Many economists are questioning their 101s lately. Look closely in the various journals and you'll see evidence of that, both explicitly and implicitly.
Many economists are questioning their 101s lately. Look closely in the various journals and you'll see evidence of that, both explicitly and implicitly.
The is broadly true of Macro Economics. This might even be impossible as a science, since the object of study (world economy and markets) is aware of its findings, and adapts around them.
Micro Economics, or "Price Theory" as it maybe should be called, is OTOH a very powerful science that gives deep and counter intuitive insights into how the world works.
It is also largely ignore by decision makers :)
Seriously, though, your econ mind is on the same track as mine. "Economics" is a pretty broad brush, and it's difficult engaging in meaningful discussion.
You make a great point: The "economic system" is conscious and reacts/adapts to internal and external changes, which changes the rules, and the meta rules, and the meta meta meta....
My impression is that "behavioral" economics is a promising field that can help explain some unusual phenomena. But it doesn't change the solid core of the science.
I think it gets talked about like that sometimes by people who don't like the implications of the established science. Much like what happens with Climate Change and Evolution when any seemingly contradictory study appears.
If we're talking about supply and demand, price elasticity, and things like that, I can't think of any loopholes. Knowing how these things work only makes people make more informed decisions.
That is pure capitalism at play as it is a free market without government regulations.
Similarly some drugs that are priced at crazy multiples of real cost to produce it(including RnD and healthy profit) by the likes of martin shkreli.
So its basically how much the individuals in an economy values money. When the seller quotes high and I as a buyer has truck load of money, I wouldn't even bother to bargain. When I don't have cash, I try to bargain it to the bottom levels and sellers would probably not even be able to cover their cost.
Pricing that varies over the day in ecommerce websites is another example. Time during which people are more likely to rush into buying, things are priced high.
Your example of the fish markets is just a good example of the fact that people have varying marginal utilities of money. Of course people try to get the highest price they can get - taking into account, of course, the time they'll be receiving the money. Obviously people will see if they can raise the price, but they're still in competition with other sellers; the price cannot be raised indefinitely. And it's not always clear whether other factors have changed - things like fish supply and catching are notoriously dependent on the weather, demand for fish varies seasonally and with changing fashions; it's a perishable good with not-super-fungible markets - maybe the prices know something about fish that you don't.
You give the example of super-high pricing for drugs such as the Daraprim case with Martin Shkreli. Note that this market is overseen and hugely, hugely regulated by the FDA, which imposes very lengthy and costly approval processes on drugs (even different manufacturers of off-patent "generics".) More generally, these drugs are on-patent - both of these situations are a de-facto monopoly that grants exactly the kind of economic rents that microeconomics predicts.
Ecommerce pricing also doesn't disprove anything. You could, for example, explain this by other factors, such as that ecommerce warehouses and logistics chains are capacity-limited, so "surge pricing" would make good sense to smooth demand peaks. But that's besides the point, really, because microeconomics would absolutely predict that if people, on average, have a preference for shopping at a particular time, then a seller may attempt to capture this preference in the price. This isn't done in brick-and-mortar retail, since changing the prices hourly would be a huge hassle. But in ecommerce, it's easy, so prices modulate with demand. And stores have always changed their prices over time, it's just that the internet makes it easy to go for a smaller granularity.
I've studied economics at the college level. I follow economics news and am not aware of economists questioning 101 level principles. Many of these are relatively simple and intuitively obvious ones (once you wrap your head around them), much like 101 level maths.
Consequently I am inclined to disbelieve the claim that economists are questioning econ 101 principles, unless you can provide some examples. More than one example would be most convincing since you're claiming this is a general trend. Journal article links would be appreciated.
It is not so much about questioning economics 101 principles as much as questioning their validity in the various economies. Taking the example of comparative advantage and more general trade theory, there are well known, respected economists (e.g. D. Rodrik) who have argued against the scope of their validity.
There also seems to be a debate about how 101 is taught in schools, see e.g. [1].
[1] https://www.washingtonpost.com/posteverything/wp/2016/05/13/...
I want to push back on the idea that economics is a way to divinate the truth of how to generate and share happiness. It's a piece of the puzzle, but a very small one.
Marx contributed massively to sociology. He contributed nothing of note to economics that's really relevant to this day (not that his effort was not commendable). Sticking to orthodox marxist economics in 2016 is more dogma than science.
Markets aren't forces of nature. That's propaganda.
The side effects must be investigated because that's largely where we are in the public discourse right now. We're in a big adjustment period. We're learning about consequences; good and bad.
Reminds me of Keyne's famous long-run quote.
They did? How so?
[1] Which they, in actual fact, very seldom do.