His point is that the conventions of much of economics can be ignored because they are merely conventions and judgement has to be used as to when they apply, or not. The mess we’re in is the result of failing to use that judgement. The logic of micro-economics has been used when it has been wholly inappropriate to do so.
Labour has to offer credible economic policies. That means it must apply judgment and not seek to pander to conventional economic thinking.
OK. But now we need some sort of system to decide when these methods are indeed appropriate. And in the source document that Ritchie is commenting upon we find:
There are many situations where the assumptions Prof Becker describes provide useful conclusions, though family life and suicide are probably not among them. If rents are controlled, tenants still have much the same preferences in housing and potential landlords will still be looking for investment returns. Maximising tenants will maintain or increase demand, while maximising landlords will reduce supply. A new equilibrium in the housing market would leave fewer houses available to let, and a queue of people wanting to occupy houses at prevailing rents but unable to do so. And there is a good deal of empirical evidence that this is indeed what has happened.
Excellent. We now have Ritchie agreeing that rent control is a very bad idea indeed. For it’s counterproductive.