How do banks that solicit deposits from pesky customers, all demand cheques services, ATMs, and bank branches survive in competition with banks who can just print money and loan it out at a profit?
David Graeber’s vitriolic essay “Against Economics” in the New York Review of Books has generated responses from Noah Smith and Scott Sumner among others. I don’t disagree with much that Noah or Scott have to say, but I want to dig a little deeper than they did into some of Graeber’s arguments, because even though I think he is badly misinformed on many if not most of the subjects he writes about, I actually have some sympathy for his dissatisfaction with the current state of economics. Graeber wastes no time on pleasantries.
There is a growing feeling, among those who have the responsibility of managing large economies, that the discipline of economics is no longer fit for purpose. It is beginning to look like a science designed to solve problems that no longer exist.
A serious polemicist should avoid blatant mischaracterizations, exaggerations and cheap shots, and should be well-grounded in…
View original post 5,709 more words