Translation: Here on Planet Earth, things don't always work like an elegant theory says they ought to.
Image credit: Lars H. Rohwedder/Wikimedia
No peeking now, who wrote this and when?
The classical [economics] theorists resemble Euclidean geometers in a non-Euclidean world who, discovering that in experience straight lines apparently parallel often meet, rebuke the lines for not keeping straight as the only remedy for the unfortunate collisions which are occurring. Yet, in truth, there is no remedy except to throw over the axiom of parallels and to work out a non-Euclidean geometry. Something similar is required today in economics. We need to throw over the second postulate of the classical doctrine and to work out the behaviour of a system in which involuntary unemployment in the strict sense is possible.
The General Theory of Employment, Interest and Money: Chapter Two
Was it Paul Krugman, Dean Baker, or any of the other modern economists who aren't of the "classical" persuasion? No. Is it me, writing about the sorry state of economics versus reality? No.
It's John Maynard Keynes, writing in 1936. Keynes was the economist who best understood the implications and remedies of the Great Depression. In part, based on what I've read of this book so far, this is due to his habit of checking economic theory against the real world, and noting where the two aren't related.
I'm often struck by the parallels between creationism and classical economics. Each is based on beliefs that don't actually correspond to reality, yet they persist. The arguments of Darwin's or Keynes' day are much the same as today, except for anyone who has followed the issue, it's even more clear that the old theory isn't just wrong, but spectacularly so.
2 comments:
I have the profound satisfaction of having guess right. Today Keynes, tomorrow the lottery! :D
People so often seem to love a good theory more often than they love a fact betraying that theory.
I'm not too sure that's a logical progression, but good luck!
All theories have limitations. Testing them against reality is how we find those limitations, and sometimes that's a humbling process. One of the differences between scientists and cranks is that the former understand this, and the latter usually don't.
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