[roenxi]

Yes and no. There are large amount of economics where the describing what is going on doesn't change the outcome.

Eg, a free market puts tremendous downwards pressure on profit margins. Identifying that means the powers that be fight against free markets with hook and crook - but it doesn't change the fact that if there is a free market it will find an equilibrium where people are indifferent to starting a new business.

[smegger001]

SO what you are saying is we should distinguish between a descriptive, and predictive science.

[earthboundkid]

The last forty years has been shaped by neoliberalism, which is exactly based on the idea of free markets as self-correcting. You’re so blinded by it that you’re just assuming that the theory is correct, so therefore the theory can’t have an effect!

A) empirically, that was wrong and disastrously so (not as bad as communism but very bad) B) assuming reflexivity can’t exist is silly even within the neoliberal framework. It’s like assuming that the dollar bill you see on the sidewalk must be fake because it’s there.

[roenxi]

If you want a citation; that little theory is vaguely from Karl Marx. Chapter 13 of Capital, Volume III according to Wikipedia [0]. Pretty good theory, and somewhat older than 40 years.

Notwithstanding that, what you say may be true.

[0] https://en.wikipedia.org/wiki/Tendency_of_the_rate_of_profit...

[pdonis]

> The last forty years has been shaped by neoliberalism, which is exactly based on the idea of free markets as self-correcting.

This is not only wrong, it's laughable. Governmental interference in the economy has grown over the last forty years, not shrunk. And not with good outcomes, either: the crash of 2008-2009 was due to too much government meddling over a period of decades finally catching up with everyone.

[progre]

> the crash of 2008-2009 was due to too much government meddling

I thought it was because of irresponsible speculation in dubious securities backed by by corrupt rating houses?

[pdonis]

Irresponsible speculation in dubious securities by investment banks who knew the government would bail them out (or bail out the insurance companies underwriting their risk, which comes to the same thing) because they were "too big to fail".

And the dubious securities themselves were derivatives based on the housing market, which was in a huge bubble caused by government policies that basically forced banks to lend to people who couldn't afford the loans in order to encourage home ownership, as antepodius pointed out.

[antepodius]

The US government had a policy of increasing home ownership through affordable housing.