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241

We won’t fix inflation while economists stay in denial about its causes (www.smh.com.au)

submitted 1 year ago by Zagorath@aussie.zone to c/australia@aussie.zone

34 comments fedilink hide all child comments

Non-paywall link.

TL;DR: economists are still stuck in the idea of the market as a perfect force for reaching optimal outcomes. They're ignoring the simple fact that businesses are putting prices up purely to increase profits. And that they can do this because the economic ideal of perfect competition (where many small firms compete with near-identical products) does not exist. We have a small number of very powerful businesses—oligopolies—in nearly every market for consumer-facing goods.

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[–] Pons_Aelius@kbin.social 6 points 1 year ago* (last edited 1 year ago) (2 children)

Pure Economic is a science _

A statement is not a fact. Prove your statement.

Pure Economics is an amalgam of Psychology and Mathematics.

This implies Psychology thinks people are rational, it does no such thing.

Economic Rationalism is a oxymoron because Economic relies on irrational psychology

You are almost there:

Economics is a science is a oxymoron because Economics relies on irrational people being rational.

[–] vividspecter@lemm.ee 4 points 1 year ago* (last edited 1 year ago) (1 children)

Economics is a science is a oxymoron because Economics relies on irrational people being rational.

That last statement is one view of one theory (that happens to be the predominant one), it's not like this is a fundamental tenet of economics.

But you might like behavioural economics and doughnut economics as alternative views that don't hold the individual as rational actors.

[–] angrystego@kbin.social 1 points 1 year ago

Exactly. There is science-based economics and there's also pseudoscience economics. They exist next to each other. It's a similar situation as in medicine.

[–] Mrrt@sh.itjust.works 1 points 1 year ago

Physics will approximate a cow as a sphere, which you can observe it is not.

In science theory you have to make assumptions and approximations to simplify and get at the underlying mehanics. THEN you can complicate everything with the reality of it all.