The quiet disaster of modern economic theory

Quite an interesting article with the title The quiet triumph of economics which takes the contrary view to my own view which thinks of economics as have almost entirely sold its soul to the left. So what is the case for?

Economic science has long settled what in his time was the most pressing empirical issue: whether a system of production coordinated and planned from the top could yield better outcomes than the independent actions of individual people guided by the price system.

Today, there is no serious intellectual case for the planned economy. That proponents of more central planning — through, for example, industrial policy — wrap their arguments in vague language about “long-term strategy” and “mission-oriented directionality” is a testament to the lack of economic credibility such views command.

What has actually settled the score has been the irrefutable empirical evidence of the Soviet Union, Maoist China, Cuba and now Venezuela. Not that there aren’t still plenty of economists who will still tell you about the benefits of socialism, and if you think a modern Keynesian model, with its C+I+G, is the very essence of a free market sentiment then have a look at the way our economies are now managed. The only element that still survives are the entrepreneurially managed firms that the dismal record of regulation and taxation have not quite managed to kill off. We live in a crony capitalist state, not that different from the mercantilist system Adam Smith was writing about in 1776.

And if you want a sense of how out to lunch this chap is, hard to beat this for stupidity:

Whereas John Stuart Mill, Karl Marx and John Maynard Keynes championed, when they didn’t themselves lead, such causes as women’s rights, revolution and post-war reconciliation (respectively), today’s economic scribblers largely speak to their own tribe in a language increasingly bewildering to the layperson.

Yet, Mill, Marx and Keynes were much more than practicing economists. They were eminent public intellectuals of their time, so using their trajectory as a benchmark for today’s average economist is like asking any small business owner to measure up to Henry Ford.

Mention of Keynes is bad enough, but Marx! The quiet disaster of modern economic theory goes apace.