On Economics and the Scientific Method

[peristaltor]

darksumomo turned me on to a short essay (PDF) that deals nicely – and far more succinctly – with everything noted in my dismal mythos tag. Behold:

The supposed omniscience and perfect efficacy of a free market stems from economic work in the 50s and 60s, which with hindsight looks more like propaganda against communism than a plausible scientific description. In reality, markets are not efficient, humans tend to be over-focused in the short-term and blind in the long-term, and errors get amplified through social pressure and herding, ultimately leading to collective irrationality, panic and crashes. Free markets are wild markets.

Well put, sir. Well put.