Snippa’s knowledge of economics to the fore once again

Peter Bofinger is professor of economics at Würzburg University and a former member of the German Council of Economic Experts. He has written an excellent, and accessible, article on Social Europe in which he explains why Keynesian thinking explains the world as it is, and neoclassical economics explains a world that does not exist.

Hmm, neoclassical economics manages to explain an awful lot of the world but still, let’s see what is being said:

[T]he laws of motion of the classical and the Keynesian world view differ…. In the classical model saving generates investment. In the Keynesian model investment generates saving. In the classical model saving and investment determine the interest rate. In the Keynesian model saving and investment determine aggregate output.

Ah. The classical model is different from the neoclassical model. Markedly so.

Something that Snippa seems not to know. And Snippa used to be a professor of economics at a British university.

Ho Hum.

And it is why neoclassical economics continues to help destroy us, our economies and our planet. And it has to go.

Just to remind everyone what the three major tenets of neoclassical economics are:

People have rational preferences between outcomes that can be identified and associated with values.
Individuals maximize utility and firms maximize profits.
People act independently on the basis of full and relevant information.

Which of these does Ritchie want to junk? No, not which should people not do but which don’t they?

5 thoughts on “Snippa’s knowledge of economics to the fore once again”

  1. A: “Individuals maximize utility …”: only if you pull the fast one of treating the utility of a man’s family as intrinsically part of his. In fact I doubt that it’s worth even enquiring in that sort of detail. The statement is clearly intended to be an unfalsifiable law, or a mere tautology.

    B: ” … and firms maximize profits.” Nah, firms maximise the CEO’s “compensation”. Otherwise A would be wrong, wouldn’t it?

  2. I’m sure we’ll all be delighted to learn that the baying wolf is still some way from crossing the threshold of the unimpressive Ely end terrace:

    At the beginning of this year I mooted the possibility of an appeal for funding on this blog because at that time it was not apparent how the income that I had enjoyed from City, University of London to October 2019 might be replaced.

    I have this morning published an update on my funding for my various activities. I am pleased to report that some grants have been won in the meantime, either in a personal capacity or through the Corporate Accountability Network, which in turn is employing me, and that I am as a consequence funded for the time being. As a result the idea of a funding appeal has been put on hold at this moment. However, I much appreciated all the offers of support provided when the idea was put forward.

  3. BraveFart

    I was actually interested to know who funds the Corporate Accountability network.- then when I looked at the blog I can see they’re basically the same people who ran the TJN. It does appear that some of the funding comes from Denmark but otherwise I’d advise Cummings to take a look at this (and hundreds of other sock puppet shrills) and ensure that not one penny of taxpayer funding goes anywhere near it.

    In some ways it quite sad that at an age when most people would be looking at future retirement he is still in ‘Gissa job’ mode. I doubt many actual corporations are listening to whatever ‘insights’ this organisation cares to put forward…

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