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.
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?