The first fair and deliberate exchange in world history

From The Wealth of Nations:

“Nobody ever saw a dog make a fair and deliberate exchange of one bone for another with another dog. Nobody ever saw one animal by its gestures and natural cries signify to another, this is mine, that yours; I am willing to give this for that….But man has almost constant occasion for the help of his brethren, and it is in vain for him to expect it from their benevolence only. He will be more likely to prevail if he can interest their self-love in his favour, and show them that it is for their own advantage to do for him what he requires of them. Whoever offers to another a bargain of any kind, proposes to do this. Give me that which I want, and you shall have this which you want, is the meaning of every such offer; and it is in this manner that we obtain from one another the far greater part of those good offices which we stand in need of.”

On the other hand, it could be the resurrection of an economy recovering from the grip of a socialist experiment, Venezuela say, in about a year or two from now.

Cartoon via Powerline – The Week in Pictures

Marginal analysis as it ought to be done

This is my own version of the marginal revenue and marginal cost diagram with the traditional version a complete waste of time. The traditional version has a series of lines many of which can never be drawn (such as the demand curve) with the ultimate point to show the price-quantity configuration for the sale of a single product. The conclusion is that if a firm wishes to maximise profitability on the sale of some good or service, it will price the product just exactly where a lower or higher price would lead to a lower return over cost. Fatuous and useless, with various bits of the real world left out, such as the actual ability to work out the effect on revenue of changing a price. Modern micro truly is as useless as modern macro.

The above diagram – discussed fully in my Free Market Economics – brings in a number of crucial factors:

  • it is about whether some decision should be made rather than deciding on what price to charge
  • it is about trying to make a decision in the face of a future that can never be foretold but is filled with endless uncertainties
  • it recognises that there are costs that almost invariably must be borne before there is a return [Area A]
  • costs continue even after revenues commence and only eventually, in a profitable venture, will revenues exceed costs [when B = A]
  • the point of origin is the present moment when some decision must be made – all of the lines drawn are the expectations of the decision maker
  • reality may turn out to be much different, with losses instead of a net positive return
  • only when total revenue and total costs are equal – that is, when the expected addition to revenues is equal to the expected addition to costs (when MR=MC at the moment the decision is made) does the decision become profitable

This is the way a business, or anyone else for that matter, makes a decision: in the present with only one’s own conjectures as a guide.

I will lastly mention a very nice note I received the other day:


Just finished reading your book Free Market Economics and wanted to congratulate you.

I have read plenty of economic texts, but yours is the best by far and helped crystalize a number of things that have been swirling around in my mind.

Great work.

It was truly appreciated. You can get a copy for yourself here. I didn’t make any of it up myself. It is just a distillation of classical theory, the economics of John Stuart Mill and his contemporaries.

Only one book written in the twenty-first century will explain the classical economics of the nineteenth

At Quora, this question: What are 25 economics books that you would recommend (preferably classical and neoclassical)? My answer:

If you are seriously interested in understanding economics you need to understand classical economic theory, the economics of the period from the publication of Adam Smith’s Wealth of Nations in 1776 until the marginal revolution began about a hundred years later in the 1870s. And if you are interested in understanding classical economic theory, you should read the third edition of my own Free Market Economics: an Introduction for the General Reader.

Modern economic theory has fallen into very hard times since its classical period, and is now incapable of explaining almost anything that matters. My FME third edition is entirely supply-side, explaining how classical economists understood the operation of an economy which is how an economy actually does work.

From the marginal revolution with its focus on marginal utility, through to the Keynesian Revolution of the 1930s with its introduction of aggregate demand, economic theory has looked at economies from the demand side. And while it has a superficial appeal, no economy is driven by demand. All economies are driven from its production side. People buy more where more is produced. If you want to understand what allows people to demand, you first have to understand what makes them capable of producing.

I will just add that if you try to read classical theory without some preparation for the changes in the terminology between economics today and economics then, you will miss the point. This is a paper you can find at SSRN which will help you get past what is a quite formidable barrier.

