Sunday, June 01, 2014

Piketty Boo we don't see you: How the new new marxist analytics make real humans disappear

Gary Becker, a Nobel prize winning economist from Chicago was lauded for humanizing economics by bringing it down to the level of human interactions. Something that guys like Steve Levitt and Richard Thaler of the behavioral economics school have extended. And this was a critical innovation because earlier economic traditions such as neo classical, marxist or keynesian tended to treat people in the abstract mass. People were lumped into demand or supply or proletarians or capitalists. Reading those economists it almost seems that humans making real decisions didn't exist at all. That the 'game' of economics was mostly either mathematical abstraction or mass politics.

That's one reason that Thomas Piketty's new Magnum Opus updating Marx's J'Accuse is so disappointing:  he drags us back into the world of 'masses' and ideology and away from focus on the welfare of individual human beings that this economics stuff is supposedly all about.  In particular he pretends that inequality is simply a flaw of the system and that it can be 'rectified' without causing real damage to real people. In his focus on inequality in the abstract and even more so in his advocacy of changes that are impossible without great damage being done, Professor Piketty is the true heir of Karl Marx.  And like Marx's followers, policy makers who follow his prescriptions are likely to hurt a great number of real people.

Don Boudreaux makes these points and many more here.

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