Saturday, January 7, 2012

Is the Economics Profession Merely a Scam?

     In the textbook ( picked up very cheap, I assure you ) by Hirshleifer (UCLA) and Sproul 1988 appears this sentence. It is the third sentence of the "Preface" (to "Price Theory and Applications...."): "There is an economic problem whenever the constraint of resource scarcity impinges upon life." (For the record, the next few words are included: "Human decisions that are subject to the law of scarcity, and therefore amenable to economic analysis, include..." bla bla bla)
     So deceptive. It sounds so right. Right? It is not.
     Is a millionaire's second million "scarce"? It is such a glib sentence. One has to suspect that the persons writing these sentences just enjoy writing these sentences. As for the idea of "resource scarcity" -- or of "scarcity" -- as defining what some domain of study that exists somewhere and that might be called economics would be about: this is fine. I do not have any objection to that. I wonder where such a domain of study exists? The author speaks of situations where "resource scarcity" impinges upon life. Maybe there are such situations. I do not see why there should not be. But those situations are not the situation of economics, the situation that economics talks about. So what the hell is going on? Why would a textbook make such a  statement?
     If we look to what is being discussed, in the field of economics as a study area, or what is actually discussed under this rubric or term "economics," in universities for example, we find a lack of correspondence. There is a lack of correspondence to what the example sentence is asserting. We would, assuming we have normal mental capacity, find upon examination that topics discussed under that heading ("economics") in fact do not correspond to what Hirshleifer is talking about (which is in fact similar to other books of type). So it's a scam. There is no other possible conclusion since, of topics covered in the actual published discussions of economics or in economics as we know it -- i.e. in the actual field or subject domain -- many topics do not correspond, or only barely do, to the cluster of concepts and definitions that are centered around use of the word "scarcity." It's simply a big scam. The textbooks continue to say that economics is about "scarcity of resources," etc., like a broken record. So, now, you probably want to know if this is actually true. I know I did. So let's look at what I found, in trying to support what I thought I was seeing.
     We have already mentioned the millionaire's second million. We will have little trouble finding others.
     How about where a consumer buys something he or she does not need? If I make 400.00 per week, for example, I might buy something I do not need --- e.g. a nice restaurant meal --- it may be difficult to make but it is not in any sense scarce. It is there; I have enough money to buy it. Where is scarcity? So: is a restaurant meal "scarce"? How so? Or who so? How who? OK... Less get serious now on the "who?" thing.
     Who was it scarce for? For a person who does not have the money (or, alternatively, the desire) it could not count as a scarce good because he will do without. (But he might buy it? I'm not buying it, sorry.) For the person who does have the money if isn't scarce either. He who likes to buy what he only wants but does not need would buy for pleasure, pleasure alone. In that case as well it is also not scarce. That seems to me to be obvious. So what is the problem? (well get to that!)
     Maybe that restaurants aren't really part of the economy? No. (I tried that.) They are. Darn.

     So, it sounds to me like the idea of "scarce" simply does not apply to many issues which are nevertheless discussed as "economics" or we could say described as economics or conceived of as economics issues.

     It is a scam.

     Every single econ professor in the country is guilty of not calling their fellow economists on this. I repeat: the whole thing is a scam.

     Professors: How can you work in a profession that actively generates a scam, and not say so, and consider yourself legitimate? I would like someone to either refute what I am saying, and thereby show that I am wrong, or explain to me why the economists at Harvard or Yale cannot see this.
     I am not saying there is no reason for the situation. I am just saying that I do not know what it is. So, why don't you professors enlighten me? Or do I have to mail this essay out to all of you individually!!!??

     Pretty crazy idea, huh?

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