Hayek, incidentally) don't like dictators, what are you trying to say here?
As for the "popular topics to study today", those, while interesting from a math/game theory standpoint, are turned to shit as soon as they enter the political / economic policy field.
This is the nature of politics.
batista|13 years ago
Well, highly debatable conclusions.
(As for what I meant, it's that I'm attacking both the idea of the EMH for financial markets, and the general belief in the superiority of the "free market capitalism", going back to the idea of the "invisible hand").
>I'm confused - apart from the fact that you (and Hayek, incidentally) don't like dictators, what are you trying to say here?
That a "science" that studies something _it itself creates_ through "policy advisory" and "legislation" is hardly a science.
Not to mention that it interprets it however fits those it is in ties with, or that its outcomes are more often than not directly inverse of the predicted ones, at which point they blame it on "not enough enforcement" etc, in a classic anti-falsifiability move.
As for Hayek not liking dictators, LOL.
>In 1978 he wrote to the London Times that he had “not been able to find a single person even in much maligned Chile who did not agree that personal freedom was much greater under Pinochet than it had been under Allende
(...)
For instance, Hayek—writing to The Times in 1978 and explicitly invoking Pinochet by name—noted that under certain “historical circumstances,” an authoritarian government may prove especially conducive to the long-run preservation of liberty: There are “many instances of authoritarian governments under which personal liberty was safer than under many democracies.”
http://coreyrobin.com/2012/07/08/hayek-von-pinochet/
Of course, his support to the regime is even worse and far more involved, utilizing it as way to fulfil his economic policy wet dreams. Yes, a great freedom loving guy, this Hayek.
>This is the nature of politics.*
And this is the role of economics and economists.
As for the academic part of economic research, when not done with specific political interests in mind and to support some specific monetary and financial policies, is as relevant as post-modernist gender-studies critical theory. That is, totally irrelevant.