[Marxism] Baroque fantasies of a most peculiar science (Financial Times)

[Paul Gallagher]

http://www.ft.com/cms/s/8d56f42a-6777-11db-8ea5-0000779e2340.html

Baroque fantasies of a most peculiar science

By Philip Ball

Published: October 29 2006 18:48


It is easy to mock economic theory. Any fool can see that the world of 
neoclassical economics, which dominates the academic field today, is a 
gross caricature in which every trader or company acts in the same 
self-interested way – rational, cool, omniscient. The theory has not 
foreseen a single stock market crash and has evidently failed to make 
the world any fairer or more pleasant.

The usual defence is that you have to start somewhere. But mainstream 
economists no longer consider their core theory to be a “start”. The 
tenets are so firmly embedded that economists who think it is time to 
move beyond them are cold-shouldered. It is a rigid dogma. To challenge 
these ideas is to invite blank stares of incomprehension – you might as 
well be telling a physicist that gravity does not exist.

That is disturbing because these things matter. Neoclassical idiocies 
persuaded many economists that market forces would create a robust 
post-Soviet economy in Russia (corrupt gangster economies do not exist 
in neoclassical theory). Neoclassical ideas favouring unfettered market 
forces may determine whether Britain adopts the euro, how we run our 
schools, hospitals and welfare system. If mainstream economic theory is 
fundamentally flawed, we are no better than doctors diagnosing with 
astrology.
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