Bill Black: Greg Mankiw’s Unprincipled Economics Indoctrination

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Yves here. Lest you mistakenly think that Black is caviling about some minor issues in this post, he’s actually focusing on the core of what is wrong with economics. Greg Mankiw effectively admits that economics is really about learning how to “think like an economist” and that that process is so removed from notions of rigor, verification, and completeness (as in explanatory power) as to amount t indoctrination. Steve Keen makes the same point, longer-form, in his book Debunking Economics. He explains that undergraduate economics students are taught to accept both overly reductive models and a circumscribed set of mathematical techniques, and are told that if these simplifications will be explained and legitimated in graduate school. But Keen points out that economics as a discipline rejects the more demanding mathematical techniques that would better characterize economic phenomena, in part because more accurate modeling would not be tractable, as in would not produce tidy (and only randomly correct when you get out past six months) predictions and policy recommendations that give economists a seat at the policy table. And when graduate students are finally told of the qualifications and exceptions to what they’ve been taught for years, most are too deeply inculcated to embrace the implications, which would be to reject a lot of their prior instruction.

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Jointly published with New Economic Perspectives

In this first installment I discuss the unacknowledged contradiction that lies at the core of the two meta-myths in the preface to N. Gregory Mankiw’s textbooks. Mankiw is among the leading providers of introductory economics textbooks. In his preface to these volumes he preaches his first meta-myth in his first substantive sentence about economics.

Economics combines the virtues of politics and science. It is, truly, a social science. Its subject matter is society–how people choose to lead their lives and how they interact with one another. But it approaches its subject with the dispassion of a science.

As it is preached by Mankiw, theoclassical economics is a dogma that repeatedly violates the most basic tenets of science. It is unlikely that many scientists approach their work with “dispassion” – passion is one of the keys to success in many humans – but theoclassical economists routinely fail to bring dispassion to their dogmas. Indeed, the first step in their adoption of the scientific method would be to renounce Mankiw’s first meta-myth.

Mankiw’s preaches his second meta-myth in the next paragraph of his preface.

Economics is a subject in which a little knowledge goes a long way. (The same cannot be said, for instance, of the study of physics or the Japanese language.) Economists have a unique way of viewing the world, much of which can be taught in one or two semesters. My goal in this book is to transmit this way of thinking to the widest possible audience and to convince readers that it illuminates much about the world around them.

Mankiw does not see the fundamental contradiction between his two meta-myths. It turns out in his second meta-myth that learning economics is not really like learning a real science or even a language. A “little knowledge” supposedly “goes a long way” in economics, unlike physics or learning Japanese. What explains this paradox? How is it possible for a subject as massively complicated as economic life, much less all the fields such as the family that theoclassical economists now purport to study and devise proper public policies, that a brief introduction in a freshman course “goes a long way” to actually understanding proper policy choices in such enormous spheres of life?

Mankiw’s does not understand how revealing his answer is to this paradox. He actually preaches that economists are “unique.” The sheer arrogance of the claim – offered with no proof or analysis – is staggering. But the claim is also hilarious in context, for Mankiw purports to be explaining why economics exemplifies the scientific method. Mankiw has just got done assuring the reader that “science was analytic, systematic, and objective.” How is it, then, that economists are “unique” among scientists? I can assure readers that economists are not taught some secret hand shake or statistical technique and are not secretly selected based on unique genomes. Mankiw is making the opposite point – claiming that in two semesters of studying his “Ten Principles of Economics” he can turn your 18-year old freshman son or daughter into someone who will “think like an economist.” Mankiw fails to understand that this means that economists cannot be “unique.” Mankiw teaches his ten commandments to anybody’s son or daughter regardless of whether they will become an economist, political scientist, physicist, or student of Japanese language and literature. Even if economics had some unique “secret sauce” they would have given away the recipe many decades ago.

