More Self-Criticism

And while I am on the subject I see Krugman makes the case that “real economics”, aka supreme belief in market magic, may well not be that real after all. Then he throws this in:

“Yes, much of micro can be derived rigorously from individual maximization plus equilibrium; but why, exactly, does that make it right?”

Well.

In fact it makes it wrong.

Individual maximization is a pipe dream that only exists in the heads of utopian economists. And equilibrium. Have you ever seen one? Seriously? Neither have I.

Add the two together and you have a wonderfully coherent, internally consistent, beautiful system that portrays nothing. It looks good. It is vacuous nonetheless.

To think that good macro has to be built on this vaporware is just awesomely foolish.

Yet, apparently, according to luminaries like Robert Lucas, “good” economics is built precisely on such vapor.

No wonder “real economics” is of little to no value.

Maybe we should try real world economics.