16 new theses about economics

1 Purpose

Economics seeks to explain how individuals, the organisations (informal and otherwise) and the states (with their associated instruments of government) of which they are a part make decisions for themselves and as they impact others, whether they be known or unknown to the decision maker and whether intended to have impact now or in the future.

No, it’s the study of the allocation of scarce resources.

2 Objectivity

There is no such thing as objective economics. Economics always reflects the choices and values and preferences of the decision maker, economist, organisation, society, country or international organisation that promotes it and must be understood within that political and social context.

No. The search is for those things which are true, not dependent upon the views or desires of the person doing the explanation. This is the science part of the social science of course.

3 Society

Economics must always reflect the society and its circumstances for which its use is anticipated. Since these societies and circumstances vary wildly there are no such things as standard or optimal economic solutions.

The Senior Lecturer doesn’t understand the word “optimal.” Which really means “best we can do in the circumstances.” You know, there are costs and benefits to everything, so, what’s the best balance?

4 Constraints

Economics must reflect the world we live in, the constraints it imposes upon us, the obligations we have to generations to come and the resources currently available to us.

Well, yes, I suppose so. Useful if the study of the allocation of scarce resources notes that resources are scarce.

5 Government

A government is the foundation of almost every state

Tautology.

6 Diversity

Individuals fulfil different roles and functions at different times in their lives. Economics must reflect that fact and recognise that a useful life is not necessarily one dedicated to work for economic (usually monetary) exchange, whilst also recognising the importance of this role for many.

Modigliani and Friedman, lifetime income hypothesis and income smoothing perhaps?

7 Work

Work for monetary exchange takes many forms and can be contractually organised in many ways. Economics should recognise that no one mechanism is better than another if all suit some and that the differing methods of working, including self-employment and entrepreneurial activity, are a part of the necessary choices that an economy likely to meet varying need will encourage.

Where economics doesn’t agree with this is difficult to discern.

8 Discrimination

Economics should not be discriminatory either whether within itself or in the prescriptions it offers or alternatively should be explicit about its choice to be so, making clear those that it intends to favour and why when this discriminatory approach is adopted.

This is about birds going on TV, not professors of practice, isn’t it?

9 Inequality

Economics must recognise that people are not homogenous; each having their own preferences and choices to make that cannot always be anticipated. The consequence is that not all bring the same predispositions to economic activity which in turn means that not all will enjoy the same outcomes. That being said, unless explicit and good reason is given the differences in outcome should do no more than reflect the predispositions that each person does naturally possess and even then the human rights of each individual must be respected to ensure all have access to the society in which they live.

Rather covered by the insistence that utility is personal, isn’t it?

10 Predictability

People are not predictable, and none can know with any certainty what might happen to them in their own future, or that of others. The consequence is that the methods that are used for decision making vary widely, including by the same person when considering different issues. Economics must reflect this reality.

The definition of “rational actor” includes this. Rational meaning consistent or, in the stricter meaning, calculating, *according to what is known* by the actor.

11 Need

Without being prescriptive it is likely that most individuals will have a range of needs that are necessary to meet their material, emotional and intellectual needs, with many also recognising that in combination these activities might provide them with a sense of purpose that they alone can define. Economics is not capable of presuming what those goals might, or should, be.

Utility is personal…..

12 Society

People are social beings. The relationships they have, various communities they live in, organisations they work in, and societies of which they are a part are all shaped by them in their own particular ways, as much as they might be by the other participants in them. Those organisations are as a result complex and unpredictable as well as being open to considerable change over time. Economics must recognise this, and that many of the factors that influence those outcomes can rarely if ever be reduced to issues solely relating to economics exchange.

Utility is personal…..

13 Organisations

Because society can grant some organisations either roles or scale that is disproportionate to that of any individual or community their functioning is of particular significance in economics and worthy of special study to ensure that their influence does not inappropriately impact the relationships between all those individuals on behalf of whose well being it should be presumed that an economy is run unless specific assumptions to the contrary is stated, with reasons given.

We’ve not got anyone studying institutional economics at all……

14 Change

Change is integral to life, and so to economics. Economics must recognise that life is lived in a perpetual state of flux. Because of this continual process of change it is vital that economics is studied within the context of both general history and the history of economic thought because only by doing so can the diversity of possibility be understood.

We did have that Marginalist Revolution around 1870 or so. You know, neoclassical economics which works on this very basis?