But consider the bizarreness of Mankiw believing that economists all “think” the same way. Recall that the way he claims we think is not a result of our studying and believing in the scientific method – for then we would not be “unique” – we would simply be like all good scientists. Mankiw is asserting that all economists share the same belief systems (creed). Indeed, if you do not share his dogmas – his interpretation of his ten commandments – you cannot be a “real” economist. Lots of professors believe they are demi-gods, but few go so far as Mankiw in drawing up his own ten commandments and then claiming that economists are unique because they all worship Mankiw’s commandments. Recall that this is in the context of Mankiw preaching his first meta-myth that economists approach their field with pure “dispassion” as a “science.”

Economists are unique among scientists in the frequency, severity, and persistence of their errors. No other field has such a disastrous series of predictive failures in modern times. No other field gives Nobel awards to economists for preaching critical policy issues and predictions that have proved dead wrong. Conventional economists claim that they should be judged on the basis of their predictive success.

Economists are unusual, but not unique, in their frequency of scoring low in altruism. Part of this is self-selection. Students who choose to study economics score lower in altruism. There also appear to be learning effects. After they major in economics students score even lower in altruism. The ways that economists are unique, or at least statistically unusual, reflect badly on economists and economics. Mankiw is a leading contributor to what makes theoclassical economics so dogmatic, false, and immoral.


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  1. Enquiring Mind

    How I wish that Bill Black and Steve Keen had been writing during my undergraduate days! Economics as taught back in the dark ages just didn’t seem intuitively correct, but pointing out any inconsistencies got one shouted down. I thought that there was too much of the “assume a can opener” stuff going on.

    1. diptherio

      Agreed. If I wasn’t so intellectually arrogant as a young man, I probably would have bought into the BS, since practically all my professors seemed to believe it. As things stand, I just wrote off the discipline after my BA, as I couldn’t stand the thought of spending a career surrounded by willfully ignorant pseudo-scientists.

      1. art guerrilla

        even my econ 101 class was problematic: i was always baffled by ALL the ‘externalities’ that were unaccounted for… it seemed to me, the ‘externalities’ were the important shit, and all the economic theory handwavium was bullshit…

    2. PlutoniumKun

      Indeed. I did undergraduate economics back in the 1980’s. I wasn’t smart enough to understand the reasons, but I instinctively knew that what I was being taught made little sense in the real world, not least because a little probing revealed that there was little objective evidence to back up many of the ‘facts’ presented. I suppose I was fortunate to have a Prof who was openly uncertain about whether macro models had any bearing on reality (probably the reason he stayed an academic and didn’t make more money on the consultancy/media punditry round, unlike some of his wealthier colleagues). And several of the econometric tutors shared their black humour about how objectively useless many of the techniques they taught actually were.

      The only part of the course that made any sense to me was economic history – at least it seemed to me that there were actual relevant lessons there. I couldn’t help noticing of course that there seemed an enormous gap between what many of the more interesting economists of the past said and what was actually on standard undergraduate textbooks. I distracted myself by reading up on some of the past dissenters (like Veblen or Henry George) and ended up with a very mediocre degree. In many ways I’m glad I wasn’t ‘good’ enough at it to pursue it at post graduate level or I might have been spoiled completely. But it still took years of reading to realise just how cynical the intellectual misdirection was and remains.

      1. Nathanael

        They generally start Econ 101 by talking about “Comparative Advantage”.

        The theory of comparative advantage is false. There is ample evidence that it is false and no evidence whatsoever in favor of it. Yet this is usually the first example of an economic theory and it is trotted out as if it is true.

        The books tend to go on from there with more utter tripe. Microeconomics is much worse than macroeconomics in this regard; the “theory of the firm” was blatant nonsense, as I noted on every single homework assignment for about half a semester. (Every answer I gave went something like, “According to the incorrect theory in use, XXX. In actual fact, the firm would be advertising.”) They actually *leave out advertising and marketing*, which is a first-order effect. I asked what course they covered that in, and the answer was that it wasn’t even mandatory in the graduate curriculum, let alone the undergradute curriculum, at which point I said “So you’re saying all of microeconomics is unrealistic garbage, you realize that?” The professor didn’t appreciate that.

