Discontents with Modern Economic Theory

I’ve rambled and wrote before on this topic, but I need to say it again: Modern economic theory is baseless bullshit.

As a philosophy major I like to pride myself on being able to look beyond the obvious, beyond what’s presented prima facie, identify shortcomings of any claims, and ask the tough, pertinent questions. That being said, I’ve spent a lot of time as an undergraduate studying economics and finance and researching  the shortcomings of the various economic assumptions built into the economic theory, their models and methods, and the policy decisions stemming from them, and I find that the vast majority of it is unfounded speculative assumptions.

Fundamentally, modern economic theory is not scientific. It is pseudoscience. While not the first person to call bullshit on the neo-classical economic theorists, Imre Lakatos did a fine job making explicit  the shortcomings of their neo-classical claims in the seventies along with his colleague Spiro Latsis in their paper Situational Determinism. This shed light on the flimsy assumptions grounding their  theories and encouraged other economists, as well as academics from other fields such as psychology, to revise many of their assumptions in favor of a more holistic, organic, and biological representation of economics, resembling a more accurate ecology of evolving human interaction. These minds produced what we now know as behavioral economics, institutional economics, environmental economics, and the most promising and nascent of all, evolutionary economics.

I’m researching a thesis topic for a macroeconomic policy seminar class so I can write a twenty-five page paper that examines and suggests macroeconomic policy. I decided that I’m going to get radical about this paper. I’m tired of holding my tongue when we sit around semicircle in class dithering on about these abstract relationships concerning abstract entities while we posit our way out of real or hypothetical economic problems with totally ad-hoc assumptions revolving around contemporary fiscal and monetary policy. It’s all bullshit.

Economists are bullshit. They are modern day bishops that instruct the quivering masses how the will of god should allot the gold reserves pinched from the pockets of these people, but in this case we have economists who, divinely ordained via their institutional accolades, instruct the blind herd according to the will of Adam Smith’s invisible hand. Which, like god, doesn’t exist.

So I’m trying to figure out a paper topic while using some tact. I’m not trying to offend and piss off my professor who, may I add, is one of the most highly respected professors at Vanderbilt, and one time economics adviser to Reagan.

So…my paper topic. There are a ton of areas I want to address. Most importantly I want to ensure that my research retains a Political liberalism framework like the one inherent to our democratic constitution. I’m not sure this is possible, however, without introducing statism. Whatever the case, I don’t think economics and political ideology can even be dealt with separately, so I’ll at least try. Some of my ideas involve discussing to formation and nature of:

  • Investment: Speculation and bubbles- Prevention policies
  • New Value-added Market Creation, Expansion, and development
  • Capital accumulation: concentration and centralization
  • Manufacturing v. Service industries as value adding enterprises
  • State Capitalism and Free Market Capitalism
  • Market Failures & Financial Regulation– Intervention Policies: Why consistently in the finance industry?
  • Credit and Debt markets: their dangers and shortcomings
  • Economics Schools and their policies: Mainstream economics v Austrian School v Modern Monetary Theorists (Neo-charlatan’s) v Market monetarists
  • Challenge the scientific validity of neoclassical economic models, methods, assumptions and their policies
  • Challenge the validity of Milton Friedman’s Economic theories, including his Free Market Hypothesis. (Also Keynes. And perhaps examine, compare, and contrast with that evil called “Marxism”)
  • Examine modern consumer theory, value theory, theory of productivity: Suggest alternative paradigms and their policies


Anyway. I have other things to do, quizzes to take, reading to finish. More thoughts later.

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