6 of 7 people found the following review helpful
I am not an economist, but some of my best friends are,
This review is from: Naming the System: Inequality and Work in the Global Economy (Paperback)
I am not an economist, but some of my best friends are. And much of my work as a labor law professor, has involved dealing with ideas couched in economic terms. Even so, there is a lot about economics as it is really practiced, that comes as a surprise.
Several years, when the news was full of predictions from leading economists about the effects of a new policy on the economy, I asked a group of economists whether these sorts of predictions were based on studies of effects in the world. The economists told me that these predictions none of these predictions were ever tested. All that was ever done was to create simplified theories about how the economy worked and then use those theories to make predictions. No one ever checked to make certain those theories were valid.
Imagine what healthcare would be like if doctors and scientists operated this way. Actually, we don't have to imagine. This is how life was in the Middle Ages when doctors tried to balance the body's four humors, and everyone knew the sun revolved around the earth. The models got more and more complex as reality did not jibe with theory.
So all of us have our fates determined by economists whose methods are no more up to date than the 16th century. Consider Alan Greenspan, the hero of the Fed. He and his colleagues for years were convinced that the only way to fight inflation - and inflation had to be fought at all costs - was to raise interest rates any time unemployment fell below 5.8%. The effect was that higher interest rates increased unemployment. In the early 1990's, unemployment began to fall below this danger level, but no inflation appeared. Pressure was put on the Fed not to raise interest rates, enough pressure that they held off. Unemployment plunged ever lower with no inflation. Did the economists admit that their theory had to be discarded based on the evidence/ Of course not. They responded that they needed to refine the theory to account for this aberration from the theory, but the theory was still solid.
Michael Yates does a much better job at leading the reader through classic economic theory and exploring the many ways in which those theories stand unproven - and yet they still rule the world. Yates provides a fair and balanced look at the claims of classic economics for economies and for global trade and demonstrates that there is no evidence to support those claims.
There is no question that Michael Yates is passionate and has strong opinions. He does nothing to hide his views and is fair and open with the reader as he presents his arguments against classical economics and his ideas as to what should replace those disproven theories. I won't even try to summarize the. Yates deserves to be read and his arguments digested in full.
Yates is a wonderful writer and educator. He should be. He had a long teaching career at University of Pittsburgh at Johnstown, among prisoners, and with unionists. He is clear without ever talking down to his audiences. Over the years he has opened up the world of economics to many of us, and through this book will reach even more. I recommend it strongly.
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