        Classical microeconomics is the theory of coal mining and sales; it works OK for coal, and also for iron ore and a few other minerals. It does not apply to anything else.

  2. Downpuppy

    A few simple concepts – match the units, conservation of charge, energy, mass & momentum, Newton’s laws, the inverse square rule – cover all the physics most anyone needs.

    1. Synoia

      Nah. Not even close. levers, pulleys, gears, materials, solid, liquid, gas, heat, melting, freezing, boiling, impact, velocity, acceleration, distance, displacement, non Newtonian fluid to name but a few.

      1. TheCatSaid

        Wilbert Smith’s 2 recorded talks from 1957 and 1958 make it clear that there is far more to be explored than the particular limb of the “physics branch” on which we have so far focused.

    1. Minnie Mouse

      As a former physics major I never had a formal economics course at all. My first lesson in economics was graduation into a major STEM depression. It is amazing what a corrupt fraudulent pseudo science dedicated to unsafe systems engineering practice can accomplish.

    2. Nik

      Georgescu-Roegen? Although he had a fair case of it himself. I would say that the issue today is not an envy of all of physics, but envy in particular of mechanics, and the fetishization of the economy as always behaving like a predictable, complicated-but-not-complex machine.

      1. JustAnObserver

        In physics terms, of course, the notion of predicatbility at the small scale was shot down by a certain Dr. M. Plank and his small band of followers.

        Dr. H. Poincare did the same hatchet job on the notion that the trajectories of large scale interacting systems could be predicted beyond the short term with the beginnings of dynamical systems theory (aka chaos theory by journalists).

        Economics – envying the physics of 100+ years ago.

        1. clinical wasteman

          Yes x 100! (One affirmation for each year?)
          And by way of analogy (they started it!), headline-grabbing ‘bio-philosophy’ (as in the recent link here on the revelation that ‘our perception is not quite the same as the thing perceived!’, or Dawkins passim) is — at best — a Fan Fiction tribute to Kantian epistemology.

  3. Jerry Hamrick

    I have tried to understand economics. I have taken a class, I have read a few books, including Paul Krugman’s 940-page textbook, and it just does not make sense to me. Max Tegmark is from Denmark, and like many of us he made a stab at picking a career when he graduated from high school. Here is what he wrote:

    When the time came to apply for college, I decided against physics and other technical fields, and ended up at the Stockholm School of Economics, focusing on environmental issues. I wanted to do my small part to make our planet a better place, and felt that the main problem wasn’t that we lacked technical solutions, but that we didn’t properly use the technology we had. I figured that the best way to affect people’s behavior was through their wallets, and was intrigued by the idea of creating economic incentives that aligned individual egoism with the common good.

    Alas, I soon grew disillusioned, concluding that economics was largely a form of intellectual prostitution where you got rewarded for saying what the powers that be wanted to hear. Whatever a politician wanted to do, he or she could find an economist as advisor who had argued for doing precisely that. Franklin D. Roosevelt wanted to increase government spending, so he listened to John Maynard Keynes, whereas Ronald Reagan wanted to decrease government spending, so he listened to Milton Friedman.

    Tegmark decided to become a physicist and is author or coauthor of more than two hundred technical papers, twelve of which have been cited more than five hundred times. He holds a Ph.D. from the University of California, Berkeley, and is a physics professor at MIT. I applaud Tegmark’s wish to make “our planet a better place,” and I agree with his description of economics as being “a form of intellectual prostitution.” I wish I had thought of it.

    Another scientist, more famous than Tegmark, was Albert Einstein. He shared Tegmark’s wish to make the world a better place, and he believed that the economic scourge of capitalism produced more evil than good. He was inclined toward socialism which is a dirty word in America today, but based on my reading of his views I think he was more inclined toward any system that worked for the common good. In any case, he wondered if the field of economics would be useful in designing a government of the future. In 1949 he wrote:

    Let us first consider the question from the point of view of scientific knowledge. It might appear that there are no essential methodological differences between astronomy and economics: scientists in both fields attempt to discover laws of general acceptability for a circumscribed group of phenomena in order to make the interconnection of these phenomena as clearly understandable as possible. But in reality such methodological differences do exist. The discovery of general laws in the field of economics is made difficult by the circumstance that observed economic phenomena are often affected by many factors which are very hard to evaluate separately. Economic science in its present state can throw little light on the socialist society of the future.

