Phil's Occasional Blog

"Economists are Guilty"

"Academics - and their mad theories - are to blame for the financial crisis. They too deserve to be hauled into the dock", wrote Anatole Kaletsky in yesterday's Times. Thank's to Steve Keen's Debtwatch for drawing our attention.

It's worth a read, but neither Keen nor Kaletsky get the real picture.

The failing of "Classical Economics" is that it completely ignores the laws of physics and ecology.

It is a house built on the sands of political ideology.

The way out of this mess has to be based on an understanding of fundamental physical and biological principles.

As Garrett Hardin says, we need to abandon our fossil-fueled drunken brawl.

Recommended reading:

Wikipedia's write-up on Thermoeconomics.

Nicholas Georgescu-Roegen's ground-breaking "The Entropy Law and the Economic Process" (1971). Heavy-going but important.

Georgescu-Roegen's 1975 essay "Energy and Economic Myths". A fabulous demolition of both the cornucopians and steady-state economy advocates. He has a way with words which puts most native writers of the English language to shame.

And of course, the Club of Rome's "The Limits to Growth". Classic. Best read in original edition, and best read in 1972, lest we waste 37+ years pursuing the impossible. Oh, hang on....