"Then the economists, many on the left but some on the right, in quick succession 1880 to the present - at the same time that trade-tested betterment was driving real wages up and up and up - commenced worrying about, to name a few of the grounds for pessimisms they discerned concerning ”capitalism”: greed, alienation, racial impurity, workers’ lack of bargaining strength, women working, workers’ bad taste in consumption, immigration of lesser breeds, monopoly, unemployment, business cycles, increasing returns, externalities, under-consumption, monopolistic competition, separation of ownership from control, lack of planning, post-War stagnation, investment spillovers, unbalanced growth, dual labor markets, capital insufficiency, peasant irrationality, capital-market imperfections, public choice, missing markets, informational asymmetry, third-world exploitation, advertising, regulatory capture, free riding, low-level traps, middle-level traps, path dependency, lack of competitiveness, consumerism, consumption externalities, irrationality, hyperbolic discounting, too big to fail, environmental degradation, underpaying of care, overpayment of CEOs, slower growth, and more.
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One can line up the later items in the list, and some of the earlier ones revived à la Piketty or Krugman, with particular Nobel Memorial Prizes in Economic Science. I will not name here the men (all men, in sharp contrast to the method of Elinor Ostrom, Nobel 2009), but can reveal their formula: first, discover or rediscover a necessary condition for perfect competition or a perfect world (in Piketty’s case, for example, a more perfect equality of income). Then assert without evidence (here Piketty does a great deal better than the usual practice) but with suitable mathematical ornamentation (thus Jean Tirole, Nobel 2014) that the condition might be imperfectly realized or the world might not develop in a perfect way. Then conclude with a flourish (here however Piketty falls in with the usual low scientific standard) that “capitalism” is doomed unless experts intervene with a sweet use of the monopoly of violence in government to implement anti-trust against malefactors of great wealth or subsidies to diminishing-returns industries or foreign aid to perfectly honest governments or money for obviously infant industries or the nudging of sadly childlike consumers or, Piketty says, a tax on inequality-causing capital worldwide.
A feature of this odd history of fault-finding and the proposed statist corrections, is that seldom does the economic thinker feel it necessary to offer evidence that his (mostly “his”) proposed state intervention will work as it is supposed to, and almost never does he feel it necessary to offer evidence that the imperfectly attained necessary condition for perfection before intervention is large enough to have reduced much the performance of the economy in aggregate.
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The economists didn’t say how to attain the knowledge to do it, or how much their non-quantitative advice would actually help an imperfect government to get closer to the perfect society."
Trecho retirado de "Measured, Unmeasured, Mismeasured, and Unjustified Pessimism: A Review Essay of Thomas Piketty’s Capital in the Twentieth Century" de Deirdre Nansen McCloskey.