    There is nothing more to say.

    1. Antece

      Two anecdotes: Economists I personally know write academic papers by first deciding on the conclusion they want, and then they choose the model in such a way to give the desired answer. Second, reading is illuminating about the mindset of current economics PhD students — their interest in the field seems to be about the outsized salary and lifestyle enabled by a faculty career in economics. (Faculty salaries in economics are often amongst the highest at universities, higher than STEM faculty — perhaps a reward for espousing the right views.)

  4. paul whalen

    Why is it at all a revelation that a sociopathic religion, capitalism, produces socipathic acolytes and idealogues?

  5. Fledermaus

    It is amusing the way economists like to call themselves rebels, freaks, and outsiders. When was the last time you heard of a rebel mathematician or a freak chemist?

    1. tlonuk

      Well, Grigory Perelman might qualify as a rebel: he did not accept neither the Fields Medal nor the Millenium Prize.
      But, on the contrary of economists, he did not claim himself as a rebel: he rejected those prizes on moral grounds.
      Another example of a rebel mathematician is the Unabomber, who went a long way in the rebel thing, acting instead of proclaiming.
      So, you have a case, rebel posture is not common in mathematics, it is real or nothing.

      1. Jim

        Double negative. It’s – “did not accept either ..or” or “accepted neither …nor”.

      2. Jim

        Perelman is not really a rebel, just weird. The Unabomber was a loner but Catalan was more of a professional revolutionary.

        1. clinical wasteman

          Ok, you were referring to a person, not the language (or the adjective from ‘Catalunya’). Pardon my ignorance (I mean it, it’s embarrassing), but a first name would be helpful for those of us yet to learn about this ‘professional revolutionary’. Because otherwise imagine trying to duckduckgo that.

  6. nat scientist

    “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”
    –Henry Hazlitt

    Professor Mankiw is more interested in ignoring the consequences that cross his political co-nonscientists. Very social, not reproducible except the pain to the unfavored tribe.

    1. Synoia

      The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups

      Which is defeated completely by Chaos Theory (as described above).

      Economics predicts the future with the same accuracy as Chrystal Ball Gazing, and Economists have no Chrystal Balls.

      1. nat scientist

        Chaos theory is the field of study in mathematics that studies the behavior of dynamical systems that are highly sensitive to initial conditions—a response popularly referred to as the butterfly effect.

        “completely defeated” what? The study of the effects to reflect on future projections is not to predict to manage the risks of repeating some set of practice or change after such reflections.
        Crystals have no balls inside or outside the theatre of your mind. It clearly takes only the thought of a butterfly wing to set you off and announce a rout. Bravo, quo vadis.

  7. Jason

    The “Nobel Prize in Economics” isn’t actually a Nobel Prize. It was created in 1968 by Sweden’s central bank. In return for a donation to the Nobel Foundation it is presented alongside the actual Nobel Prizes. It’s full title is the, “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel”.

    On the Sveriges Riksbank’s page on it, they don’t even call it a Nobel Prize.

  8. Eric

    An anecdote which might be of interest here:

    I teach economics at a community college just outside of Chicago. At the beginning of this semester I was told that my students would have to take an online assessment to determine if they’ve learned the basics of macroeconomics. Now, putting aside the idiocy of having an online assessment consisting of very easy questions that they can take at their leisure, the reason I’m mentioning this is because the questions were all based on Mankiw’s introductory textbook, which I categorically refuse to use. (This past semester I tried the new CORE e-book, which is exponentially better.) Some of the questions are fine, just asking about the basic definition of GDP and such. But, not surprisingly, some are nauseatingly awful. A sample of just two:

    Question: When a government budget deficit crowds out investment….
    “Correct” Answer: it reduces the growth of productivity and GDP

    Question: The minimum-wage law among the least skilled and experienced of the labor force states that…
    “Correct” Answer: if the wage is kept above the equilibrium level for any reason, the result is unemployment.