Classical Economics Explained: Understanding Economic Theory Before Keynes

Steven Kates


Since the publication of The General Theory, pre-Keynesian economics has been labelled “classical,” but what that classical economics actually consisted of is now virtually an unknown. There is, instead, a straw-man caricature most economists absorb through a form of academic osmosis but which is never specifically taught, not even as part of a course in the history of economics. The paper outlines the crucial features that differentiate modern macroeconomics from classical theory, with the emphasis on what an economist would have understood as The General Theory was being published. Based on the differences outlined, a model of classical economic theory is presented which explains how pre-Keynesian economists understood the operation of the economy, the causes of recession and why a public-spending stimulus was universally rejected by mainstream economists before 1936. The classical model presented is an amalgam of the final edition of John Stuart Mill’s 1848 Principles of Political Economy published in his lifetime and Henry Clay’s influential 1916 Economics: an Introduction for the General Reader, a text which was itself built from the economics of Mill.

Here’s the link to the paper.

Classical Economics Explained: Understanding Economic Theory Before Keynes

Macro Follies returns

The only movie that has ever been made from a book I wrote. The movie was put together by that genius, John Papola, producer of the greatest economic video ever, The Keynes-Hayek Rap. And as noted in the credits for Macro Follies, there I am found in truly stellar company:

Special Thanks to Russ Roberts, Steven Kates, Larry White, Steve Horwitz, James Adams and Steve Fritzinger

As for the book, if you are looking for a Christmas present, let me recommend my Free Market Economics which is the book from which the movie was made. It is the only economics book written in approximately the last 150 years that is built on classical economic principles. As it says at the Book Depository website

“In this thoroughly updated third edition of Free Market Economics, Steven Kates assesses economic principles based on classical economic theory. Rejecting mainstream Keynesian and neoclassical approaches even though they are thoroughly covered in the text, Kates instead looks at economics from the perspective of an entrepreneur making decisions in a world where the future is unknown, innovation is a continuous process and the future is being created before it can be understood. Key Features include: * analysis derived from the theories of pre-Keynesian classical economists, as this is the only source available today that explains the classical pre-Keynesian theory of the business cycle * a focus on the entrepreneur as the driving force in economic activity rather than on anonymous `forces’ as found in most economic theory today * introduces a powerful though simplified model to explain the difference between modern theory of recession and classical theory of the business cycle * great emphasis is placed on the consequences of decision making under uncertainty * offers an introductory understanding, accessible to the non-specialist reader. The aim of this book is to redirect the attention of economists and policy makers towards the economic theories that prevailed in earlier times. Their problems were little different from ours but their way of understanding the operation of an economy and dealing with those problems was completely different. Free Market Economics, Third Edition will help students and general readers understand classical economic theory, written by someone who believes that this now-discarded approach to economic thought was superior to what is found in most of our textbooks today.”

You can order a copy here. For anyone who wants to get a sense of how an economy works, and also why government intervention beyond a minimum creates harm, this is the place to go. Of course, you might instead decide to save your money and have an even better Christmas next year, but you might also instead just think of it as helping to build your own human capital, as well as helping you to contain your rage watching Malcolm and Co butcher economic policy before Bill and Co are allowed to take over who will do even worse.

Who would use a word like ‘phantasmagorical’ in an economics text?

I met with my publisher today and we briefly discussed a third edition of my Free Market Economics. It’s now on the agenda but distantly since I have pretty well said what I want to say. I bring this up for a series of additional reasons, and let me start with this much appreciated comment on a previous post:

Hi Steve

Off topic here (apologies Cats) but I wanted to congratulate you for finding an opportunity to slip the wonderful word ‘phantasmagorical’ into your book . To find such a word embedded within an economic text was a great little ‘Easter egg‘! I am about half way through and am thoroughly enjoying it. I only studied economics in high school but have always had more than a passing interest in the subject. Jump forward 20+ years and I am bashing my way through an MBA and found your book really relevant for my elective unit on ‘Entrepreneurship’, a great refresher on some of the base principles of the subject and a refreshing perspective on the functions of supply and demand in any economy.

Cheers Nathan

And then, also just today, there was this from a student who is studying from the book as part of an online course I run. He had a question to ask about a coming test, but then wrote this:

For the book, I have to say I really enjoy it and though I really hope you don’t mind in me giving some suggestions as such. Firstly just on the premise on the book i could see it being a love hate for some students just as it continuously goes through as an argument of sorts rather than laying down the facts as they should be, if you know what I mean. Not a dig just meaning that if it were more just this is as it is then we could just focus on that.

