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Comment by asnrk | Hacker News Reader

I don't get why people name-drop Ricardo as the final authority on why free trade, in practice, is definitely in everyone's best interest. Ricardo's work was very narrow and didn't have much to say about the distribution of gains from free trade even under the conditions in which his work held.

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My best friend is an economics PhD. He often laments on the fact that the average college-educated person has enough Economics exposure to make glib, dismissive comments like "That's Economics 101" or reference early economic thinkers, when Economics is really a broad, constantly-evolving field that is much more complex and nuanced than the GER courses would lead you to believe.

But, that's partially because that's the way its taught.

It isn't particularly helpful that economics as a discipline seems to have the same predictive value as soothsayers and court jesters(). Mostly economic theory in the western world is used as a cudgel to justify particular policies that benefit a few at the expense of many.

() eg: all the following were justified by "economists": trickle down economics were promised to increase middle class (nope), prediction of inflation caused by quantitative easement (hasn't happened yet), devaluation of dollar due to trade deficit (hasn't happened yet), gains in tax revenues by unlocking growth through tax cuts (nope), etc ...

> It isn't particularly helpful that economics as a discipline seems to have the same predictive value as soothsayers and court jesters

That's a wonderful quote. Thank you for that.

Everything with an -ism suffix is ideological.

Botulism?

Etymooicaly, yes, actually:

https://www.etymonline.com/word/botulism

You're right, and, as a self-hating economist, I think he would agree with most of what you said.

Here are his thoughts on supply-side "trickle-down" economics:

"It's basically what happens when a college sophomore attends the first 8 weeks of an intro macro course and is like, 'ok, I've heard enough. I'm going to go write policy now'."

It makes sense in the context of basic economic theory devoid of complication introduced later, but no legitimate economists still believe in supply-side economics and very few did to begin with. The powers that be reached for, and continue to reach for, economic theory that supports their agenda; they don't look for consensus in the academic community.

> It isn't particularly helpful that economics as a discipline seems to have the same predictive value as soothsayers and court jesters().

Much as I like to point out that microeconomics has a way better record than macroeconomics, it’s akso easier because we have much, much more data.

You’re still wrong about macroeconomics though.

If you increase the money supply you’ll get inflation. If you increase it a lot you’ll get hyperinflation. If you surprise people with unexpectedly higher inflation you’ll get a boom. As people realise inflation is higher than expected you’ll get a recession.

If you raise taxes unexpectedly people will spend less, not just because they have less money, but because they realise they’ll have less money than they expected over the course of their whole lives, they’re poorer.

Saying macroeconomists don’t know anything because politicians do what they want and find a convenient economist to justify it later is like saying no one knows anything in computer science because JavaScript frameworks change every two years.

The trick is in predicting the timing of these events after the exposure with some accuracy.

I do not intend to defend macroeconomics predictive powers, as I agree it is bad.

But skyrocketing healthcare, education, and housing costs could easily be due to inflation. They are all inelastic goods that the CPI ignores. They are purchased with seemingly infinite loan availability.

When a loan is granted that money is conjured out of thin air, inflating the money supply.

The problem with economics is that you can't tell which parts you can take seriously and which parts you can't. Both sides of the argument tend to offer a lot of criticism to the other side and it's not obvious which side is politically motivated or stands to gain from a specific policy and which side is doing it because it would be a net positive to society. There are many people who think socialism will be better than our current economic system and many of these people even have political power.

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