Monday, November 13, 2006

Neoclassical Economics

Via Atrios and Ezra Klein, I came across an article by Christopher Hayes about how Econ 101 classes tend to indoctrinate students with neoclassisical economic ideas, so that they come out thinking things like the minimum wage is an abomination. The article's a quick read and very interesting, so I recommend it. The key point I take away is that when economists have to balance efficiency and fairness, they will always be biased towards effiency, because that's what they understand. They can interpret it quantitatively, unlike ideas of fairness and equity. As the article's conclusion hints at, economics can't give us all the answers. But that's precisely what neoclassical economists believe, that a market completely free of intervention will yield the best results. As Joseph Stiglitz said, neoclassical economics is "the triumph of ideology over science."

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