automaticearth | I’ve said this before, but just in case: I have very little appreciation and/or patience for the field of economics and its practitioners. Labeling it "the dismal science" does it far too much honor in my view, since it's not a science at all. No more than psychology is, or anthropology, or beer brewing. Nothing that can't stand the falsifiability test Karl Popper left us is a science. Falsifiability is the dividing line between the real thing and a whole wide range of mere pretenders.
That said, if there's one economist today (OK, maybe a few more) who I would be tempted to make an exception for, simply because he's made it his goal to at least approach economics from a solid Popper-like viewpoint, it's Steve Keen and his rigorous math. It's therefore no coincidence that Steve is both a good friend of The Automatic Earth, and controversial.
Since about WWII at the latest, a certain group of economists, think Chicago, have tried their stinking best to best recognized as scientists, an attitude that culminated in the launch of the faux Nobel Prize in 1968. They produce serious looking formulas and graphs up the wazoo, which the media reproduce alongside interviews replete with lofty terminology, and the general public has fallen for the trick: ridiculous though it may be, the field has acquired a scientific aura.
Why did and do they want this? Because trillions of dollars worth of policies based on their ideas gain critical respectability if they can make themselves look credible and in control. So it's no surprise that the entire effort has been carried by the support of virtually unlimited amounts of money from the finance industry, as well as 99% of the ruling political classes.
That's how Milton Friedman and his Chicago School became so prominent. Nothing to do with science, let alone falsifiability. Just money. Credibility for sale. If you're a politician, and you manage to get make people, your voters, believe that there's a scientific underpinning to whatever it is you want to do economically, you got it made. And there are plenty of rich people and institutions willing to finance that fake science, since it serves their purposes.
This is to a large extent why we are where we are: stuck in a long, long crisis. If you take a simple belief system, phrase its beliefs in difficult looking formulas and graphs, and thus dress it in the veneer of some kind of a scienctific method, you can push societies to the brink of financial disaster, and it makes no difference whether you're wrong 9 times out of 10. You just tell them that it's all very hard to understand, and you set up an education system that teaches only the models you want it to teach. This way you create the idea that things are knowable while they are not, and all students have to do is get a degree and be the next high-priests. Any religion that poses as a science is dangerous, and economics more so than all others, because it can turn entire societies into poorhouses.