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What economics can explain



Quora Answer : What are some contemporary economic theories contrary to the orthodox neoliberal view? How correct are these theories likely to be?

Aug 2, 2014

I think David Orrell's Economyths : How the Science of Complex Systems is Transforming Economic Thought is a valuable book. (So far, I'm about half-way through)

It's valuable because it lays out a series of challenges to orthodox neoliberal economics that you can make from a complex systems perspective. That is, that mainstream economics is built around traditional equilibrium models that need to make all sorts of simplistic (and incorrect) assumptions in order to get any of the results that underlie neoliberal or neoclassical policy prescriptions.

If you try to relax or remove those assumptions, the results don't hold any more. And most of the economic justifications for policies would evaporate too.

While the book lays out a very good agenda, it's probably a little bit too "pop" for many purposes. If you didn't know a bit about economics and complex systems already I'm not sure how much you'd learn from it. And many mainstream economists will probably carp that it's raising a straw-man version of what they believe. (Though I think that if they're honest, while they may not BELIEVE those simplistic assumptions, they should recognise that the kind of overall policy prescriptions that are often trotted out in the name of economic laws ARE justified in terms of these results.)

Quora Answer : Do left-wingers understand economics?

Jul 25, 2014

As most of the other answers here have said, some leftists do understand economics, some don't. And often to a degree.

The main difference with the right-wing, though, is that we see it as a tentative set of models and hypotheses about the world and NOT as an absolute religious truth which has been revealed to us. (By God or Mises)

Quora Answer : Why was economics called political economy in the past?

Jan 20, 2018

Economics, like most intellectual disciplines, was pioneered by, and spun-off from philosophy.

The earliest thinkers on economics were also philosophers and certainly political thinkers. People like Locke, Hume and Adam Smith.

Economics famously comes from the Greek word for managing the household. But the early economists were very much doing "political philosophy". They were asking about the management of the state. The responsibility of the king. The rights of the citizens. They were concerned with the wealth and welfare of the people. In light of that ancient philosophical concern "the good life".

Locke or Adam Smith would find it extraordinary to be told that he shouldn't be thinking about economics in conjunction with statecraft and ethics. Even as Smith proposed that self-interest could be harnessed to the greater good, he didn't assume that moral considerations should be discounted altogether.

What happened during the 19th century though, is that economics got, as we would put it today, "physics envy". The belief that to be really respectable it should ditch value judgements and focus on purely descriptive mathematical modelling of natural phenomena. So between the "marginal revolution" of the later 19th century through the mid 20th century, they declared that there was no objective notion of "value". Economics had nothing to say about the goodness or badness of people's economic arrangements. They were simply neutral observers of how particular economic constraints unfolded.

But this is a relatively recent development in economics. And given that economics is a science of the behaviour of (large number of) human beings, and human behaviour is something we will always make value judgements about, the line between economics and value judgement and politics is always going to be a bit permeable.