Real-World Economics Review

from Asad Zaman  Maeshiro (2016) in “The Capitalist Religion and the Production of Idols“, writes that Capital is the God, and Capitalism is the religion of modern society. Gauthier’s review of Nelson’s Economics As Religion states that “economics became the modern theology that replaced traditional theology as the set of doctrines that give meaning to our social reality and hope to our endeavors to improving our lives … (Nelson analyses) the works of the major twentieth century American...

from Lars Syll We are all realists and we all — Mäki, Cartwright, and I — self-consciously present ourselves as such. The most obvious research-guiding commonality, perhaps, is that we do all look at the ontological presuppositions of economics or economists. Where we part company, I believe, is that I want to go much further. I guess I would see their work as primarily analytical and my own as more critically constructive or dialectical. My goal is less the clarification of what...

I’m tinkering with the idea of a kind of periodic table for prices. Below, a very rough sketch of what I have in mind relating to administered prices and market prices as well as the sectors of the national accounts (cost prices, shadow prices etcetera have to be added). Gardiner Means defined the difference between market and administered prices (quoted in Gu (2012) on p. 13): “In an engineering economy prices are fixed by...

Review of Power and Progress, by Daron Acemoglu and Simon Johnson from Dean Baker When I saw that two of the country’s most prominent economists wrote a book on “our 1000-year struggle over technology and prosperity,” I expected a lot. I was disappointed. To be clear, there is much here to like and I’m sure that most readers will get much from it, as I did. But, the book fails to follow through adequately on the key point in its analysis, which is that the gains from technology are a...

from Lars Syll Economic theory, like anthropology, ‘works’ by studying societies which are in some relevant sense simpler or more primitive than our own, in the hope either that relations that are important but hidden in our society will be laid bare in simpler ones, or that concrete evidence can be discovered for possibilities which are open to us which are without precedent in our own history. Unlike anthropologists, however, economists simply invent the primitive societies we study, a...

from Asad Zaman In my article on “Education of an Economist”, I have explained how I gradually came to realize that all I had learnt during my Ph.D. training at Stanford University was false. I would like to make this more specific and concrete, by providing some examples. A leading example is a paper on Power and Taxes which I studied as a graduate student. But, let me start from the beginning. Leijonhufvud, in his classic “Life Among the Econ” explains how the priestly caste of the...

from Lars Syll American economist Hyman Minsky described capitalism as a “two price” system. On one side are asset prices—both financial, like government or corporate bonds, and physical like residential or commercial property. On the other, there are consumer prices—goods and services that determine current output and consumer price inflation. In the contemporary global economy, asset prices are much more sensitive to interest rate adjustments than consumer prices. The present value of...

Recently, Robert Lucas, who was called an economist, died. This is not about him, but about his kind of economics as tweets and obituaries show that it is not yet generally understood what kind of science the neoclassical macro-economist like him produced. Their most egregious failure: after decades of work, they do not even have a shimmer of anything which could pass for a neoclassical way to estimate the macro economy, even when their ideas are squarely at odds with the macro economy...

from Asad Zaman This is part 3 of a talk on Current Economic Crisis in Pakistan and Solutions, from an Islamic Perspective. A summary of the first two parts is given below. This third part explains that colonization requires the assent of the colonized, which is achieved by an educational system which teaches the inherent superiority of the colonizers, and the inferiority of the colonized. To solve the problems created by colonial institutions meant for extraction of resources, we must...

from Lars Syll People sometimes speak as if random variables “behave” in a certain way, as if they have a life of their own. Thus “X is normally distributed”, “W follows a gamma”, “The underlying distribution behind y is binomial”, and so on. To behave is to act, to be caused, to react. Somehow, it is thought, these distributions are causes. This is the Deadly Sin of Reification, perhaps caused by the beauty of the mathematics where, due to some mental abstraction, the equations undergo...