Economic Theory Quotes

All lives are difficult; what makes some of them fulfilled as well is the manner in which pains have been met. Every pain is an indistinct signal that something is wrong, which may engender either a good or bad result depending on the sagacity and strength of mind of the sufferer. Anxiety may precipitate panic, or an accurate analysis of what is amiss. A sense of injustice may lead to murder, or to a ground-breaking work of economic theory. Envy may lead to bitterness, or to a decision to compete with a rival and the production of a masterpiece. As ~ Alain De Botton

People tend to be clueless about prices. Contrary to economic theory, we don't really decide between A and B by consulting our invisible price tags and purchasing the one that yields the higher utility, he says. We make do with guesstimates and a vague recollection of what things are "supposed to cost." ~ William Poundstone

It is ironic that Keynesianism originated as a weapon to combat depression, but became universally accepted and "successful" only during (and because of!) the postwar expansion. At the first sign of renewed world recession, Keynesian theory has proved itself to be a snare and a delusion that has gone into immediate bankruptcy. The resulting "post-Keynesian synthesis" is also the theoretical reason for the reactionary exhumation of the simplistic, neoclassical, and monetarist economic theory of the 1920s. This revival of old theory is highlighted by the award of Nobel prizes in economics to Friedrich von Hayek, whose theoretical work was done before the Great Depression, and Milton Friedman, whose lone voice echoed in the wilderness until the new world economic crisis put his unpopular and antipopulist theories on the agenda of business board rooms and government cabinet rooms in one capitalist country after another. The real reason for the recent interest in fifty-year-old theories is that capital now wants them to legitimize its attack on the welfare state and "unproductive" expenditures on social services, which capital claims to need for "productive" investment in industry, including armaments. ~ Andre Gunder Frank

The individualism of current economic theory is manifest in the purely self-interested behavior it generally assumes. It has no real place for fairness, malevolence, and benevolence, nor for the preservation of human life or any other moral concern. ~ Herman E. Daly

The latter is useful for predictive purposes only to the extent that the individual participant, in the market relationship, is guided by economic interest. Through the use of this specific assumption about human motivation, scholars have been able to establish for economic theory a limited claim as the only positive social science. ~ Anonymous

Among the current discussions, the impact of new and sophisticated methods in the study of the past occupies an important place. The new 'scientific' or 'cliometric' history-born of the marriage contracted between historical problems and advanced statistical analysis, with economic theory as bridesmaid and the computer as best man-has made tremendous advances in the last generation. ~ Robert Fogel

You were probably educated in the conventional economic theories of your period which were magnificent and most ingenious, but
if you will pardon my saying so
all wrong. ~ Robert A. Heinlein

As far as social-economic theory is concerned, I am still a Marxist ~ Dalai Lama

The crisis triggered a fertile period of scientific ferment and revolution in economic theory. ~ James Tobin

Positivism eliminates any kind of natural law principle - for example, that there are economic laws which can be transgressed only at your peril. With positivism, there is a tendency to leap into ad hoc economic theory. ~ Murray Rothbard

The ideas of economists and political philosophers, both when they are right and when they are wrong are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist. ~ John Maynard Keynes

We are all far less rational in our decision-making than standard economic theory assumes. Our irrational behaviors are neither random nor senseless: they are systematic and predictable. We all make the same types of mistakes over and over, because of the basic wiring of our brains. ~ Dan Ariely

Economic theory is the most prestigious subject of instruction and study. Agricultural economics, labor economics and marketing are lower caste fields of study. ~ John Kenneth Galbraith

We could solve all our problems if only we were the efficient, rational human beings of standard economic theory and had politicians willing to think in the long-term interest of their people rather than their own. ~ Jeremy Grantham

A potentially useful property of forecasts based on cointegration is that when extended some way ahead, the forecasts of the two series will form a constant ratio, as is expected by some asymptotic economic theory. ~ Clive Granger

Even though the transformation of energy, in all of its various forms, is the very basis of all economic activity, only a tiny fraction of economists have even studied thermodynamics. And only a handful of individuals inside the profession have attempted to redefine economic theory and practice based on the energy laws. ~ Jeremy Rifkin

It was not until I got my first job, at the University of Washington in Seattle, and began playing chess with Don Gordon, a brilliant young theorist, that I learned economic theory. ~ Douglass North

