Rationality and Rabbit Holes
by Paul Krugman
Oct 10, 2017
https://krugman.blogs.nytimes.com/2017/10/10/rationality-and-rabbit-holes/?comments#permid=24390908
Interesting - Prof. Krugman admits that "rationality is a lie" but "a noble lie". For a scientist to acquiesce to building a whole theory, and an academic discipline (neo-classical economics) on a lie, is atrocious and unconscionable.
This leads to generation after generation of students in economics being brainwashed with the ridiculous notion, that "we know how the economy works", that economics is optimizing and self-correcting, that there is "an invisible hand" guiding "the markets" to perform optimally and to everyone's "maximum utility".
Especially for those who just sample economics classes, and then become politicians and policy-makers, this brainwashing with the lie that is neoclassical economics leads to ridiculous, full-throated assertions that "government is the problem", and that if one only allowed "the markets" free reign, everything will be just dandy. As a society, this nonsense can lead to disastrous decisions, or omissions, as evidenced by Mr. Greenspan's infamous statement after the financial meltdown of 2008.
For what its worth, here is a link to my more detailed rant about neoclassical economics.
http://rantingsofgrumpyoldguy.blogspot.com/2017/10/debunking-neo-classic...
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