*Where Economics Went Wrong: Chicago’s Abandonment of Classical Liberalism*

That is the new book by David Colander and Craig Freedman, here is one short bit:

The best way of conveying our conception of what is at least suggestive of a Classical Liberal stance is to present a handful of economists who, in our view, reflect this attitude.  We have chosen six economists: Edward Leamer, Ariel Rubinstein, Alvin Roth, Paul Romer, Amartya Sen, and Dani Rodrik.  Each have, in our view, displayed a Classical Liberal attitude to methodology in important aspects of their work.

I am very much in favor of what the authors propose here, although I might reserve the term classical liberal for the more traditional political distinction.

Comments

Good thing that economics is not a "science." That would suggest that governments could one day control us ... wasn't that what people rebelled against in Asimov's Foundation series?

No. The plutocratic First Foundation tried to destroy the Second Foundation, which excelled at mind-related skills, to make sure its own political/economical domination would give birth to a Second Empire.

" The plutocratic First Foundation tried to destroy the Second Foundation..."

No the Empire was plutocratic but the First Foundation wasn't. Both foundations were run by autocratic technocrats.

Not true at all. The power of the First Foundation was founded upon the combination of the religious ascendant created by astute Mayor Salvor Hardin and the economic hegemony skillfully explored by Mayor Hober Mallow.

The greedy First Foundation is America writ large.

Finland could easily conquer Brazil.

No, it couldn't. It was Finlandized by the Soviet Union. Brazil crushed the Paraguayan invader.
Oppose Abe. Free Mr. Ghosn. He is not guilty.

Dani Rodrik??? The same guy that basically said that free markets are bad because they make it harder for governments to implement safety nets? I am not sure how classical this is but it is definitely not liberal (in the European sense)

My first reaction as well

My first reaction as well.

I think the issue here is not any specific policy but the methodological perspective attributed to classical liberalism which treats economic policy making as a craft rather than a hard scirlence. One can adopt such a perspective while being skeprical of the arguments for free trade.

I tried Amazon's "look inside," and found it tough going. In a way the sentences were very redundant, but they are also speaking of departmental intrigues to which I have no insight.

Still in broad strokes I think I approve of the initiative as well.

The life of the (ideological) economist was simpler before the China miracle. [An aside, Friedman visited China and pronounced China's form of state capitalism would never work.] I agree with Cowen: "classical liberal" means something (ideologically) different from the way the authors use the term. "Political economy" may be the more apt term. Sure, the current face-off between the Trump administration and China is a face-off between different economic ideologies. But what makes this face-off different is that the Trump administration is insisting that China adopt a classical liberal economic ideology. Why? If China's version of capitalism is bound to fail, wouldn't the U.S. want China to stay the course? Is the administration's insistence that China adopt a classical liberal economic ideology an acknowledgment that China's version of capitalism is actually superior, propelling China above and beyond the U.S.; better for China to adopt a liberal economic ideology and muddle through along with the U.S.

The current trade dispute is predominately about property rights.

The dispute is nominally about property rights, but fundamentally about ideology: the Trump administration is insisting that the U.S. have veto power over China fiscal policy to deter China's version of state capitalism. That's why the dispute can't be resolved by making a few trade concessions here, a few trade concessions there, and calling it a day. Pay closer attention to the communications between the two countries, rather than confirmation bias that the dispute is all about property rights (i.e., China stealing technology).

"The dispute is nominally about property rights, but fundamentally about ideology: the Trump administration is insisting that the U.S. have veto power over China fiscal policy to deter China's version of state capitalism."

So today Trump is a genius playing N dimensional chess versus the Chinese?

E.g.: https://www.nytimes.com/2018/11/19/world/asia/apec-us-china-trade.html

Interesting article, but there I didn't see anything in it indicating the Trump administration trying to gain "veto power over China's fiscal policy".

On "reconstruction" via Charles blow, Dr. J.H. Herz (the rabbi of England) "spoke eloquently of British 'powerful support to the re-establishment in Palestine of a national home for the Jewish people." - Edward Said

Ideology or grand theft?

Naming and shaming. Rather than highlight economists who are Classical Liberal the book could have been spicier by mentioning those Chicago boys who have strayed from the straight and narrow free market Chicago School path.

Since economics is largely politics and fashion, it's not surprising the blue team is making inroads even in the freshwater stronghold of Chicago.

Bonus trivia: I found a certificate of the sale of land from one of my Greek relatives who lived in the Windy City way way back when, who--family history says--was forced to sell his land under duress (at gunpoint is one version). I looked up the exact plot of land, and found it's now smack dab in the middle of the University of Chicago. I should get some contingency lawyer on it, if it's not barred by latches, estoppel, etc. Illinois has a history of shady land grabs as I recall.