The second one is on the explanations for say’s law and the business cycles. I have kind of found for me in learning it I keep trying to apply it to real life as we should and ended up looking through all of the recessions in the past. And actually looking at them it makes the classical views blatantly obvious and correct even in the great depression where there wasn’t a reduction in the demand but that the economy was rapidly changing to the more modern economy with the setting of the public market for stocks. Not sure if I explained that quite right, though what I am getting at is if in the explanations or even in an assignment we were looking at what has caused every recession it would really hammer in the concepts of the book and prove that they in fact are correct and that Keynes is some funded by government full of shit fraud.

Again really enjoying the book now that I have got into it, just more on the output as I really hope it would become universal proof of the correct concept.

I will think about what I can do now that the issue has come up, but I have to say I am very reluctant to mess with the text again. It’s not perfect, but it remains the only anti-Keynesian textbook available anywhere in the world and there’s much else in it besides.

My book launch

There will be few moments in my life as exquisite as Wednesday when Peter Costello* came up to the University to launch the second edition of my Free Market Economics: an Introduction for the General Reader. It was a rare moment when the political side of my life, the academic side and my recognition of the importance of classical economic theory were brought together all at once, and was a moment I could share with my friends and family.

I may sometimes give the impression that the book is mostly about Keynesian economics and macro which is not the case at all. That is why I started it out, but the oddest thing for me was to find that as I wrote each chapter, that I harboured views that are far outside the standard textbook treatment. This starts even before we get to supply and demand, but I promise you this, by the time you finish with supply and demand you will know you are in a different economic world. Of course, there are demand-side market forces that limit the price that can be charged for a product, and forces on the supply side that put some kind of lower limit on the price. But the notion that there is a single equilibrium price for a product where two lines cross on a two-dimensional plane is unsupportable by even the most casual empiricism. As I point out to my classes, the price of a cup of coffee, starting from the $1 at the 7-11, to prices four and five times higher that are charged, all within a mile of the front door of our building, ought to make you appreciate that there is something else. I do teach the traditional S and D analysis, but my students also are made to understand that prices are not set by these two curves, but by entrepreneurs who are making decisions about their optimal pricing strategy, given all of the forces of the market that surround them. And most importantly, I do not let them forget that the information in a demand curve can never be known by anyone, ever. It is strictly for teaching purposes. Entrepreneurs in the real world have to work these things out for themselves in real time.

But if I have a villain on the microeconomic side, it is the MR=MC analysis and diagram. If economics had gone out of its way to find some means to cloud minds about what goes on in markets, I don’t think they could have come up with anything worse.

mc equals mr

I teach Keynesian economics, of course, but I won’t teach that. You can find it discussed in my book, but it’s in an appendix. Over the years of teaching this diagram and the explanations that surround it, I found that after going through markets and then supply and demand, you would come to this and stop a class cold. Eventually some could draw the diagram and some might have seen the point, but there would not have been many. I do, of course, teach marginal analysis, but not like this. If you would like to see how I do it, as just part of the way this book is different from any economics book you know, Quadrant Online put up a few pages of the book under the heading Margin of Success.

As I said at the end of my presentation, there are three features of the book that I stress over and again: the role of the entrepreneur, value added and the crucial importance of uncertainty. Each is part of what must truly be understood by marginal analysis: entrepreneurial decision making in the face of the unknown future. And the point I make about the entrepreneur, as I said on the night, is that we now talk about market forces and the invisible hand, but the reality is that there is only one force that matters in a market economy, and that is the entrepreneur. And I don’t mean entrepreneur as in someone who innovates and causes change. I mean entrepreneur as in the captain of a ship in the midst of a storm a thousand miles from land.


* For non-Australians, Peter Costello is the nearest equivalent we have to Ronald Reagan. He ran the economy for eleven of the best years economically this country ever had. Not only was the Asian Financial Crisis a non-event when every one of our major regional trading partners was in recession, but we ended up with 5-6% at the same time. And not only budget surpluses year after year, Australia was, until Labor took over, the only country in the world that had ZERO DEBT! The momentum given to the economy by Costello meant that we travelled through the GFC with hardly a ripple. Our problems have come since due to the debts and deficits Labor piled up. We will never see zero debt again in anyone’s lifetime, and will be lucky even to see our budget balanced any time this side of 2025.

