[mpyne]

> Externalities don't invalidate the entire theory, they just mean that adjustments have to be made in the cases where there are externalities.

Are your adjustments the epicycles upon epicycles hammered onto ancient astronomy's theory of mechanics to make the orbits of the planets appear to work? Or are they like the relatively slight adjustments to Newton brought about by Einstein?

I personally feel that any discussion of sociological issues cannot be reduced simply to linear optimization problems, which implies the former view for me.

[swatow]

I think the best analogy is that general equilibrium theory is a zeroth order approximation to reality, and optimal (Pigovian) tax theory is the first order approximation. You might think a priori that no simple model can tell us much about sociological issues. All I can say is that I was very skeptical before I studied economics, but the theory is actually very compelling. I would recommend looking more into it (e.g. textbooks on micro or macro).

There is this strange disconnect where educated people who don't know much economics believe that economists have become tools of the ruling class, and therefore don't need much consideration. And economists are so stuck in their bubble that they don't believe that any educated person would completely reject economics (e.g. I specifically asked them if they thought that reasonable people could disagree with my original post, and they said no).