Coase on Mainstream Economics
‘It is suicidal for the field to slide into a hard science of choice,’ Coase writes in HBR, ‘ignoring the influences of society, history, culture, and politics on the working of the economy.’ (By ‘choice,’ he means ever more complex versions of price and demand curves.)
U Chicago, my daughter’s college, sends me interesting emails now and then, undoubtedly in hopes that I’ll give them money. The latest had this interesting link to an interview with one of their favored sons:
Bloomberg Businessweek (November 30, 2012)
Urging economists to step away from the blackboard
At 101, Nobel laureate Ronald Coase attempts to launch a journal that focuses on the economic study of firms and people over abstractions and statistics.
Cross-posted at Asymptosis.
I disagree when Coase says “the problem runs deeper: Economists study abstractions and numbers, instead of firms and people.” I think that in order to understand the abstractions and numbers associated with economics you have to have the basic understandings of how firms and the labor force work. Without the basic knowledge of how supply and demand work within the economy, and the effects of GDP in the long run how could someone call themselves an economist? Wouldn’t they be just a mathematician? I do however agree that “ignoring the influences of society, history, culture, and politics on the working of the economy” is not acceptable. You can learn a lot from past mistakes and successes. As societies evolve and change the short run economy will also change.