The crisis of economists

Behavioral economists, economists and formerly Keynes. What do the nominees have in common? They all came to the conclusion that the economic theory used up to that time was bad and that just them they have a cure, they have the "right version" of economics. But is the theory really bad, or do they just not like the theory? Are we experiencing an economic crisis or an economists' crisis?

JM Keynes
JM Keynes

The basic theories of economics are objective assessment of the subjective behavior of individuals. Even behind numbers such as GDP, individuals hide with their own personal preferences and motivations. Even behind seemingly irrational activities subjective conception of profit and benefit. Simply put, the basics of economics "with a view" describe what a person does, why he does it and how he achieves his goals.

He avoids while assessing whether what is good and what is badwhat is moral and what is not. Just dryly states the facts, only dryly shows the rules according to which we behave. Nothing more, nothing less. Based on these facts, we can then, according to (in) visible and (in) tangible arguments, show what the effort to influence human behavior can lead to.

The problem with economics as a science is that these objectively (technically) constructed rules are approached by economists who try to apply these facts retrospectively to what is happening around us in the real world, or to predict what decision will cause. And here's the problem - An economist is a man. Man has subjective preferences and motivation, according to which he acts.

That is, though the theory of economics is objective, so he treats this objective theory, comments on it, explains it and explains the current events subjectively behaving economists. These are not theories of economics, they are not the foundations of economics, which, according to behavioral economists or economists, are in crisis.

It is economists who are experiencing a crisis. The theory is perfectly fine.

Many pseudo-economists have become economists. And few pseudo-economists know economics, both in a purely "academic-theoretical" way and in its application to practical events. Economists generally fall victim to their personal subjective perceptions. In their work, predictions and analyzes, they begin to make objective theory subjective a light girl of her own thinking about the "ideal world".

They want to influence and control the development of the world. They take economics as their tool - as the perfect guide to the world of human action. Based on economics, they want to plan, establish, support, subsidize, tax. However, the economy begins to do only what it does best - adapts to the subjective perception of planners. And everyone and everything starts to look like a planner. If not, it is a bug in their system that needs to be regulated.

What the representatives of behavioral economics point out - that one behaves irrationally - is only the result of their misunderstanding of rationality as such. Behavioral economists are the best and most beautiful example of how much an economist can succumb to his subjective perception. These economists do human behavior that is inconsistent with their subjective value ladder, he explains simply by this behavior marks as irrational. Subsequently, they will say that a person can do harm with it (according to their subjective assessment). They begin to call for "state protection" to ensure the safety of man from himself.

As a result, behavioral economists only want to prevent man in it, to behave differently than the behavioral economists themselves have a set of values. They call it "mild state paternalism" - but where is she degree of moderation? After all, where behavioral economists do it subjectively feels. There is no objective assessment in economic theory for that "mild state paternalism" - if they come to this, they will declare the current foundations of economics invalid. Of course, based on their subjective feeling.

He bases his whole statement on their subjectively defined irrationality, for which there is no justification in objective theory. And so all the time - they base their theories with their statements. Nothing is proven, it is a vicious circle. But many people jump on it.

This article is also formulated in response to an article from Novinky.cz: Economics offers more accurate predictions of economic crises

0 comments

  1. Hello
    I read your article with interest, I think there is some truth and a little subjective truth in it. I'm a little sorry that you didn't sign, so I don't know who the author is and who to contact. I would very much appreciate it if you could contact me with your data.
    I am currently writing a dissertation on Econometrics as a science, so I would also just ask you for some information.
    Thank you in advance for your reply. I would prefer that the subsequent communication take place via e-mail than here.
    Thank you, best regards V.

    PS: A few remarks already publicly; you write that:

    "They are economists experiencing a crisis. The theory is perfectly fine.
    "

    There is certainly some truth to this, but I would rather lean here to explain "asymmetric information," that is, what is currently moving the world - information. A person, an economist, makes decisions based on all the information he has at his disposal, and therefore some, the best behavior (subjective) for one individual, seems irrational in the eyes of others (let's not hypothesize whether better or worse, but let's say DIFFERENTLY). Now, let's not decide if this person is badly or well informed, because such a controversy can also be kept about the first person's awareness.
    This is also related to your remark “In their works, predictions and analyzes, they begin to make objective theory a subjective light girl of their own thinking about the“ ideal world ”.

    But this mindset is based on new knowledge and information. Just as new and more complex technologies are evolving, so are more complex evolutionary theories emerging in economics, which the rational person should at least pause and give them a more detailed analysis, not just condemn them as a follower of an evolutionarily "older" ideology. .
    By this he means the assumption with which an economy based on rational behavior works - a rationally thinking individual uses all available information to make his decision, but what if he has the information wrong, incomplete, imperfect, or at least misinterpreted it, what then?

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