Economics doesn't describe the real world

Michael Panzner has unearthed a couple of good items explaining how the assumptions of classical economics are plain wrong - we are not rational - and so the results are also wrong.

And there I was, planning to use some of my Christmas holiday reading an economics primer.

Pro-am economics

But there are at least 15,000 professional economists in this country, and you’re saying only two or three of them foresaw the mortgage crisis?

Ten or 12 would be closer than two or three.

What does that say about the field of economics, which claims to be a science?

It’s an enormous blot on the reputation of the profession. There are thousands of economists. Most of them teach. And most of them teach a theoretical framework that has been shown to be fundamentally useless.

James K. Galbraith, 31 October 2008 (htp: Jesse)

And I thought I ought to start reading academic textbooks on economics. It seems that the difference between an amateur and a professional is that the latter gets paid.

If at first you don't succeed - give up.

Think tank Policy Exchange has stirred up a hornet's nest with the suggestion that people in poorer Northern areas should quit backing a loser and head for the South-East, or the Golden Triangle.

Or the Golden Circle:


Isn't this the rational, liberal-economic thing to do? Or is mankind something more than a calculation in money terms? Is there any one measure for Man?

Are liberal economists rational? Do they describe the world as it is, or as they think it should be? Would it be dangerous for us to follow their prescriptions, if others elsewhere took a different view?

An after-thought: would it not be more rational to head for Scotland? Free tertiary education, more money spent on care for the elderly, etc?