    By the way, when my students received an email telling them about this assessment, most asked me about it first. I told them to ignore it, because, seriously, fuck that shit. And then explained why Mankiw’s book is propaganda, not economics.

    1. Nathanael

      I think you should quite explicitly talk to whoever came up with this “assessment” and point out that it’s full of false material which is known within the field to be false. Violations of academic standards.

  9. KYrocky

    As an undergraduate I took a course, Introduction to Comparative Religion, and a few of the students could not tolerate any discussion which they perceived as contradicting their particular Christian faith. The firm beliefs did not, in fact, allow them to do comparisons. Economics, as taught by Mankiw and others, is taught as a belief. Becoming a successful economist, in America at least, precludes comparative thinking, and is more analogous to becoming a priest, or a political zealot.

  10. Bryan Snyder

    Greg Mankiw’s Macro text has the distinct honor of being the only text that I have physically thrown across a lecture hall and into a wall……in disgust……….. to great theatrical effect. It is a welcome rite of the beginning of each academic year when his undergraduate students walk out of his classes in a similar dyspeptic state.

  11. James McFadden

    Yves – great summary of Keen’s book – highly recommended for people who tune into this site.

  12. TK421

    A little learning can be a good thing; teach someone the laws of thermodynamics or how to say “thank you” in Japanes and you have enriched their life and broadened the situations they can navigate successfully. But so much of the “learning” in economics is junk–“people always act in their own best interests” or “people always have every piece of information they need to make a decision”, for instance. If the foundation stones are so weak, God help anything built upon them.

    1. jack

      First Law of Thermodynamics: “You can’t win.”
      Second Law of Thermodynamics: “You can’t break even, either.”

        1. clinical wasteman

          I’d say upgrade that one to first (for history and its mystified offshoot ‘economics’ too). And add its corollary: the point is to change it.

  13. Russell

    “Whatever, or whomever you love with passion, will become work.” -RSD, I consider myself lucky as an independent scholar with an economic model of my own. I may only share it with the CIA & MI6, I have come to see. I did think it was unique to me, but looking for precedents and attempting always to build on real strengths was forced by my goal of founding a new nation into an in-depth personal study of Economics, and Finance.
    Now is the best time to be at this study because we are in the Great Follow-up. Since all was made boring by Glass Steagall, and things went along twin well with the Bi Polar power balance of a Cold War that worked into a toss up of a world on all fronts while in the throes of the endgame of the 100 Years Oil War, it is revealed that what is true must be accepted. (I wrote confronted. I thought better of it.)
    The System matters. There is the Fenced in Civilized world, and then the world of Chaos. Barbarians steal what they need and want, and civilized people work for what they need and want. In one world rules are obeyed, and in the other the pride of conquest drives all rules into a memory hole.
    “Work is the spiritual struggle for the material necessities.” -RSD
    What is the most horrible situation? The most horrible situation is to be trapped and lost at the same time. Now we are all trapped. Everyone is trapped. Some are lost at the same time too.
    In the Great Follow-up, those not lost are writing themselves, and us, if we will read, and listen, watch them on youtube, fighting ourselves out of the bag, the trap bag.
    “Taxes are the price we pay for civilization.” The Attorneys.
    “You cannot go wrong if your goals are correct.” -Einstein
    OK. The Goals of the US were just great up until 1899. Afterwards, Mahan’s battleships drove the US to become a monster. Oil, We Must Have Oil. The US used up all its own oil, then there was domination of the Middle East, and oil for land yachts. I had a Pontiac Star Chief! ,Bonneville with a 400 cubic inch engine & overdrive. Up the mountains and down. Anywhere in the country it could go. These cars, they put Cadillac transmissions in tanks!
    The world made safe for the barbarians. Genghis Khan, the robe gift to secure power. Dress for Success! Manners at the dinner table. Gone are fortunes over Lunch. Trophy wives. A butler says “He should be killed.” A wine taster here and there. Onward, Thieves Onwards, New Zealand and Mars Await!
    Money, goes into chests buried in Panama, under sand.
    What the hell is the goal? That was it? Change the Tax Code!
    “No.” there is debt.
    MMT. The Central Bank can cover it all. “No.” It must have a fucking goal that makes sense for more than the intolerable system that empowers the psychopaths and their baby brothers out to stick their hands in every womb.
    Finance stops where the printing presses start. Food, Clothing, Shelter. Yeah, AirMail!
    The air is an ocean.
    So then we become Mediaeval. We have become Mediaeval. First Boomtown where David Cay lives is perfect. Second past Chapel Hill the unique City State Ivory Tower Power. I show it to you daily. I ask for an invasion.
    Tool makers are what we are. The sea is rising. “A struggle with nature is not enough to make a nation.” -Machiavelli
    What War Best to Declare Now? Without a war, no salvation. Depression. No goal for the willing warrior other than a paycheck from a private army 6 times what gotten from the trainers.
    I declare war on a regular basis. War on those who will not give up WMDs, Nukes in particular.
    Print my note. Write a deal memo on the back.
    War on about 6 nations now, right. China, the US, France, Russia, Pakistan, North Korea, Israel, India,.
    Mearsheimer says everybody needs nukes because there is no Government of Governments.
    Shit damn, impossible.
    Collapse in place? Potatoes! Food. When all stops, and the drugstores close, are looted. Well I’ll die. So what.
    Go far from tanks and the TPP, TIPP, Uruguay, with Montevideo, and a loved soccer team. Go there kids. Leave us.
    If I win, well then, all the money goes to the engineers. Thanks. Russell

