The Real Problem with Econ 101

monopoly_dice

The recent blogpost by Robert Atkinson and Michael Lind, Econ 101 is killing America, is well worth a read. I believe with a little tweaking and an addition here or there–for example: Myth #11 Strong Currency = Stable Economy–it could easily apply to Europe, or much of the rest of the world for that matter. (With the notable exceptions of State Capitalist countries).

This is still in draft form…

I find much merit in their analysis, and recommend reading it before continuing.  I think that their thesis, that overly simplistic Economic Analysis is killing public policy, is In fact this a great example of what I have christened the “lowest common denominator” affect.  This idea is simular to the idea of fishery scientist’s Daniel Paulie’s shifting baselines, where one’s frame of reference determines how one views a problem.  The old “When I was young… and now…”  However my conception, Lowest common denominator, is more like the game of telephone, where experts begin with a complex concept and then proceed to explain it first the nuances will be lost, then slowly the message becomes simpler and simpler until at the end only the “lowest common denominator” wins out.

To comment directly on the piece, I find that Lind’s and Atikinson’s Myths #1, #3, and #5 are those I perceive to be the most pernicious  to a current public policy debates.  #1 is the truth, but very problematic. The great discussions between physicists and economists at the Santa Fe institute in the mid 1980’s really put this in perspective, and I wish that many economists would  However, we still need a science dedicated that seeks to understand the allocation of resources, and there are many brillant insights in economics (many have been borrowed by other  We do not want to throw the baby out with the bath water, to borrow the cliche. Myths #3 and #5 are the most disconcerting to me.  As a country we do seem to have lost all sense of balance between what governments are for, and what markets do best.  We should do well to reconsider our moral roots.

 

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