Economics Might Be Changing

My previous post reflects a perspective based on a set of information. My information set is rather limited. While economists would like to gloss over the information limitations because they are mathematically annoying, these information problems are the greatest problems which people face when making economic decisions.

Economics is changing. Some of the George Mason economics, at least, are skeptical of the claims that your average mainstream economist will try to make. This probably reflects a growing awareness among the all economists that, say, applying the Coase theorem willy-nilly doesn't really make any sense. While I don't respect the politics of the GMU economists or the way that these political biases manifest themselves in their work, I will admit that they're probably on a better track than many of the prestigious mainstream economists, and some of their offhand blog posts are probably much more insightful and informative than many of the journal articles written today.

Check out "Evolutionary and Institutional Economics as the New Mainstream" by Hodgson, which I found on the Pluralist Economics Review. So far it's an excellent journal. The article is well-worth reading.

Mainstream economics:

• Assumes a can-opener. This is not just a cliched joke.
  
• Looks at the individuals as homogenous rational agents rather instutionally-influenced.
• Has "a preoccupation with technique over substance" (p.18, Blaug).
• Basically ignores the other social sciences.
• Must change in order to make progress.

The article quotes Kenneth Arrow as saying that the "biological is a more appropriate paradigm for economics than equilibrium models analogous to mechanics" (Arrow 1995:9). It's clear that the top people in the field (Hodgson is one of them) see the flaws in economics. So why is it a controversial thing for me to note the same thing?

As I continually try to point out, the real world is a world of "reasonably bright individuals [maybe that's a little far] in information-poor environments" [with a surplus of distracting noise] rather than "infinitely bright agents in information rich environments" (Hodgson 2007:11).