    1. JEHR

      Russell, if you would communicate with us in complete sentences, then we would understand what you are talking about; otherwise, not!

      1. whine country

        I think Russell is trying to demonstrate the futility of trying to predict his behavior in those macroeconomic models that are the subject of Mr. Black’s writing. Done a darn fine job at it too!

  14. fresno dan

    “Greg Mankiw effectively admits that economics is really about learning how to “think like an economist” and that that process is so removed from notions of rigor, verification, and completeness (as in explanatory power) as to amount to indoctrination.”

    So this very day, in the links section of NC, we have:
    Hedge Fund Comeuppance: Firms Hunker Down, Start to Cut Fees as Investors Wise Up and Withdraw Money – 05/16/2016 – Yves Smith

    These investors are supposedly the epitome of “homo economicus” – people who are educated, experienced, supremely rational, sophisticated about making money, dedicated, indeed, obsessed with investing, cognizant of risk/reward, and wall street scams – and yet, they fall victim to many different fallacies of logic, as well as common human foibles – that empirically and beyond question show that they make less money at greater risk than they could by just investing in a passive low cost index fund

    I have read too many articles from too many sources to believe these hedge fund people can consistently beat the market, and that is before trading costs, fees, and taxes.

    Yet the people who should MOST PROVE homo economicus as a concept MOST PROVE that the vast, overwhelming majority of humans engage in wishful thinking and IRRATIONAL investing, the one thing where there is no excuse for cold, calculating weighing of facts and returns.

    Yet such postulates that homo economicus are the very structure of economics are indisputably wrong….yet the “academic discipline” continues to be taught when it’s relation to reality is less than astrology is to astronomy….
    Economics is religion – with an even greater belief in things that are just not so…

  15. Michael Fiorillo

    “The success of mathematical physics led the social scientists to be jealous of its power, without quite understanding the intellectual attitudes that had contributed to that power… so the economists have developed their rather imprecise ideas in the language of the infinitesimal calculus.”
    – Norbert Weiner, “God and Golem, Inc.”

  16. Tinky

    “In the economic sphere an act, a habit, an institution, a law produces not only one effect, but a series of effects. Of these effects, the first alone is immediate; it appears simultaneously with its cause; it is seen. The other effects emerge only subsequently; they are not seen; we are fortunate if we foresee them.

    “There is only one difference between a bad economist and a good one: the bad economist confines himself to the visible effect; the good economist takes into account both the effect that can be seen and those effects that must be foreseen.

