Full at http://blog.cheapmotelsandahotplate.org/2011/06/14/the-emperor-has-no-clothes-but-still-he-rules-three-critiques-of-neoclassical-economics/ This appears in the June issue of Monthly Review.
Moshe Adler, Economics for the Rest of Us: Debunking the Science that Makes Life Dismal (New York: The New Press, 2009), 224 pages, $24.95, hardcover; David Orrell, Economyths: Ten Ways That Economics Get It Wrong (Mississauga, Ontario: John Wiley & Sons Canada, Ltd., 2010), 288 pages, $27.95, hardcover, $12.99, paperback (published London: Icon Books, 2010); Yanis Varoufakis, Joseph Halevi, and Nicholas J. Theocaratis, Modern Political Economics: Making Sense of the Post-2008 World (New York: Routledge, 2011, forthcoming), 536 pages, $165.00, hardcover, $65.00, paperback.
Science is often thought to proceed from a theory to experiments that test its predictions. If new data are discovered that cannot be explained by the theory, eventually a new theory arises to replace it. If the new theory can explain everything the old one did plus the new phenomena, sooner or later every scientist will adhere to the new paradigm.
Neoclassical economics is taught at every college classroom in the United States and in almost every country in the world. Graduate students learn no other approach to economics. They are taught that neoclassical economics is a science, on a par with physics and the other natural sciences. There is even a joke that when good neoclassical economists die, they are reincarnated as physicists, but bad ones come back as sociologists. Economists take great pride in the fact that there is an award termed a "Nobel" in their discipline (It is called the Bank of Sweden Prize in Economic Science in Memory of Alfred Nobel"). This proves to them that economics is as applicable to society as physics is to the universe. There are, after all, immutable laws in both. The laws of demand and supply are no different, in principle, than the law of gravity. David Orrell, in Economyths, quotes Lawrence Summers as saying, "Spread the truth—the laws of economics are like the laws of engineering. One set of laws works everywhere."
But the authors of the three books under review deny categorically that neoclassical economics is a science. Economists have taken certain scientific concepts—such as equilibrium, stability, efficiency, feedback loops—and certain mathematical and statistical techniques and notions—such as calculus, probability, normal distribution, randomness, independence—and applied them to society in ways both inappropriate and simple-minded. Each of these writers concludes that, while economics has scientific pretensions, it is primarily an ideology that supports the interests of the rich and powerful, and in the process, confers prestige, influence, and money on its practitioners.