Economic Council of Tribal Elders

This is a self-explanatory letter I have written to Professor Richard Lipsey. It was a Saturday afternoon, my most whimsical moment of the week. I have re-read it now on Monday morning, my least whimsical moment, and it still works for me. While my proposal for encouraging change was not intended to be taken literally, something really does need to be done.

Dear Professor Lipsey

I hope you won’t mind my invading your email account but following your posting on the SHOE website, I wanted to continue that conversation because I think this is an issue of no small importance. I have posted the correspondence up on my blog so you can look at my more considered thoughts here.

About myself, I will mention only four things: (1) Canadian born and educated though living in Australia for the past forty years, I have learned and taught from your Positive Economics; (2) I have been trying in my own way to save the history of economic thought from oblivion an outcome it seems destined to achieve [see my Defending the History of Economic Thought (Elgar 2013)]; (3) I am in the smallest of all current heterodox groups – the John Stuart Mill Classical School of Economic Theory for which I have written the textbook: Free Market Economics: an Introduction for the General Reader (Elgar 2nd ed 2014); and (4) virtually all of my career was spent in politics as the Chief Economist for Australia’s national organisation of employers which has warped my approach to issues, both economic and academic (see below).

I think there is a crisis in economics at the moment that no one is facing up to. The Queen supposedly put her finger on it by asking why no one had forecast the GFC. I think the crisis comes from no one being able to guide us out of the recession. You will have seen that I think that is because of the Keynesian models we have embedded, on which I may be right or wrong. But what troubles me is that no one has made a serious effort to revisit economic theory and worry over where the problem is. If I were to be classified using any of the modern schools, I would probably find myself, like you, within the Evolutionary Economics camp (my close associate at RMIT is Jason Potts who I understand is well known in this area). But whatever fuss has been made seems very muted, so muted I have been unable to detect anything at all.

In fact, until I read your post, I had no idea that you had these views. There may be many others who hold views similar to your own, who are, like yourself, individuals with genuine stature who are concerned about the way things are going. The minute I saw your post, I knew whatever thoughts others may have had to take potshots at me – and there may well have been none – they would be instantly suppressed. I am also very conscious of how narrow economic theory is, but as presently designed, it is both seductive and empty. The MC=MR diagram drives me crazy, and I won’t teach it, and in fact, instruct anyone who has ever come across it, to do all they can to forget it. Yet everyone who has learned it, cannot be lured away from its seductive grasp. I make the notion of equilibrium something that should be shunned and a concept devoid of serious economic content but on it goes even though economies are absolutely open ended and with so many cross-currents, the very notion is pointless. I think the stimulus was as deranged as anything I have ever seen inflicted on a peacetime population in my life but seriously, aside from myself, no one seems to be taking up arms against the underlying theory that has led to these policy outcomes. But my point is that although everyone can understand what is in my text, their careers would be cut dead if any of them ventured into this kind of territory, enemy territory to the mainstream (although a couple of them have, brave souls).

The nature of what we teach and the way we restrict what is in and what is not in, so far as a mainstream department goes, is astonishing. For whatever reason, the latitude given is near zero. You could drop your first edition into any course today and it would hardly make a difference compared with the latest, most up-to-date text just off the press. I came back to teaching after 35 years away and I didn’t have to learn a single new thing.

I don’t know whether there is something that can be done. But an Economic Council of Tribal Elders made up of people like yourself seems to me to be the only answer. A student uprising, as at Manchester and discussed by Hugh Goodacre, can only go so far but must stop. No one will pay attention, and I’m afraid, no one should either. But persons such as yourself in league with others of a similar stature, people who are no longer worried about contract renewals and finding their next job, can make the difference that I think needs to be made.

You must know others like yourself who are dissatisfied with the mainstream plod. Perhaps it is too hard, but perhaps it is also not too late.

With kindest best wishes.

The worst possible question in economic theory – where will the money come from?

I went along to hear Joe Hockey talk about tax and the world in 2055, and while I understood the problem, I was underwhelmed by the analysis. It is one of the legacies of modern macroeconomic analysis, one of the absolute worst, to continually think in terms of money and not in terms of value added. This is one of the consequences of thinking in terms of aggregates which can only be denominated in money values. But once you sink into money as your mode of thought, you are almost never going to get your head around the problem, which is where will the capital stock come from, and how can we be sure that the capital we are building today is actually going to strengthen our economy over the longer term.

