"...The conclusions of economic theory as presented by many or perhaps most economists do not follow from current economic theory, but rather from the 50 year old efforts at mathematical economic theory...Read the whole thing. (Hat tip to Ezra Klein)
The problem is, I think, that when they talk to non economists, many economists pretend that traditional economic theory is a good approximation to reality. By 'traditional' I mean 50 year old. The fact that the conclusions are the result of strong assumptions made for tractability and are known to not hold without these assumptions is irrelevant...
...Once a model has been put in textbooks, it becomes immortal invulnerable not only to the data (which can prove it is not a true statement about the world but no one ever thought it was) but also to further theoretical analysis...
...I think the worse problem is that economists who are also libertarian ideologues are lying about the current state of economic theory, not only its very weak scientific standing, but the fact that, even if it were all absolutely true, their policy recommendations do not at all follow from current economic theory..." -- Robert Waldmann
Update: Having now read Mark Buchanan's New York Times editorial, I'm not at all sure I agree with Robert Waldmann in aspects of his post not quoted above. Buchanan is arguing for an agent-based modelling, out-of-equilibrium, econophysics approach. Buchanan maybe overstates the contrast between his approach and most mainstream economics, but Waldmann's post contains an element of boundary-patrolling anyways.
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