Neoclassical Economics as a Pseudo-science

Professor Terry Barker (University of Cambridge)

4-6pm, Room 916, Adam Smith Building

Abstract

Neoclassical economics with its limiting features (e.g. equilibrium, optimal social welfare and marginal utility) has failed to predict or explain the world financial crisis. It is now thoroughly discredited as a guide to policy making but continues, zombie-like, to exist as an academic discipline. Over the last 50 years, it has been shown to be:

  1. internally inconsistent (e.g. aggregation is impossible)
  2. morally repugnant (it is not value-free to assume that people are identical)
  3. unrealistic in its assumption of rationality (behavioural economics has proved that people are not rational) and
  4. incapable of falsification (e.g. the collapse of the banks in 2008 is treated as a shock, external to the economy in equilibrium). 

This lecture adds to the list by showing, via the work of 3 neoclassical economists (Cournot, Samuelson and Tol), that it is a cult or religion, which looks scientific, but is in fact pseudo-science, using mathematics and statistics to obscure worthless economics.

Biographical Details

Terry Barker is Founder of the Cambridge Trust for New Thinking in Economics, Chairman of Cambridge Econometrics and Senior Department Fellow, 4CMR, Department of Land Economy, University of Cambridge. He is an economist with over 140 papers and books published mainly on economic modelling, energy economics, climate change mitigation policies and international trade. He was a Co-ordinating Lead Author for the IPCC’s Third and Fourth Assessment Reports 2001 and 2007, taking responsibility for chapters on cross-sectoral greenhouse gas mitigation. His research interests are in the theory of money, “New Economics” and in developing and using large-scale models designed to address the issue of global decarbonisation at the UK, European and global scales. See CV: www.landecon.cam.ac.uk/staff/profiles/tbarker.html

All welcome.

The Sociology Seminar Series is supported by the MacFie Bequest, named after Professor Alec MacFie, Adam Smith Professor of Political Economy at the University from 1945 to 1958. 

Any enquiries about the seminar series can be addressed to: Andrew.Smith.2@glasgow.ac.uk

First published: 13 September 2012

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