Money is all right as a means of thinking about accounting, which a budget basically is. It’s a balance sheet writ large. It is also why the central concern of those who don’t know any better is merely to try to balance the budget, as if money-in equals money-out is the issue.

The issue is resource use. All forms of production use up resources. Only some forms of production create more value than is used up. The only source of value adding production is the private sector. Governments virtually never create value, other than when they have a monopoly in the production of something, and even then it could inevitably be done better by the private sector. But if a government has a monopoly, they can create value, but the outcome is still far from being as productive as it might have been.

You need to divide all forms of production into three categories: wealth creating, welfare and waste. Only wealth creation makes you better off, and that is almost entirely the province of business. Welfare and waste are the province of government. And while I have no in-principle objection to welfare expenditure that doesn’t eat too deeply into the wealth-creation process, I have a large objection to welfare spending that does. Waste, of course, should be eliminated to the greatest extent possible. But if you are looking for a greater ability to spend on welfare, it is value creation that must come first.

As it happens, the only economics text in the entire world that truly examines and explains value added, outside of the typically useless discussions sometimes found in looking at the national accounts, is my Free Market Economics. If you know of another, feel free to let me know. If you don’t know of another, then you should read my book. It is only if policy makers understand value added properly, and are not muddling themselves up by thinking in terms of money, is there even a ghost of a chance they will get their policies right.

And if you don’t want to take my word for it, here is John Stuart Mill trying to say exactly the same, in Book I, Chapter V, Paragraph XVI of his Principles of Political Economy, the greatest book on economic theory ever written.

It is the intervention of money which obscures, to an unpractised apprehension, the true character of these phenomena. Almost all expenditure being carried on by means of money, the money comes to be looked upon as the main feature in the transaction; and since that does not perish, but only changes hands, people overlook the destruction which takes place in the case of unproductive expenditure. The money being merely transferred, they think the wealth also has only been handed over from the spendthrift to other people. But this is simply confounding money with wealth. The wealth which has been destroyed was not the money, but the wines, equipages, and furniture which the money purchased; and these having been destroyed without return, society collectively is poorer by the amount. It may be said, perhaps, that wines, equipages, and furniture, are not subsistence, tools, and materials, and could not in any case have been applied to the support of labour; that they are adapted for no other than unproductive consumption, and that the detriment to the wealth of the community was when they were produced, not when they were consumed. I am willing to allow this, as far as is necessary for the argument, and the remark would be very pertinent if these expensive luxuries were drawn from an existing stock, never to be replenished. But since, on the contrary, they continue to be produced as long as there are consumers for them, and are produced in increased quantity to meet an increased demand; the choice made by a consumer to expend five thousand a year in luxuries, keeps a corresponding number of labourers employed from year to year in producing things which can be of no use to production; their services being lost so far as regards the increase of the national wealth, and the tools, materials, and food which they annually consume being so much subtracted from the general stock of the community applicable to productive purposes. In proportion as any class is improvident or luxurious, the industry of the country takes the direction of producing luxuries for their use; while not only the employment for productive labourers is diminished, but the subsistence and instruments which are the means of such employment do actually exist in smaller quantity. [Bolding added.

I think my version is easier to understand, but this confusion of money with wealth causes endless damage. You may, of course, disagree with Mill and think that following the money is all there is to it. But it’s not, and if you wish to understand why, read Mill, or again let me suggest, the second edition of my Free Market Economics, especially Chapters 3 and 5.

The Australian School of Economics

There really is a different way of looking at economic issues in Australia, which is why we are still one of the most successful economies in the world. Two items from the news today, both of which go entirely against the world consensus on economic management. First, from The Australian, Rate cuts failing to bite: RBA. The opening paras:

INTEREST rate cuts are losing the ability to stimulate the economy, with the Reserve Bank warning that it is up to the government to take measures to help revitalise growth.

In a frank admission of the limits to the influence of central banks, Reserve Bank deputy governor Philip Lowe said consumers, businesses and governments were not responding to the extraord­inarily low interest rates that would once have sparked an inflationary debt boom.

The notion that interest rates can be too low is something almost no one can follow if you start with a standard macro model. Arbitrarily lowering interest rates will, in fact, make things worse but who any longer understands even why that might be the case. And if you are looking for what is truly unique about how we go about things, think about this, from the new Secretary of the Treasury, John Fraser:

[Fraser] declared to the Senate Economics legislation committee: “I do not resile from the point that I do not think spending our way out of lower economic activity is the way to go.”

