Economists:Entrepreneurs::Blind Men:Interior Decorators
As part of my continuing series of Analogies that Should Be on the SAT, this is what Famous Entrepreneurs do (h/t Brad DeLong):
In the IBM PC era, Steve drove innovation forward with the Macintosh. This, like the Apple II, was squarely aimed at expanding the use of PCs to everyone, the “computer for the rest of us.” Everyone now knows that this was innovating too fast, and that cheaper, duller IBM machines running Microsoft’s dull clone of an earlier operating system would become the standard. But do you know how Steve changed when he realized that “the rest of us” were not going to buy the Mac? He learned that the most important early customers for Macs were corporate marketing departments (those graphics!) and worked hard to create, as he told me not long after, “the best computer company for those corporate marketers we can.”
This is what Nobel Prize-winning economists do (h/t Noah):
As Thomas J. Sargent, one of the leading proponents of the Rational Expectations Hypothesis recounted, “after about five years of doing [standard statistical tests] on rational expectations models, I recall Bob Lucas and Ed Prescott both telling me that those tests were rejecting too many good models.
“Real entrepreneurs don’t wallow in vision, they sell product.” “Real” economists, otoh…
OK, lessee. Sargent has won the Nobel, so I think he probably qualifies as a real economist. So on that count, the snark doesn’t hold up very well.
In addition, economists don’t sell product, so that point doesn’t work very well either.
Lastly, “real” entreperneurs fail more often than not. Jobs was not the model of the typical entrepreneur. He was off the chart. Pretending that one class of people are somehow infallible as a way to claim that another class suffers terribly in comparison is just bad thinking, which is, I believe, what you intend to accuse economists of doing.
There is much to criticize about economics as it was practiced over the past 3 decades or so. However, much of what passes for criticism of economics is ham-handed and simply stupid. Writing nonsensical attempts at zingers is a waste of blog space.