With so many blogs already in existence, why yet another?
The global financial crisis is also a crisis in economic education. University graduates who populate the ranks of business and government have made decisions and implemented policies which are destroying our economies.
The fallacies contained in economic textbooks have been taught as scientific facts which have guided decisions and policies everywhere. The consequence is a global economic system which is collapsing.
The reforms and economic initiatives will hasten the collapse because they are mostly bolder and more exaggerated actions based on the same fallacies which caused the crisis in the first place. There have been no new economic ideas which are likely to change the course of policy. The economic paradigm will perpetuate the endogenous crisis.
Unless the main fallacies are identified, recent student demands for better economic education cannot be met, because the same fallacies will continue to mislead them.
Initiatives for “new economic thinking”, such as those of the World Economic Association and the Institute for New Economic Thinking, are possibly harmful, because they increase the confusion, with old ideas dressed up as new because of the way resources are allocated. There is already plenty of alternative economic thinking competing for attention.
What we need is definitive refutation of major fallacies in all existing economic thinking, so that many false economic theories can be permanently eliminated to avoid confusion and waste of resources. Fallacies in orthodox economics are now better known. But many of my attempts to indicate existing heterodox fallacies (e.g. through comments on the Real-world Economics Review Blog) are usually met with censorship. Natural sciences have made progress because they have been able to refute theories based on the facts of observation.
Economics is not a science because it has not definitively refuted many theories by comparison with the facts of observations. Economic research consists of separate journals published by different schools to confirm their own biases and to protect their own fallacies. Economic pluralism is a pluralism of dogmas and fallacies.
The school with the most funding writes the textbooks and publishes the highest ranked academic journals, and thus defines the economic paradigm which directs global economic thinking. The economic paradigm is, by definition, the economic orthodoxy which provides the framework for discussing economic policy in government and in the mainstream media.
Unfortunately, the economic paradigm is based on economic theories, which like all others, are unscientific and full of fallacies. Exposing these fallacies through the formal channels of academic publication is a slow and inefficient process. At the same time, other channels such as the financial media are limited by commercial interests, e.g. how the research makes money for vested interests in the short-term.
Hence this blog is published to promote long-term thinking about building a scientific foundation for economics. In this process we have to expose major fallacies which plague economic thinking and to refute existing economic theories in order to create something which is scientifically solid. The world needs this scientific revolution for economics.