Economics suspended in a jelly of verbiage

Economists insisted that heroic stakes were framed around Market Competition versus State Planning, with Competition winner of the palm. Who needs Illiquid Government when you have Liquid Markets?

Odd then when economists pointed out that their storied perfect competition (all price takers and constant returns to scale) would have undermined entrepreneurial capitalism.

Odd that always-late capitalism would not have been possible without imperfect competition (some price makers and increasing returns to scale) and without an important role for—what!—government policies fostering technological change. Odd too that liberalized capital markets turned out to mean the rougher seas of financial instability.

Odder was that criticism economists leveled against price-setting by planners who couldn’t possibly process all that complexity when everyone knows that price discovery through markets does so much better. Only later did they admit that basic market mechanisms like auctions can’t work because of the sheer complexity of the financial instruments to be auctioned. Which meant the planners had to get involved anyway.

Not odd then that Samuel Beckett’s “failing better” and Theodor Adorno’s “living less wrongly” have the better record.

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