I was chatting with a fellow economist online recently and I wanted to explain what I think is going on with bad economics in as short and telegraphic a way as possible to avoid wasting his valuable time, and I was so pleased with my handiwork I thought I might as well post it here as well.
Here’s my take on how bad economics works in a nutshell. This, in my opinion, is how neoclassical welfare economics manages to start from simple premises to generate such confusion, conflict, frustration, and anger. I’ll do it in six steps and one appendix-like comment.
Step 1. Follow standard neoclassical welfare economics in isolating ostensibly relatively controversial ethical issues involving resolving interpersonal conflicts from ostensibly relatively non-controversial ethical issues involving one person acting in isolation.
Step 2. Exaggerate the non-controversial quality of one person acting “in isolation” by ignoring among other issues the potentially controversial ethical issues relating to effects on future generations, the environment, animals, etc.
Step 3. Address the ostensibly relatively non-controversial ethical issues involving one person acting in isolation using the language of utilitarianism and get people talking and thinking about those propositions as the sole ethical content of economic theory.
Step 4. Play some conceptual and word games, misinterpretations really, that make it seem as though economic theory has something to say about the relatively controversial ethical issues relating to resolving interpersonal conflicts by indirectly addressing distributional matters.
Step 5. Minimize the complications posed by resolving interpersonal conflicts using economic power on markets by pretending all relevant ethical issues can be addressed practically via artful manipulation of distributions and ignoring ethics that are more situational in nature.
Step 6. That’s it. Bad economics. Unstated, unclear, hidden, controversial ethical propositions relating to resolving interpersonal conflicts through economic power on markets disguised by the red herring of a trivial, ethically implausible, insincere form of “utilitarianism.”
Appendix. How do the games and misinterpretations in Step 4 work? Multiple ways. Some of them are in my book, but they involve things like introducing ethical propositions not based on utility (property rights), ignoring distributional effects and pretending it equates to indifference, etc. Those are the fun bits that really put the bad in bad economics. Basically, the sorts of issues I raise in this blog, for example.
Given my current obsession with doing whatever I can to fight bad economics, which I’ve come to believe lies at the heart of a great deal of confusion and conflict in our society and others and has done for some time, most of what I have to say in my blog will likely involve one or more of the points I just mentioned.
