I see that DBC has been recommending Social Credit as a cure for our economic ills.
Unfortunately this fails for the same reason that most engineers fail at economics.
For they assume that the economy in aggregate is sufficiently calculable (as with an engineering scheme) that we can determine what prices \”should\” be rather than what they are.
Hayek showed us that this is not so: in order to calculate, to model, the entire economy to that level of detail we must use the entire economy as our calculating engine. True prices are thus market prices for the only possible method of estimation is that entire economy.
At which point Social Credit all falls down.
This isn\’t to say that there aren\’t interesting ideas within it all: the emphasis upon acumulated human capital (knowledge perhaps) is very interesting indeed and is something that mainstream economics does struggle to model: it\’s really what everyone is talking about when they mutter about \”institutions\”.
But containing some interesting ideas is not the same as having a decent plan to run the economy.
(Indeed, I would go further. My not very original idea is that no particular or specific branch, style or school of economics has such a decent plan. None of them contain or reveal the total truth necessary: all however provide interesting windows onto this or that part of the larger whole. Yes, there\’s very good stuff in Marx, Keynes, Smith, Mill and so on, in Sraffa, DeLong, Krugman, Friedman, Buchanan, Tullock etc. The school which I think comes closest to actually having a real plan is Hayek, in that we don\’t and cannot know enough to have such a total plan yet we do indeed need to have partial plans in certain areas and times and we just have to struggle on to design and implement those as best we can. All the while reminding ourselves that while we can indeed design a market to reduce So2 pollution (to take one successful example) this is only a partial solution, the grand and complete one is not available to us.)