Greece and Misleading Fables

Michael Stephens | February 29, 2012

Yanis Varoufakis, former adviser to the Greek Prime Miniser and co-author of “A Modest Proposal,” delivers this special report for Channel 4 News on the situation in Greece:

(credit to Naked Keynesianism)

A quick comparison of working hours for supposed Greek “grasshoppers” and German “ants,” or of the generousness of their governments’ respective social welfare expenditures, should help dispel the tiresome insect talk.

Update:  There is a good interview of Varoufakis posted today at Naked Capitalism that opens with a discussion of “the essence of the economists’ inherent error”:

… they erred into thinking it is possible to tell a credible story about how values and prices are formed in complex (multi-sector) economies that grow through time. For decades economists struggled to produce such a narrative. But all their best laid plans for piecing it together crashed on the shoals of indeterminacy. Put simply, their mathematical models could not be solved. At that point economists did one of two things: Either they accepted that it could not be done, or they introduced hidden (and sometimes not to hidden) assumptions that ‘closed’ their model at the expense of credulity (e.g. an assumption that the economy comprises a lone Robinson Crusoe-like figure, or a single commodity, or that all exchanges occurred in a timeless universe and at a flash of a fleeting moment). The former scholars were forgotten by history, as their papers never saw the light of day. The latter built up careers, sometimes radiant ones. Alas, their economics were riddled with only thinly disguised ‘tricks’ the purpose of which was to disguise economics’ ‘inherent error’.

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