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Sunday
Sep302018

RS 218 - Chris Auld on "Good and bad critiques of economics"

Release date: September 30th, 2018

Chris Auld

In this episode, economist Chris Auld describes some common criticisms of his field and why they're wrong. Julia and Chris also discuss whether there are any good critiques of the field, and whether economists think that people with an addiction to alcohol or drugs are behaving rationally.

Links 

"18 Signs You're Reading Bad Criticism of Economics" by Chris Auld

"The Price of Inequality" by Joseph E. Stiglitz

Edited by Brent Silk

Music by Miracles of Modern Science

Full Transcripts 

Reader Comments (5)

FOR RSPC 218

Firstly, people need to realize that economics constitutes a humanity, not a science. That way people can accept that economics makes tremendous approximations in its analysis.

Economists do in fact often serve the purposes of their powerful masters. A certain extremely prominent economist, name omitted, rated multiple Mortgage Backed Securities (MBS) and Collateralized Debt Obligations (CDO) as AAA, when clearly he should have rated them TOTAL JUNK (well below B). The clients of his employer benefited from the deceptively high ratings since they could sell more debt for higher prices. Then, after the 2008 Great Recession, that VERY SAME economist testified to the US Congress that bailing out state pension plans and banks, many of them clients of his employer and the customers of the clients of his employer, would have a much greater stimulus effect than cutting taxes and discharging mortgage debt !!

Someone should host a Chris Fuld vs Steve Keen debate !!

Interesting that people reduce tobacco consumption in advance of an announced increase in tobacco tax. Do companies increase capital expenditures in advance of an announced corporate tax cut ?
October 7, 2018 | Unregistered CommenterJameson
I would not dismiss Steve Keen's criticisms of economics offhandedly.

In reference to the empirical work that Fuld mentions, Keen's work models the economy very similarly to the neoclassical model but the underlying assumptions are different. He often compares it to Copernican heliocentrism in that the models that came before heliocentrism mostly predicted the same movements of heavenly bodies but erred in all the physical mechanisms. Economics differs because the data is noisier and fewer which makes alternative models of economics harder to prove.

I would not consider Steve Keen's criticisms to be outright strawmanning. Even though economists are well aware of the assumptions their models are based on, and how and when those models break down, they still believe that those assumptions have validity where Keen does not.

I believe that Steve Keen and other Post-Keynesians have ideas that are worth contending with, even though this group is surrounded by followers who simply endorse these ideas because of it's anti-establishment, socialist-leaning conclusions.
October 15, 2018 | Unregistered CommenterNguyen
Good episode. Julia, in it you used the phrase "people who should know better". It was used in a good question and had a clear meaning to me. I'm wondering how far the word "should" goes, when that phrase is being used properly? It is not exactly a person's fault if they do not know something, nor even if they have not thought it through themselves, see also "educate yourself". It's something about self-denial.

Does it have a specific definition for the rationalist community?
October 30, 2018 | Unregistered CommenterHamish Todd
Julia why don’t you bring Prof. Keen on your show to see what his responses are to this interview.
November 6, 2018 | Unregistered CommenterMark S.
Here is a recent interview with Prof. Keen

https://www.rt.com/shows/renegade-inc/438036-trump-us-war-crisis/
November 11, 2018 | Unregistered CommenterMark S.

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