Read almost any recent critique of neoclassical economic theory, and you will find its unreality pointed out. Homo economicus is nothing like flesh-and-blood humans, we are told--again, and again, and again. Remarkably, this critique has been leveled against the precursors of neoclassical economics, all the way back to the origin of the profession. That’s what we can learn from a new book titled Ricardo’s Dream: How Economists Forgot the Real World and Led Us Astray, by Nat Dyer, an able scholar and entertaining writer on the subject. The title refers to David Ricardo (1772-1823), whose influence was on a par with Adam Smith, Thomas Malthus, Jeremy Bentham, James Mill, and John Stuart Mill. His dream was to discover economic laws as universal and mathematically tractable as Newton’s laws of motion. He became so mesmerized by his models that he gave them priority over the more complicated real world—just like the neoclassical economists of today.
My conversation with Dyer takes a deep dive into the history of economics and emerges with a prescription for curing economics' addiction to unreal theories in the present.
Go here for my review of Dyer's book in the online magazine Evonomics.com.
