a review published January 1996
I like it when an author makes it easy for his readers. The opening page of Paul Ormerod's The Death of Economics (St. Martin's Press, 1994, vii + 230 pp., $23.95) nicely introduces his thesis and, better yet, handily undermines his own argument, thus making the job of the critic much simpler.
Thesis: Though the world faces grave economic dislocations, etc., etc., the orthodoxy of economics, trapped in an idealised, mechanistic view of the world, is powerless to assist.
First bit of evidence for thesis: Teams of economists descend on the former Soviet Union, proclaiming not just the virtues but the absolute necessity of moving to a free-market system as rapidly as possible. . . . But despite governments in the former Soviet bloc doing everything they are told, their economic situation worsens
(emphasis added, as if any were needed).
Despite Ormerod's statist views and sometimes astounding political naiveté, many of his arguments are valid. The formalism, model-building, and number-crunching ways of mainstream economists are often little more than exercises in illusion. But though he devotes one chapter to critiques of economics within the profession, he does not discuss the most thoroughgoing criticisms, or acknowledge the skeptical tradition that has developed within the Austrian school. (He mentions but one Austrian, Böhm-Bawerk, and then only to portray him as part of the neoclassical mainstream.) Worse yet, he never once cites the work being done in Public Choice, an important offshoot of the neoclassical mainstream that has applied economic methods to such non-economic
subjects as governments and families. This allows him to restrict his focus to the ho-hum traditional policy issues of labor and industry, boom and bust, inflation and employment.
And this limited scope allows him to pretend that, when he finally gets to his solution to the paradigm crisis — non-linear systems theory — he has offered something fairly novel.
He has not.
Liberty, Vol. 9, No. 3
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