15 Surplus, deficits, capital and borrowing

In the process of change that is the perpetual normal state of an economy there will be some who accumulate surpluses, and others deficits, of resources. Some of these surpluses will be represented by tangible property. Other elements will be cash holdings or borrowings. Yet more will be non-cash related financial assets and obligations. Economics must both explain the consequences of these surpluses and deficits arising, including their impact on the well-being of those who have responsibility for them, and explain how they might be managed for the good of all as those involved face changing circumstances over time.

There are entire libraries discussing savings and debts. None of which Spudda is aware of apparently…..you know, maybe Friedman on lifetime income and smoothing?

16 The wider perspective

Important as economics might be to those engaged in its study it is but one of a range of disciplines that seek to explain the human condition and the relationships between those who make up a society. It must be understood, and taught, in that context and not in isolation.

No one does pretend that economics explains gravity….

Snippa teaches economics at a British university….

40 comments on “16 new theses about economics

  1. I am in awe of your stamina here Tom Worstall. I would not be able to maintain your sustained effort

    I wonder, do you get assistance from viagra or someting similar? Asking for a friend.

  2. “Work for monetary exchange takes many forms and can be contractually organised in many ways. Economics should recognise that no one mechanism is better than another if all suit some.”

    So he supports slavery (or at least bonded labour)?
    Shame, as I think most people would say whilst it may suit slave owners it almost certainly is worse than all other mechanisms.

    Whilst there probably isn’t a mechanism that is better than all others there are mechanisms which are better than another.

  3. @TW – I am amazed that you are willing to wade through this stuff.

    16 new theses… do you think Murphy could be persuaded to nail himself to a door somewhere?

  4. Surely this is marvellous, isn’t it? You’re witnessing someone discovering economics for themselves, working up from first principles. For an economic historian this would be a virtually unique opportunity to study.
    Just odd the subject of the experiment should also be teaching the subject at a UK university. Puts books with titles like “Discovering Science Together” into a wholly new context. “And now boys & girls we’ll put these two pieces of plutonium together & see what happens.”

  5. “Work for monetary exchange takes many forms and can be contractually organised in many ways. Economics should recognise that no one mechanism is better than another if all suit some.”

    But when Murphy looks at Uber, he thinks that anything other than an employer-employee relationship is tax avoidance.

  6. These theses are truly bizarre. Economics is not the study of how people make decisions. Not all decisions are about allocating resources and even if scarcity comes into the decision it might not be the most important factor. For example if you have to make the choice between becoming a footballer or a teacher, you could decide based purely on expected earnings but I would imagine that other factors come into consideration. And, to be honest, I do not know how you assess the impact on people you don’t know.

    Given the confusion of this first thesis, the programme falls apart alarmingly fast.
    Thesis 2 is obviously false. The distinction between positive and normative economics is covered on the first page of any economics textbook.

    Economics must always reflect the society and its circumstances for which its use is anticipated. Since these societies and circumstances vary wildly there are no such things as standard or optimal economic solutions.

    I don’t know where to start with this nonsense. He seems to think that economics is something like a hammer. He does not seem to understand that it is a way of understanding certain interactions. We use our economic knowledge to guide our actions but he seems to think it is a weapon of some kind. And it is self-evident that problems and solutions come in all shapes and sizes and involve trade offs. It is as if I proposed a set of theses on English and started by proposing that there is an alphabet.

    Half-witted nonsense. The tragedy is that the idiot who wrote this thinks he is a profound and original thinker and he is being paid for this drivel

  7. Does he really believe that economic thinking is different in every society? Is someone capable of such stupidity?

  8. You forgot the link. Maybe the original is too toxic to be read direct, but still it would be nice to know.

    Google says:

    > Did you mean: “16 new thesis about economics”
    > No results found for “16 new theses about economics”.

  9. I should stop now but thesis 6 makes me wonder if the idiot has heard of anthropology. Where in economics do you study how people choose jobs and lifestyles and the value that societies place on those choices? Those things are better covered in other disciplines. Buy I suppose if you have no clue about economics you can bundle anything inside it including nuclear physics.

  10. Thesis 5 is comical. He seems to assume that economics is the study of economies even though he defined it differently in thesis 1. Of course, at one level it is the study of economies but economics also happens at all sorts of other levels. In another thesis he seems to realise this but the expression gets a bit difficult to follow. Try understanding this gem

    Without being prescriptive it is likely that most individuals will have a range of needs that are necessary to meet their material, emotional and intellectual needs

    I really must stop here because it is really not interesting and might be considered cruel to dissect the ramblings of this puffed-up Poorer. It is like watching a hippo do brain surgery. It rapidly gets messy and it is, in the end, pointless. The Prof will continue to get paid and certain unfortunate individuals will continue to assert his brilliance despite the clear evidence to the contrary that he spews out every waking hour

  11. In this season of goodwill to the less fortunate, a compassionate person would buy a copy of Economics for Dummies and send it to Murphy at City University c/o the Vice Chancellor

  12. Hmm, not sure about that BF. You have to read those, don’t you? Might be tricky, as the Dick thinks that’s beneath him.

