Tag Archives: Economics

Interventionist causes and modularity Modularity is the mark of a type of independence from context. The same functional relationship between variables will hold in a given component of the contributing mechanisms whether or not there is a change in a different component. The total effect may change when different components contribute, but the operation of the modular mechanism will not be changed nor change them. In situations where the presence or...

Why the euro has to be abandoned The euro has taken away the possibility for national governments to manage their economies in a meaningful way — and in Italy and Greece a couple of years ago, the people had to pay the true costs of its concomitant misguided austerity policies. The unfolding of the repeated economic crises in Euroland during the last decade has shown beyond any doubt that the euro is not only an economic project​ but just as much a...

September 11, 2023, marks the fiftieth anniversary of General Pinochet’s military coup against Chilean President Salvador Allende. While it is now widely recognized that Pinochet authorized large-scale human rights abuses, there is an accompanying narrative that he also unleashed an economic miracle via embrace of Milton Friedman’s “Chicago Boys” vision of a market economy. The […]

In mainstream economic theory, institutions were long taken for granted. As the far-reaching consequences of institutional assumptions have become increasingly difficult to ignore, economists have, in recent times, made greater efforts to incorporate institutions into their models. This renewed interest in broadening economic theory to encompass economic and political institutions has centred on the analysis of property rights and transaction costs. Ronald Coase’s work has...

The current state of game theory One of the most widespread myths in economics, but also in sociology and political science, is that game theory provides “tools” that can help solve concrete problems in these branches – especially in economics. Introductory and advanced textbooks thus often speak of the “applications” of game theory that are being made, giving the impression that they are revolutionizing the social sciences. But, looking more closely, we...

On the importance of history and methodology Nowadays there is almost no place whatsoever in economics education for courses in the history of economic thought and economic methodology. The standard view among mainstream economists is that students shouldn’t think about what they are doing, but just do it. This is deeply worrying. A science that doesn’t self-reflect and asks important methodological and science-theoretical questions about its own activity,...

Economics education needs a revolution You ask me what all idiosyncrasy is in philosophers? … For instance their lack of the historical sense, their hatred even of the idea of Becoming, their Egyptianism. They imagine that they do honour to a thing by divorcing it from history sub specie æterni—when they make a mummy of it. Friedrich Nietzsche Nowadays there is almost no place whatsoever in economics education for courses in the history of economic...

Modern mainstream (neoclassical) economics relies to a large degree on the notion of probability. To be amenable to applied economic analysis, economic observations allegedly have to be conceived as random events that are analyzable within a probabilistic framework. But is it really necessary to model the economic system as a system where randomness can only be analyzed and understood when based on an a priori notion of probability? When attempting to convince us of the...

The economic consequences of tax cuts for the rich Given the lack of consensus in existing empirical analyzes and the difficulties of making causal inferences from macro-level panel data analyzes, it remains an open empirical question how cutting taxes on the rich affects economic outcomes. We believe the question is best answered by looking at the effects of major tax cuts packages, as the story of taxing the rich in the advanced democracies over the past...

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