But as a myth-busting tool, economics is unsurpassed. Perhaps no other science or system of thought has ever busted as many myths as has economics. Yet also: perhaps no other myth-busting enterprise fails as consistently as does economics at convincing large number of people that the myths it busts are in fact busted myths. Acceptance of these myths is constantly reinforced by a combination of (1) innocent economic ignorance (fed, in part, by the above-mentioned great complexity of modern society), (2) not-so-innocent powerful political forces, and (3) a regrettable failure among economists, especially over the past half-century, to engage the public using plain language.Here is his list of economic myths that he believes have been thoroughly disproved but which remain in circulation. In other words, cognitive pollution.
– the myth that the amount of wealth in the world is fixed (and, hence, that Jones’s gains from trade must have come at the expense of Smith or some Smiths);I think it is interesting that there are many people who would actually agree with particular items on this list but then act in an opposite fashion.
– the myth that a higher population of human beings means lower average living standards for human beings;
– the myth that poverty (rather than wealth) has causes;
– the myth that Jones’s successful pursuit of self-interest necessarily harms – or, at the very least, does nothing to help – Smith or some Smiths;
– the myth that mutually consensual trade that occurs across political borders differs in some essential way from mutually consensual trade that occurs within political borders;
– the myth that international trade is a “competition” among nations;
– the myth that prices are arbitrary obstacles established by sellers, and which can be forcibly lowered in order to benefit buyers at the expense only of sellers; (put differently, the myth that a government policy of forcing the prices of goods and services down makes goods and services more accessible and less costly for buyers);
– the myth that wages are arbitrary stipends granted by employers to workers, and which can be forcibly raised in order to benefit sellers of labor (workers) either at no one’s expense or at the expense only of those who purchase labor either directly or indirectly;
– the myth that profits are an unjust and socially pointless (or even harmful) theft of property or value by entrepreneurs and business owners from workers, other suppliers, and consumers;
– the myth that the only, or even the main, costs that people endure in a modern economy are costs expressed in money prices;
– the myth that sustained inflations are caused by rising prices or by higher costs;
– the myth that money is wealth and that wealth is money;
– the myth that there are only a fixed number of jobs for humans to profitably perform;
– the myth that government officials generally have, relative to actors in private-property markets, superior incentives and knowledge to act to promote widespread economic prosperity;
– the myth that raising tax rates necessarily increases government revenues (and, likewise, that lowering tax rates necessarily decreases government revenues);
– the myth that violations of the rights of private-property owners harm only, or even just mostly, those people whose private-property rights are violated;
– the myth that workable, productive, and sustainable complex social orders must be the result of human design (or that human design can improve the workability, productivity, and sustainability of complex social orders).
Take, for example, the belief in the myth that we can design workable, productive, and sustainable complex social orders. I think most people would acknowledge that this is indeed a myth, that the world is too complex for us to effectively "design" an intervention with reliably predictable results. But as soon as something bad happens, those same people will whip around and design some pinpoint policy intervention to implement in order to prevent this bad thing from ever happening again. In other words, they act as if they believe that they can indeed design a workable, productive, and sustainable complex social order.