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An interview with Naked Capitalism’s Phil Pilkington on our book ‘Modern Political Economics’ – Part A | Yanis Varoufakis
The essence of the economists’ inherent error is that they erred into thinking it is possible to tell a credible story about how values and prices are formed in complex (multi-sector) economies that grow through time. For decades economistsstruggled to produce such a narrative. But all their best laid plans for piecing it together crashed on the shoals of indeterminacy. Put simply, their mathematical models could not be solved. At that point economists did one of two things: Either they accepted that it could not be done, or they introduced hidden (and sometimes not to hidden) assumptions that ‘closed’ their model at the expense of credulity (e.g. an assumption that the economy comprises a lone Robinson Crusoe-like figure, or a single commodity, or that all exchanges occurred in a timeless universe and at a flash of a fleeting moment). The former scholars were forgotten by history, as their papers never saw the light of day. The latter built up careers, sometimes radiant ones. Alas, their economics were riddled with only thinly disguised ‘tricks’ the purpose of which was to disguise economics’ ‘inherent error’.
economics  theory 
february 2015 by juliusbeezer
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