Praise from Gonzalo Lira! But . . .

For a comment on his article "Why democracies will always go bankrupt" available here.

mickeyman said...

I think the problem is that economics, which seems that it should be an observational science, is in reality a formal system with axioms and rules of inference. All of the different schools of economics only differ in their particular choices of axioms. If the axioms are actually false statements, then the system generates absurdities, the result of which we can see all around us.

January 16, 2011 9:08 PM

Gonzalo Lira said...

Mickeyman,

You've written the smartest thing of all the comments—you've successfully diagnosed what's wrong with economics as a discipline: "A formal system of axioms and rules of inference. All of the different schools of economics only differ in their particular choices of axioms. If the axioms are actually false statements, then the system generates absurdities, the result of which we can see all around us."

Exactly.

GL

January 16, 2011 9:33 PM

Unfortunately I am going to have to criticize his choice of axiom for his particular formal system as well. The fundamental axiom in his theorem is that the citizens of a democracy are in control of the country. Unfortunately, it is clear that the citizens of any democracy (especially the US) are not in control of government policy. Poll after poll shows that the majority of Americans want to withdraw from Iraq and Afghanistan, yet politicians tell them that such a policy cannot even be debated as it would lead to Taliban victory (or whoever they think they're fighting over there).

So much for citizens of a democracy controlling government policy.