So Bad It's Good

Do anecdotes qualify?

The New Old Big Thing in Economics

During a 1934 dinner in the U.S., one economist carefully removed a towel from a stack to dry his hands. Mr. Keynes swept the whole pile of towels on the floor and crumpled them up, explaining that his way of using towels did more to stimulate employment among restaurant workers.

This isn't in print, but I went to a conference recently where a historian said something similar. After describing Lincoln's protectionist and interventionist policies at some length, the historian said, "In short, Lincoln was a prototypical laissez faire classical liberal." The historian wasn't being ironic. I exchange puzzled glances with the economists in the room.

I'm not an economist but actually, if you ignore the word "mulct" and replace it with the phrase "extract maximum profit", then the statement seems factually accurate. Every participant will try to extract maximum profit and will try and get around illogical legislation like minimum wages or price caps. Nothing wrong with that.
The problem, of course, is the pejorative connotation that the Durant's are obviously placing on this free market situation and the fact that they fail to appreciate that the individual participants greed actually can serve to make the economy better off as a whole.

Ujjwal,

The sentence reads "In the laissez-faire economy . . . or to evade the maximum allowable price or wage."

Not exactly a laissez-faire economy at that point.

"Economic policy is fungible".

That was what an old economist retorted to a group of economists (including myself) when we were arguing that because money was fungible, our organization should reconsider its aid to African governments.

I humbly submit the following candidates:

1) Buy American.

2) Support the minimum wage.

3) You can keep your health insurance.

4) The stimulus created jobs.

5) Only the two-state solution can work.

6) The recession is ending.

A gem for the ages...

"I have seen the future, and it works."

mulct is a cool little word, though

I'd like to nominate Robert Reich:

"America, and its faltering economy, need unions to restore prosperity to the middle class."

Two sentences from the same article are even better. Alas, if only a comma instead of a period were used, it would be a great single sentence:

"The way to get the economy back on track is to boost the purchasing power of the middle class. One major way to do this is to expand the percentage of working Americans in unions."

The article is here: http://www.latimes.com/news/opinion/la-oe-reich26-2009jan26,0,1124419.story

History books are chalked full of such stupidity, too numerous to mention. One of my favorite historians is Fernand Braudel, but his interpretations of events are pure Marx. Fortunately, he manages to keep his accounts of events and his interpretations separate.

I'm partial to this gem that came out this week:

"At this point, anything that boosts the government’s deficit over the next two years passes the benefit-cost test–anything at all."
---J. Bradford DeLong

Not economics but Durants: click thru to read my post...

"I'm not an economist but actually, if you ignore the word "mulct" and replace it with the phrase "extract maximum profit", then the statement seems factually accurate." -- Ujjwal Deb, December 5, 2009 7:03 AM

Problem is, "extract maximum profit" isn't substitutable for "mulct". A more accurate substitute would be "defraud".

It is interesting that Durant would come up. I've been trying to locate a copy of his book "The Tragedy of Russia."

"American became a superpower because its economic competitors were destroyed during WWII."

As ~featured in "Capitalism: A Love Story."

How about Bush's classic that he was abandoning the free market (such as it wasn't)to save the free market.

I've been listening to History 5 at UC Berkley where a lecturer on the French Revolution claimed (I'm paraphrasing badly here)

After the revolution...price controls were lifted so people could charge the maximum price...which resulted in inflation.