Economics

From RationalWiki

Economics is the study of markets and economies.

The modern science of economics is based on a few basic premises:

All actors in a given transaction behave in a purely rational way.
All actors have complete information about the situation.

Since these conditions are almost never true, economists tend to have rather poor predictive value in the 'real world'.

[edit] Pseudoeconomics

A large and diverse body of crank economic ideas exists, ranging from people who still adhere to quaint and archaic theories of the past (see below) to those ideas which still enjoy widespread popularity today, such as name it and claim it (aka God will make you rich), pyramid schemes, and esoteric conspiracy theories about the Federal Reserve.

Other notions such as the Laffer Curve are also considered pseudoeconomics by some.^[1]

The Townsend Plan is another example of economic woo from the past.

[edit] Archaic ideas that still get brought up occasionally

Laissez-faire -- almost no economists will still hold to this, if only because of the understanding that the government needs to deal with externalities. Moreover, a free market depends on perfect information, and people is ignunt.

Georgism -- This particular belief has been demolished in the economics literature, yet mutated forms constantly arise in the era of the Internet.

Marxism -- while his ideas on social class still enjoy some currency and relevance, his economic theories are clearly on the dustbin of history.

Distributism -- a failed attempt at forming a new economic ideology out of a 19th century Papal encyclical; comes out something similar to the more recent "back to the land" sentiments.

Supply side economics -- not completely archaic in some very limited circumstance, but in any state that already has less than 70% top marginal tax rates, the proponents should be shown the door pretty quickly.

Social Credit -- C.H. Douglas unveils the mysteries of consumer power using complicated mathematical formulas, like consumers exercising their power at the marketplace will direct the behavior of producers. Ya think?