"Economics vs Fakeonomics" - can you tell the difference? [View All]

[kristopher]

Economics vs. Fakeonomics

We skeptics of free trade are used to being told, "You don't understand economics." In fact, one major reason I wrote the book Free Trade Doesn't Work was simply to expose, once and for all, that there do exist extremely serious and intellectually reputable arguments, within the confines of accepted mainstream economics, which question free trade. And indeed they exist.

But I've noticed something. We skeptics are often not really struggling against real economics at all. When I pick up a copy of the Wall Street Journal, or Forbes, or the New York Times, or turn on Fox TV or MSNBC, or read papers issued by the libertarian Cato Institute or the Peterson Institute for International Economics, I don't even find economic arguments. I find a mischievous substitute for economics we can call "fakeonomics."

What is fakeonomics? It sounds like economics to the uninitiated. It uses the same language, addresses the same issues and fills the same logical hole in the national policy discourse. Most people can't tell the difference. But fakeonomics is not the real thing.

How is fakeonomics fake? It tells a story that goes something like this...

• Free markets are always right, always and everywhere.

• Anyone who doesn't believe this is stupid. Smart people not only understand that free markets are best, they like free markets, because free markets mean opportunities to get rich.

• Or maybe they're corrupt. The opposite of free markets is government. Government is always incompetent. It never does anything right. Ever.

• Or maybe they're evil. Anyone who doesn't believe in perfectly free markets is a Marxist wannabe or a loser jealous of more-successful people.

• Free trade is just free markets applied internationally.

• Therefore all smart, good, successful people must believe in free trade.

Unfortunately, fakeonomics is at best a crude parody of economics. It is often larded ...

Hope everyone reads complete article at HuffPost: http://www.huffingtonpost.com/ian-fletcher/economics-vs-fakeonomics_b_720327.html