  13. Surely, Gamecock, the world is not big enough to contain another intellect as titanic and original as Murph’s

  14. “Economics is the study of the allocation of scarce resources.” Even in my youth, the number of orgasms of which I was capable per diem was limited. I honestly don’t think that economics is at all concerned with male orgasms. Aha you say, it’s the allocation of scarce economic resources, employing the well-known circular argument. Why not cut to the chase and base your definition around the study of trade?

  15. Quite famously Gary Becker used economic reasoning to examine the family and sex. Rather easy to do so with your example. How are you going to allocate those scarce orgasms? How many will be used to please the wife, how many just to please yourself?

  16. There is more to it than just trade. Where do production and consumption, tax and government spend, public choice etc fit into the study of trade?

  17. “Tim Worstall

    Quite famously Gary Becker used economic reasoning to examine the family and sex. Rather easy to do so with your example. How are you going to allocate those scarce orgasms? How many will be used to please the wife, how many just to please yourself?”

    – Mummy, mummy, whats’ an orgasm?

    – I don’t know, ask your father.

  18. “…it is likely that most individuals will have a range of needs that are necessary to meet their material, emotional and intellectual needs, with many also recognising that in combination these activities might provide them with a sense of purpose that they alone can define.”

    You just can’t write can you Richard. 

  19. “Surely, Gamecock, the world is not big enough to contain another intellect as titanic and original as Murph’s”

    It is too well written to be Murphy’s.

  20. the sad thing is that the potato thinks he’s describing economics for idiots whereas it’s actually an idiot describing economics.

  21. 16 new theses… do you think Murphy could be persuaded to nail himself to a door somewhere?

    I suspect Murphy is the kind of guy who could break three of his fingers with two swings of a hammer.

  22. This a postmodernist interpretation of economics. Which explains why he’s a fool. It also has a job at a university.

    Time, keep up the good work.

  23. “… Gary Becker used economic reasoning to examine the family and sex.” I can use economic reasoning to examine whether blue or green is the more restful colour. That doesn’t make it economics. If you remember, WON shows that the only economic value anything can have is its value in trade. Ergo the “allocation of scarce resources” definition misses the mark.

  24. All these people coming up with theses on Economics in commemoration of Luther’s attack on orthodox Catholicism. Thank God we have Tim to nobly defend the status quo ante from those who contend that the combined wisdom of the Economics Establishment is highly questionable and needs reform .This Establishment is in control and the duty of right-thinking citizens is to brown nose its representatives at all times.

  25. All these people coming up with theses on Economics in commemoration of Luther’s attack on orthodox Catholicism.

    Pity they have to come up with politically driven nonsense rather than reasonable suggestions to improve the situation.

  26. The Senior Lecturer seems to be trying to lay down an “intellectual” framework for bending economics into the promulgation of his personal opinions. Or pass the latter off as the former. It is not too far from here to the best-seller, “Why Do You Think You Think?” from Atlas Shrugged.

  27. ‘it’s the study of the allocation of scarce resources.’

    Reminds me of the 1980 U.S. election.

    Jimmy Carter proclaimed that only government can fairly manage scarcity.

    Ronald Reagan said, “Screw that! We’re America! We’ll just make more!”

  28. Yes, DBC. There is a distinct parallel with Luther. Luther was challenging the Catholic Church’s imposition of their version of order on a superstition. A belief system. He wanted a different order. people like Murphy want to superstition & belief on something that’s based on reality & evidence.
    When it comes to micro, anyway.
    A lot of us regard macro as little more than superstition & belief. He’s welcome to do whatever he likes with that. We’ll have just as much contempt for whoever orders it.

  29. @BiS
    You are rather missing the point: the present outbreak of economic theses stems from the pinning of 33 theses to the doors of the London School of Economics on 12th December in commemoration of Luther nailing his 95 theses to the door of the castle church in Wittenberg 400 years ago .Either you agree with one of the present signatories, Prof Victoria Chick, that students of Economics and others must “search for Truth in the contest of ideas” or you believe that such searching is heresy, in which case you should not be taking part in debate on the Net lest you confront heresies.

Leave a Reply

Name and email are required. Your email address will not be published.