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0 pointsroenxi5y ago0 comments

Yes and no. There are large amount of economics where the describing what is going on doesn't change the outcome.

Eg, a free market puts tremendous downwards pressure on profit margins. Identifying that means the powers that be fight against free markets with hook and crook - but it doesn't change the fact that if there is a free market it will find an equilibrium where people are indifferent to starting a new business.

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smegger0015y ago

SO what you are saying is we should distinguish between a descriptive, and predictive science.

earthboundkid5y ago

The last forty years has been shaped by neoliberalism, which is exactly based on the idea of free markets as self-correcting. You’re so blinded by it that you’re just assuming that the theory is correct, so therefore the theory can’t have an effect!

A) empirically, that was wrong and disastrously so (not as bad as communism but very bad) B) assuming reflexivity can’t exist is silly even within the neoliberal framework. It’s like assuming that the dollar bill you see on the sidewalk must be fake because it’s there.

roenxiOP5y ago

If you want a citation; that little theory is vaguely from Karl Marx. Chapter 13 of Capital, Volume III according to Wikipedia [0]. Pretty good theory, and somewhat older than 40 years.

Notwithstanding that, what you say may be true.

[0] https://en.wikipedia.org/wiki/Tendency_of_the_rate_of_profit...

pdonis5y ago

> The last forty years has been shaped by neoliberalism, which is exactly based on the idea of free markets as self-correcting.

This is not only wrong, it's laughable. Governmental interference in the economy has grown over the last forty years, not shrunk. And not with good outcomes, either: the crash of 2008-2009 was due to too much government meddling over a period of decades finally catching up with everyone.

progre5y ago

> the crash of 2008-2009 was due to too much government meddling

I thought it was because of irresponsible speculation in dubious securities backed by by corrupt rating houses?

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