P: I agree with Gerald. Well expressed.
This approach – stylized theory – is the approach of science. Science has been stunningly successful. Economics is harder than physics because to match real-world concepts and relationships to the idealised concepts and relationships is more difficult. So its success is not so stunning. But it does work to some extent.
Compare with the other social sciences which do not do the stylized theorising. They have nothing. No body of theory. Perhaps the fields of law and linguistics are partial exceptions but elsewhere in social science (psychology, sociology, anthropology, political science): zilch. Scholars in those fields do not have the sort of conversation that takes place in economics. They cannot.
So I think that economists should be glad to have a winning approach and that to attack the basic method is misguided. I say it is not the method but the premises which need attention. The basic premise of self-interest is not wrong but is incomplete. It seems to me that for economics to advance, working out stylized theoretical relationships premised on other social assumptions is necessary.
Altruism, for example, is as genuine a human motivator as self-interest. Economics ignores it. Yet it exists and has economic consequences. So the task would be to theorise altruism in the stylised way. I think that until this happens economics will not break out of its theoretical stasis.
Me: Precisely. And what is a more altruistic concept than Monetary Grace as in Gifting? The real problem isn’t just the fallacious theoretical assumptions of neo-liberal economics it’s the current problematic monopolistic monetary and financial paradigm concept that hasn’t changed for the entire course of human civilization.