It has a history of shady political power grabs as well. If you like your democracy you can keep it.

The University of Chicago welcomes and encourages diversity of thinking. Maybe the idea will catch on at other universities.

It is a testament to the influence of Friedman that even now people write books with the idea of showing where he went wrong.

The book seems worth it purely for the notes and quotes. Mark Blaug on Friedman: "One of the few people I could strangle with my bear hands. I feel I could actually do it." (Page 201, due to Friedman's argumentative ability).

Just claw him to death

There was a saying at Chicago: "Everyone loves to argue with Milton. Especially when he isn't there."

Sounds great, as my views are similar. Pre-ordered on Kindle. Here's a terrific James Buchanan talk on a similar subject.. https://www.youtube.com/watch?v=7_atDse06r4&t=2346s

And this one as well...https://www.youtube.com/watch?v=7SXhW9ucEW8

As far as I know, economics 'went wrong' when "the republican income statement no longer propagated to the monarchical balance sheet." In other words, when we failed to account for ALL capital changes, including territorial, genetic, cultural, normative, knowledge, and institutional, and therefore treated economics as a means of pseudo-scientific cherry-picking of measurements, under the pretense that such capital was being mobilized rather than consumed (or simply lost or destroyed).

The postwar era, by the pseudoscientific taboo against the darwinian revolution and the necessity of continuing 3500 years of environmental eugenics, and 1600 years of manorial eugenics, and 800 years of juridical eugenics, converted the discipline into the means by which to conduct war against civilization: the incremental domestication of animal man into equilibrium with his productive technologies, and his means of calculating a survivable future with them: sovereignty, reciprocity, law (tort), markets in everything, property, money, prices.

Economics is either a measure of cooperation, and therefore, reciprocity, and therefore political economy, and as such Law (tort - dispute resolution), Legislation (commons production and defense), and regulation (prior restraint by the insurer of last resort), and attendant standards of measurement, or it is merely an innumerate pseudoscience to justify the consumption of accumulated capital in pursuit of slow reversal of eugenic evolution, regression to the ancient mean, and the source of the justification for the consequente devolution of civilization and man.

Efficiency is a rather ridiculous pursuit unbound by justification for less visible capital destruction , just as is legislation is a pursuit unbound by rules of contract.

The Market Failure hypothesis is rather ridiculous since if the market produces proceeds sufficient to subsidize goods services and information, and distorting that market harmful to it.

And a hundred other nonsense-schemes we use to obscure the reversal of eugenic evolution, or the returns on conquest and sale of continents, or the conversion of intergenerational lending to temporal redistribution and the price of that risk, or the transition from physical money to digital record of credit and debt, and the end of necessity or value of distribution of liquidity through the financial system, and the inability to reconstruct that capital without such chaos we dare not speak of it.

Science is not kind. We have yet to have the necessary revolution in economics by its reunification with the law. As far as I know there is only one social science - the law (tort), legislation (contracts for the commons) and regulation (insurance) and the rest is measurement of its consequence.

This was the difference between the austrian (rule of law), chicago (rule of law insured) and saltwater (return to arbitrary rule of man) schools of economics. Today, post 2008, it is very difficult to see much more than "I dunno what to do know" from the profession, except to permute as do the physicists on dark matter, because we lack the instrumentation necessary to obtain the information sufficient to correct our theories, and therefore limited to failure (collapse) and therefore desperate incentive to correct these errors, rather than falsify the 20th century social pseudosciences in economics as we are doing in psychology and sociology, with cognitive sciences and genetics.

The Worm Turns, and as Hayek warned but could not himself answer: the 20th will be remembered as an era of the restoration of mysticism - which we more correctly state as platonism, idealism, sophism, innumeracy, and pseudoscience.

Cheers

I got about halfway through that and figured it was generated by a computer throwing together random phrases. Either that or the actual person writing it did not care to make it understandable.

Either way, I won't bother with the rest.

Pretty sure it's "did not care to make it understandable."

I got rather lost as well but I got enough of it to tell there are some coherent ideas lurking in there. It would make more sense as a post on a blog where the more unusual terms ("monarchical balance sheet," "manorial/juridical eugenics") have already been introduced and explained.

If economics is a science, then when economist's predictions fail, they'd have to admit their theories were faulty. But by making economics a religion, Tyler can insist any such failure is the result of the fallen state of the universe.

Neoclassical economics can never fail, it can only be failed.

I've had this list on my Amazon wishlist for a while now. However, now that I've been able to "look inside" I've decided not to buy it. The term "classical liberal" is used so often, it makes we want to down a bottle of Prozac.

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