Ann M. has asked me to write about why economics is so wrong.
She was particularly incensed by how wrong economic academics were in failing to see the disaster that is Obamacare.
I spent two years in economics graduate school before realizing that economics didn’t make any sense.
I originally went into economics to study the work of Wesley Mitchell on business cycles which appealed to me as a fundamental way to grasp the economic system. Turns out that business cycles exist but are not understood by anyone.
I then mastered the whole field of economics and was disappointed to learn that every part of economics was based on fantasy.
- There is no such thing as a market based on the convergence of supply and demand around a price. Nearly everything is a fuzzy connection. Every price and exchange is based on a Transaction with many, often dozens of converging factors. The price of a house or rental of a condo are based on taxes, interest, contracts, liens, condition of repair, maintenance, and much more. There is no convergence of supply and demand. The same is true for hiring a lawyer, shopping for food and nearly every other transaction. I wrote a long article on Transaction Based Economics.
- There is no reality to the concepts of ‘capital’ or ‘labor’. Capital is really a physical representation of knowledge. The Mississippi is constantly changing depth. A good captain originally had it all in his head along with soundings every few hundred feet. Then maps became better and were kept up to date. Then sonar came into play, followed by radar. All of it is still knowledge in different forms. Since capital is knowledge, post war cities can be rebuilt to functioning levels in only months after being totally burned down. Labor is even more obtuse and inexact except where unions eliminate the vast differences in productivity of each human in each situation.
- The basis and origins of modern commerce are never investigated in economics. Ever hear of an economic study of meritocracy? No, yet it is the core of productivity.
There is much more that is fantasy and vapid arcana in economics: too much to waste my time on.