James K. Galbraith: Dismal Economics

James K. Galbraith has published a very eye-opening article Dismal Economics. I was almost discouraged from signing up for a free subscription that allowed me to see a couple of articles a month on Project Syndicate. Here is the introduction.

Although neoclassical economics relies on assumptions that should have been discarded long ago, it remains the mainstream orthodoxy. Three recent books, and one older one, help to show why its staying power should be regarded as a scandal.

He then goes on to review 4 books. There are so many revelations in this article, that I cannot quote them all. One of the first ones I came to is:

It was this latter group that shifted the discipline’s focus from social classes (landlords, capitalists, workers) to individual units (households, firms) and declared that these units interacted to maximize not “surplus” but “utility” and efficiency. The marginalists also introduced a “sophisticated” mathematical technique to the field: namely, the differential calculus, with which one can show that maximum efficiency is reached when firms are small and competitive, as this tends to reduce profits to zero.

He then goes on to criticize some of what I have always considered to be bêtes noires of Economics, but even criticizes some of my idols. The critique of my idols has opened my eyes to things about them that I have missed noticing before.

I am going to have to decide which of these books to read first,

Mason Gaffney and Fred Harrison, The Corruption of Economics, Shepheard-Walwyn Publishers Ltd., 2006 (first published 1994).
Stephen A. Marglin, Raising Keynes: A Twenty-First-Century General Theory, Harvard University Press, 2021.
Alessandro Roncaglia, The Age of Fragmentation: A History of Contemporary Economic Thought, Cambridge University Press, 2019.
Robert Skidelsky, What’s Wrong with Economics?: A Primer for the Perplexed, Yale University Press, 2020.

Leave a comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.