Economics far from Reality

What is taught at VUW under the title "economics"? Do we really gain useful knowledge about the real world? Or are we chasing illusory can openers?

It is my contention that orthodox economics is not only unrealistic, but this "unreal-ism" serves a very important ideological function. Firstly, then, the lack of reality.

In times of dire economic problems one would expect economists to be loudly peddling their wares. Many of the VUW staff, in one way or another, are advising Government on economic measures.

Yet there is considerable disquiet amongst economists that there is no way of dealing with major problems. For example, the normal way of dealing with inflation is to increase unemployment. The normal way of dealing with unemployment is to increase inflation. If you have inflation and unemployment together (as we have at the moment) you're stuffed. Snookered.

More generally, there is a feeling that the basis of modern economics - the assumptions of "perfect competition" is inappropriate. Leading American economists have urged this - they even spent their annual conference in 1971 on such issues. The results are not very impressive for economics as taught at Victoria.