When a science starts with bad convenient assumptions the mistake is likely to overwhelm later. In economics we have the rational man. In a transaction two rational people with the same complete information engage in an exchange. What economics fails to explain is why one is selling and one is buying. The psychological state of the two are in fact radically different, often hope on one side and despair on the other.
Leaving out the psychology of real life means that economics cannot deal with politics, revolution, the use of wealth and the abuse of poverty, climate, nor the human cost of sequestering families for months. It raises the question, what is economics therefore good for? It helps bureaucracies with fake numbers like unemployment and GDP that serve the 1%.
Beyond that it serves a career structure, but for what?
One view is that it legitimates the running of society by experts by giving the appearance that all is well because the bridge of the Titanic is manned by people of wisdom. We have not developed a leadership capable of looking at major facts. The earth and the species go ungoverned.
The problem is, when we need wisdom we don’t have it. A recent book by Boris Frankel The Fictions of Sustainability, has –
“This book is an attempt to overcome a pervasive ‘analytical apartheid’that characterises so much socio-economic policy on the one hand and so many environmental analyses on the other. I was particularly struck by this in January 2014, when I read a draft copy of Wolfgang Streeck’s article, ‘Taking Crisis Seriously: Capitalism On Its Way Out’ What troubled me in particular was the complete absence of any mention of the greatest present-day crisis confronting us all, namely, the climate emergency threatening catastrophic climate breakdown. Leaving aside a minority of critical political economists, Streeck’s omission of any discussion of environmental issues remains common for both mainstream economists and Left political economists. It is the widespread disregard of crucial ecological issues (or their token inclusion in the odd sentence or paragraph) that motivated me to write this book.”
This could all be seen as an invitation to do more serious and less fig leaf economics. On to 2021.