Jonathan Aldred

Some seventy years after a bunch of right-wing economists staged a coup d'état in Chicago (...or rather during a holiday on Lac Léman), it turns out that humans still haven't learnt to behave like the "rational" homo economicus of economic theory, letting self-interest guide all our actions. We still persist in doing anomalous things like collaborating with each other, letting our actions be guided by irrelevant and unproductive factors like class loyalty, friendship, altruism and inertia. We even continue voting in elections, when the merest first-year economics student could prove to us that the chance of our individual vote making a difference is vanishingly small. The situation is so fraught that there's now a whole branch of economics devoted to the study of (surreptitious) ways of making us change our behaviour.

There also seems to be something fundamentally wrong with what Aldred calls the "physics-envy" side of economics, the assumption that the economy is a closed, independent system susceptible to precise scientific measurements, that behaves according to a set of invariant mathematical laws. Given that economists frequently dish out advice to entities within the system (and get paid for doing so), it's not an assumption that anyone outside the field could take seriously, if they ever stopped to think about it, yet important real-world decisions are constantly being taken on the basis of the supposedly precise predictions of the theory. Even physicists know that the act of measuring a system always influences it in some way...

And there's more, much more, until we start thinking that Alfred Nobel might have done more harm to the world by legitimising the idea of economics as a serious discipline than he did by manufacturing explosives. It's almost as if he'd instituted a Nobel Prize for homoeopathy or UFO research... (Edit: it turns out that the Economics prize was not instituted by Nobel, but by a bank in his memory. So we can blame the bankers!)

A useful, thoughtful and entertaining critique, and probably something that economics undergraduates ought to read and take to heart before venturing out into the real world, but possibly a bit too one-sided for non-experts to read in isolation.… (mais)

Modern economic theory has made a substantial, if not always immediately obvious, contribution to the way things are in our world today. And this is not, according to Jonathan Aldred, a good thing. This eye-opening book by a Cambridge economist reviews the development of economic theory since the middle of the 20th century. He shows how it has come to support a policy agenda stressing market outcomes over ethical choices, and the primacy of individual choice -- for those few individuals who have real choices -- over the common good. As a market economist for 40 years, I observed these same trends, and bemoaned them. I don't agree with everything that Aldred says, but overall he makes a compelling case. Moreover, the book is readable, and not just for economists. A critical read. APM

I read this book and also gave it five stars. A great read JPH . he clearly does not like the Chicago School nor do I. ˙
He rips Posner. he shows how our current malaise is due To the Chicago bunch and their erroors,… (mais)