Once, such a view was uncontroversial. Today, practically every international economics organisation preaches the opposite.

How against the consensus grain is all of this. If you want to find your way out of recession, keep interest rates up and lower public spending. And if you are looking for a theoretical explanation of why this is so, there is nowhere else to go other than the second edition of my Free Market Economics. And if you would like some idea of just how unique this book is, this is from an article I am in the midst of writing on the role of the entrepreneur in economic theory:

I have examined each of the following introductory texts because they happened to be on the shelf in our library, and there is either no reference to the entrepreneur found in the index, or the text contains only a perfunctory mention, never continuing for more than a page: Abel and Bernanke (2005); Blanchard (2006); Lipsey and Chrystal (2007); Mankiw (2007); McConnell and Brue (2008); McTaggart, Findlay and Parkin (2006); Parkin (2008); Samuelson and Nordhaus (1995); Sloman and Norris (2010); Stiglitz and Walsh (2006). It is clearly possible to discuss the operation of a modern market economy without mentioning the single most important function in allowing the economic system to work. There is not the slightest doubt that even if the most recent editions had been to hand, nothing would have been in any way different.

The Australian School of Economics can explain the role of higher interest rates, balanced budgets and the entrepreneur and with these concepts in hand explain how an economy works and what needs to be done to get recovery firmly in place.

Invaders from planet stupid

A very interesting post by Steve Hayward at Powerline with the title, First they came for the Sociologists. But in spite of its title, the post is mostly about economics.

The one field in the social sciences where there is the least presence of post-modern oppression-“privilege” types is Economics, which prompts me to propose the theorem that the presence of politically correct nonsense in an academic department is inversely proportional to the emphasis placed on rigorous regression modeling in the discipline (or knowledge of ancient languages).

I personally think modern economics is well to the left as an academic subject. The veneer of bourgeois respectability is important to economists if their economics message is to influence the political class. Mainstream economics is no longer about the need for free markets, but the importance of controlling free markets. It may be disciplined by various sets of data, but economic theory is no longer Adam Smith. It is, instead, the nearest thing to Marxism that still retains that overlay of markets, best represented by Keynesian theory. Keynes disarmed the Marxists of his time by siding with them over Say’s Law, which had perennially been the province of the economics far left and central to their critique of capitalism.

I have half a chapter on this in my Free Market Economics, beginning with the notion of “perfect competition”. “Perfect” implies that this is the ideal, and is contrasted with “imperfect” competition. Perfect markets cannot exist, given its definition (e.g. perfect knowledge). All other markets are imperfect, which leaves much room for intervention at every turn.

But even with my continuous criticism of mainstream theory, I believe there is only one economics. The “political economy” department at Sydney is merely a cop out. Whatever sociological version of economics that might be taught, unless they also do supply and demand and marginal analysis along with the full panoply of mainstream theory, it is useless, other than as a leftist critique of markets. This is a quote from Greg Mankiw who was on the other end of these barbarian invaders:

Those who attended either of the sessions I was involved with at the ASSA meeting know that the audience included some hecklers. During the first session, I was the target. During the second, Larry Summers was. (At one point, the moderator Bob Hall threatened to call security.) Here is a Washington Post article about the hecklers.

After the first session was over, one of the hecklers came up to me and asked, “How much money have the Koch brothers paid you?” My answer, of course, was “not a penny.”

I don’t find it odd that people disagree with me. I am always open to the possibility that I am wrong about lots of things, and I much enjoy talking with students and colleagues who have views different from mine. But I do find it odd that people who disagree with me are sometimes quick to question my sincerity. If I am wrong, it is sincere wrong-headedness, not the result of being on some plutocrat’s payroll, as some on the left want to believe.

The hecklers probably limit their own effectiveness by questioning the motives of those who disagree with them. I have found that to convince other people, it is usually best not to assume your own moral superiority but rather to talk with them as equals who just happen to have a different point of view.

Personally I think Greg was too mild in his criticism of these know-nothings. I disagree about a lot, but I am never in doubt that the economists I deal with know a lot more about economies than their non-economist critics, a lot lot more and within a proper contextual setting. The true worry is how sympathetic the Washington Post article is to these invaders from the planet stupid.