Ritchie doesn\’t do nil nisi….

Let the body cool first, eh?

He, more than most mathematised economics. Which means he had to assume people were rational. In the process he broke the link between economics and reality.

Then he assumed the existence of stable equilibria in an economy – which is contrary to all known evidence. So once more he remeoved economics from the realms of usefulness.

And he wrote a textbook that has created more bad economists dedicated to harming the society in which they live than almost any other.

So what he got a Nobel prize? His legacy is dire.

Paul Samuelson has died. A Nobel laureate economist he has a lot to answer for, and his legacy (eulogised in the FT by the BBC’s Stephanie Flanders) is pretty dire.

And Ritchie presumes to lecture us on ethics and morality.

Update: and of course, Ritchie is too dim to realise that he was one of the greatest popularisers of Keynes, Ritchie\’s economic hero….

7 comments on “Ritchie doesn\’t do nil nisi….

  1. But he’s right. To allow our natural inclination to decency to prevent us from identifying the calamitous results of Samuelson’s writings at precisely the time when others are eulogising him would be a grave disservice. Samuelson’s espousal of socialism, and his attempts to support it through his text books led to decades of irresponsible government economic policies, particularly in the third world. What he did was not without consequence, and if through our own decency we fail to challenge his teachings we reinforce the current perception that the Keynesian/Samuelson prescriptions of current economic policy are correct, rather than the disasterous deferral of an overdue realignment of the system that is required.

    It’s distasteful, but true.

  2. Christ on a bike Jim: body-still-warm-ery aside, Samuelson’s main achievements were inventing the concept of revealed preferences, and making the modern economic case for free trade. Are you getting him confused with Che Guevara or something?

    (conjecture: irrespective of one’s ideology, if one finds oneself agreeing with Richard Murphy on anything, one should probably take a deep breath and think about something else. Unless the issue is “whether the room is filled with poison gas”, I suppose.)

  3. Jim-

    Even if Ritchie was right – and he isn’t on Paul S. – he’d be right for the wrong reasons, which he has helpfully listed in his post.

    As John B. said, if you find yourself agreeing with Murphy on anything (including poison gas in the room), rethink your position.

  4. “Which means he had to assume people were rational. In the process he broke the link between economics and reality.”

    Dickie appears to be unable to empathise with anyone who does not share his world view.

    People are rational. Pay people to have children and some will choose to have children. Support people who are unemployed and some will choose to not work. Make it a doddle to get qualifications and some people won’t bother learning anything. Make it onerous for businesses to employ women and some won’t. Incentives matter but crucially it depends on what weight each person gives to those incentives. We do look out for our own best interests. The potty ones are those who think otherwise because they cannot comprehend that other people might have other values at heart.

    If people didn’t behave rationally Governments would be wasting time and (our) money trying to change behaviours with taxes and benefits. Load up taxes on cigarettes and some people will smoke less, others will go without other things to pay for their habit while yet more others will buy untaxed fags. Make NHS dentistry a bugger to access and some people will go private, some will go without, some will DIY and some will exploit emergency NHS dentistry. Each choice can be as rational as the other. Might Dickie be confused in thinking there can only ever be one rational course of action regardless of your values?(Presumably that rational choice being whatever it is he would do in a given situation…)

    Even the banks getting into such a God awful mess was rational from their point of view. To them it didn’t look like trouble. All of their usual indicators were telling them that their magic financial products were risk free – Governments were lauding them for bumper tax revenues, central banks were encouraging cheaper and cheaper lending, financial regulators kept giving them the stamp of approval. They even had insurance!

  5. He, more than most mathematised economics. Which means he had to assume people were rational. In the process he broke the link between economics and reality.

    So what does that say about the “scientific” socialism Richie doubtless believes in?

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