Tuesday, March 28, 2006

What's The Biggest Economic Fallacy?

An interesting discussion at Catallarchy.


nobody.really said...

The myth of laissez-faire:

That wealth-optimizing "free markets" exist independent of society and social order. (Cost of controlling fraud and coercion, enforcing contracts, correcting market failures, generating and managing standard units of exchange, etc.)

That social order exists outside of social norms. (Whether an employee has exclusive rights to her body, or whether those rights are sold as part of the employment contract; laws of inheritance; tort law; etc.)

That property is self-evident and not socially defined. (Whether my right to smoke trumps your right to breathe clean air; whether my right to herd cattle trumps your interest in raising corn; whether my right to make and sell a copy of a book trumps the writer’s right to control her creation; whether you have a property right in your reputation, and the remedies for violation of that right; etc.)

Robert said...

Argh, agreeing with nobody.really...the pain...

McDuff said...

I like that "that supply and demand are scalar" comment on the blog. If I understand Don's intentions correctly, a lot of the comments are possibly missing the point because all their objections (the ones that aren't crackpot, like the gold bug who crawled out of the woodwork) are the end-results of economic theories with certain flawed asssumptions at their roots. I'd probably say, for my money (*ching*), it's the rational consumer and the idea that human behaviour can be abstracted down to two dimensional graphs.

I think it's high time to see some complexity theorists getting a grip on policy already.