|Peter Boettke|

Robert Atkinson and Michael Lind have it exactly reverse. Econ 101 isn't what is killing us, it is the denial of the practical impliactions of the science of economics that is. One must always remember that simple economics -- basic principles derived from the logic of action in a world of scarcity -- is not simple-minded. Critics of economics have forever tried to paint Econ 101 into such a corner --- unrealistic and unhelpful for the real world.

How would we react if someone actually said something similar about physics?

Economics has the same ontological status as physics --- reality is not optional --- but the "laws" of economics are derived following different epistemological procedures. This is really nothing more, or less, than what Aristotle taught about methods of analysis being chosen based on appropriateness. Economics is about human action in the face of scarcity. Human purposes and plans permeate the analysis from start to finish. When economics gets derailed --- and folks it often does due to factors such as philosophical fads and fashions, or political expediency in public policy debates --- usually the culprit is one of 3 things: (1) a denial of agent rationality, (2) a denial of scarcity, and (3) a denial of how the price system works to help us cope with scracity by aiding us in the negotion of the trade-offs we all must face. This denial can come in sophisticated form --- e.g., Keynes --- or it can come in an unsophisticated form --- e.g., man on the street. But make no mistake about it, the denial has the same impact on the "laws" of economics as the denial of the "laws" of physics would by a man about to jump off the top of building would on the inevitable impact. All his denials will not mean much when he hits the pavement.

Atkinson and Lind make an interesting move in their effort to deny the teachings of economic science. First, they provide a list of 10 myths, and the first myth is an indictment of the entire discipline. Second, they move from some basic ideas to policy applications quickly. The problem with their tactic is that they don't really address the underlying logic of economics, and thus the qualifiers when one moves from the science of economics to the "art" of political economy. In learning economics it is important for students to keep in mind endogenous and exogenous factors impacting the mental constructs we are working with, as well as the reason for the ceteris paribus clause. To go back to my physics talk --- if you drop a feather from the top of a building it may very well float up first before coming down to the ground, but nobody would believe that means that the "law of gravity" was being overturned. Same in economics; there are off-setting factors that in the basic logic are assumed to be held aside for the sake of analysis. However, when applying the "laws" of economics to public policy, these off-setting factors must be taken into account [Just as in applying physics, the engineer must take into account factors such as wind resistence etc.]. In economics, this is where Institutional Analysis comes into play. An appropriate institutional economics does not critique the science of economics, but provides the bridge between the science of economics and the art of political economy.

Obviously, Atkinson and Lind haven't thought through this along these lines, but instead rely on the old mainstay of critics which is to argue that economics is unrealistic and unhelpful.

Great teachers of economics, such as Henry Simons and Ludwig von Mises, believed that one of our primary tasks as economists was to dispel the public of popular fallalcies. How would you respond to this challenge by Atkinson and Lind?