    “Yet this difference is tremendous; for it almost always happens that when the immediate consequence is favorable, the later consequences are disastrous, and vice versa. Whence it follows that the bad economist pursues a small present good that will be followed by a great evil to come, while the good economist pursues a great good to come, at the risk of a small present evil.”

    – From an essay by Frédéric Bastiat in 1850, “That Which Is Seen and That Which Is Unseen”

  17. ChrisPacific

    Keen’s argument in a nutshell boils down to two points:
    1. The mathematics used by economists requires an overly simplistic and unrealistic set of assumptions, to the point where it has zero relevance to reality;
    2. Even if #1 wasn’t true and it did have relevance, much of the mathematics underlying standard economic theory is just plain wrong. (Supported by a wealth of examples).

    Economists consistently deny point #1 in spite of all evidence (in fact denial of point #1 seems to be the first and most fundamental requirement to be an economist at most institutions). Their models generally do a terrible job at explaining or predicting real world phenomena, but economists view this as a defect in the real world rather than their models, and believe that the duty of policy makers is to bring the world more closely into compliance with the models, after which Nirvana will be achieved. (Whether this makes their brand of economics a science or a religion is left as an exercise for the reader).

    Most economists would still deny point #2, but trained mathematicians pointing out obvious flaws in logic does seem to make them uncomfortable, not least because it undermines their preferred position of arguing from authority. As a result they keep a much lower profile about it now in order not to attract too much attention from real mathematicians. Contrast this with some of Krugman’s columns from 10-15 years ago where he would commonly argue that if readers were only bright enough to understand the mathematics then they would see his theories were self-evidently correct.

  18. steelhead23

    I note that in science there are highly respected journals, which tend to be circumspect of ideas well outside the existing dogma, and less respected journals that publish more heterodox concepts. Is this not true in economics as well? If not, some intrepid publisher might wish to create such a journal.

    BTW – for those of you under the spell that science is open and amenable to change, I encourage you to Google Harlen Bretz and his theory of the land-processes in the Columbia River basin. It took the poor man 30 years to get broad acceptance that cataclysmic floods, not gradual change, created the landscape we see today. I believe that orthodoxy is very seductive – and dangerous. Professors are chosen for their grounding in the science – the orthodoxy. They then build careers expounding these ‘truths’, leading them to become fierce defenders of those theories even as evidence mounts dispelling them. This dynamic calls to mind the intricate maths used to refute the Copernican model of the solar system 500 years ago. Here, Dr. Black is not simply taking shots at Mankiw’s economic theory, he is nullifying Mankiw’s life’s work. Spirited defense is to be expected.

  19. James McFadden

    I think an apt description of neo-classical supply-side economics is “cargo cult” science – an attempt to duplicate the success of physics without really understanding how science works. I can picture it now: the economists waving pieces of bamboo in an attempt to signal the planes from heaven to land and bring forth economic bounty – if they can just get those free-trade planes to land and bring forth the bounty of free-markets – all guided by the invisible hand. Neo-classical economists like Mankiw have all the rituals down, but fail to have any understanding of what they are doing. They lack understanding of the underlying dynamics that governs the world. There are a few economists who see past the rituals – Steve Keen, Jack Rasmus, David Harvey, Bill Black, Michael Hudson – but most economists are blind to reality and focus on perfecting the rituals. For those who haven’t heard of cargo cults, Richard Feynman provided an interesting and entertaining description of them which can be found on the web.

  20. ke

    Like all expert systems, arbitrarily closed systems generating derivative symptoms in a positive feedback loop, economics is mythology, having nothing to do with supply and demand and everything to do with artificially variable demographics, unlimited growth and population control fanatics both breeding compliance to debt as money.

    If a community cannot extract itself from energy dependence, all it can do is fight over the redistribution of consumption.

    You do know that driving a heavy vehicle over pavement is incredibly stupid?

    You do know that your vehicle is essentially an air pump?

    You do know that the air pump can be designed to intake any gas, including CO2?

    You do know that even a primitive hydrogen system will eliminate gas stations?

    Relative to plants, human beings are cavepeople.

  21. John Wright

    As far as Greg Mankiw making predictions, in 1988-1989, Mankiw and Weil wrote a paper titled “The Baby Boom, The Baby Bust, and the Housing Market”

    The abstract has “This paper examines the impact of major demographic changes on the housing market in the United States. The entry of the Baby Boom generation into its house-buying years is
    found to be the major cause of the increase in real housing prices in the 1970s. Since the Baby Bust generation is now entering its house-buying years, housing demand will grow more slowly in the 1990s than in any time in the past forty years. If the historical relation between housing demand and housing prices continues into the future, real housing prices will fall substantially over the next two decades”

    This has “The regression in the first column of table 2 implies that real housing prices will fall by a total of 47 percent by the year 2007”.

    I believe this prediction has not worked well for Mankiw, but it has been said that economics is most successful in predicting the past.

    His text book is estimated to pull in $2 million a year for him per due to frequent updating.

    Mankiw has a winning formula, and probably even this publicity helps as it furthers his right wing credentials.

    .I view many economists as the modern priests who tell the wealthy modern kings (politicians and businessmen) what the kings want to hear.

    Perhaps economists will determine in the not too distant future that with climate change and resource shortages approaching, they will conclude that the sign on their oft quoted/touted GDP number should have been negative as humans were adding negative value to the planet..

  22. I Have Strange Dreams

    Mankiw doesn’t even believe in “free” markets: His undergrad student textbook is a compulsory purchase for his class; no alternative texts allowed.

  23. OregonJon

    The global economic malaise seems a case in point for the falsity of economics where global central bankers sip the same glass of wine. Arguably Quantitative Easing and negative interest rates are doing more harm than good. Iatrogenisis anyone?

  24. Phil Bayliss

    Doctor Dee had a remedy for the plague (you know the image of the black cloak and the beak : full of herbs to avoid the smell, and therefore the infection). Economic teaching avoids the smell. But then given the privatisation of higher education, theocracy rules. Remember ‘Die Weisse Rose’ of students in Munich who were executed for resisting both a repressive regime, but also a restriction of knowledge. Mankiwic is close to Roland Friesler who denied habeas corpus to Sophie Scholl: we are close to the catholic tendency who condemned Gallieo for his heliocentric universe.

  25. FortyYearsInThe UniversitySystem

    Some years ago I’d seen the term “Austrian economics” being kicked around the intertubes alot so I thought I must check it out. But where? Someone said check out this Von Mises chap. He can be found through this other relatively famous fellow’s website. Very good, I thought, and off I went, surfing the tubes. Now, when I got there on the front page of the website was the startling claim that economics is too complicated to be studied empirically and therefore must be studied a priori. What? What? You mean.. make it up in your (ie., Von Mises’) head? As if this Von Mises was the new Euclid or something. Paaahh! I left in disgust, leaving a cloud of pixels in my wake. Mises, Mankiw, whatever.

  26. Laocoon

    Silly me. 43 years ago this semester I was forced to cram in Econ 101 as a prerequisite for grad school. By the second class I was already seeking out the prof at his office hours. I asked, how do you know this about supply and demand, where’s the data to establish this relationship in the Cartesian plane, is this always true, what exceptions exist, hey, I’ve got four semesters of math behind my questions. I was told to just accept it. At least the guy didn’t lead me on by saying there would be data later. Now the prof is head of the department at the same highly selective New England college. Thanks to Bill Black for exposing this high level academic fraud.

  27. mono

    Well it is indeed surprising to see that the west have woke from the lovely slumber of accepting economics the queen of social sciences. The east is still sleeping.

  28. Nathanael

    I actually threw Mankiw’s “textbook” into the recycling because I didn’t want any unsuspecting person to buy it used from a used bookstore or booksale. I consider it to be equivalent to the Protocols of the Elders of Zion or Mein Kampf — a nasty piece of bigoted propaganda which can spread vicious, anti-human philosophies.

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