The IMF economists were doubtless shaken by the extreme failures of their prescriptions over many years, and by the collapse of the intellectual edifice of economic theory on which they were relying. ~ Noam Chomsky

Voluntary communism, together with laissez-faire capitalism, has nothing to be ashamed of on moral and economic grounds. They can each hold up their heads, high. Far from enemies, they are merely opposite sides of the same voluntaristic coin. Together, they must battle state coercion, whether called State Capitalism or State Socialism. The point is, "left" vs. "right" is a red herring. The reddest and perhaps most misleading red herring in all political-economic theory. ~ Walter Block

The first issue to be settled is whether socialism has a right to exist Are its allegations concerning the present system true? Is industry proceeding on a principle of fraud? I wish to test the power of recent economic theory to give an exact answer to this question. ~ John Bates Clark

In neo-classical economic theory, it is claimed without evidence that people are basically self-seeking, that they want above all the satisfaction of their material desires: what economists call "maximising utility". The ultimate objective of mankind is economic growth, and that is maximized only through raw, and lightly regulated, competition. If the rewards of this system are spread unevenly, that is a necessary price. Others on the planet are to be regarded as either customers, competitors or factors of production. Effects upon the planet itself are mere "externalities" to the model, with no reckoning of the cost - at least for now. Nowhere in this analysis appears factors such as human cooperation, love, trust, compassion or hatred, curiosity or beauty. Nowhere appears the concept of meaning. What cannot be measured is ignored. But the trouble is that once our basic needs for shelter and food have been met, these factors may be the most important of all. ~ Carne Ross

On traditional economic theory:
We do not play chess as if we were a grandmaster, invest as if we were Warren Buffett, or cook like an Iron Chef. It is more likely we cook like Warren Buffett, who loves to eat at Dairy Queen. ~ Richard H. Thaler

In her most recent project, she tested 356 children, ages five to ten, who were brought to Monell to determine their "bliss point" for sugar31. The bliss point is the precise amount of sweetness - no more, no less - that makes food and drink most enjoyable. She was finishing up this project in the fall of 2010 when she agreed to show me some of the methods she had developed. Before we got started, I did a little research on the term bliss point itself. Its origins are murky, having some roots in economic theory. In relation to sugar, however, the term appears to have been coined in the 1970s by a Boston mathematician named Joseph Balintfy, who used computer modeling to predict eating behavior. The concept has obsessed the food industry ever since. ~ Michael Moss

For Marx, 'pure' economic theory, that is economic theory which abstracts from a specific social structure, is impossible. ~ Ernest Mandel

Every non-Marxist economic theory that treats human and non-human productive inputs as interchangeable assumes that the dehumanisation of human labour is complete. But if it could ever be completed, the result would be the end of capitalism as a system capable of creating and distributing value. ~ Yanis Varoufakis

Every socialist wishes to revolutionize society from the economic angle and all the blessings he expects are to come through a change in economic institutions. This of course implies a theory about social causation - the theory that the economic pattern is the really operative element in the sum total of the phenomena that we call society. ~ Joseph Alois Schumpeter

My interest in economics has always been in the whole corpus of economic theory, the interrelationships between the various fields of theory and their relevance for the formulation of economic policy. ~ James Meade

I believe myself to be writing a book on economic theory which will largely revolutionize - not, I suppose, at once but in the course of the next ten years - the way the world thinks about economic problems. ~ John Maynard Keynes

Almost all systems of economic thought are premised on the idea of continued economic growth, which would be fine and dandy if we lived on an infinite planet, but there's this small, niggling, inconvenient fact that the planet is, in fact, finite, and that, unlike economic theory, it is governed by physical and biological reality ~ George Monbiot

There is much of economic theory which is pursued for no better reason than its intellectual attraction; it is a good game. We have no reason to be ashamed of that, since the same would hold for many branches of mathematics. ~ Sir John Richard Hicks

In essence, then, the common picture of economic thought after Smith needs to be reversed. In the conventional view, Adam Smith, the towering founder, by his theoretical genius and by the sheer weight of his knowledge of institutional facts, single-handedly created the discipline of political economy as well as the public policy of the free market, and did so out of a jumble of mercantilist fallacies and earlier absurd scholastic notions of a 'just price'. The real story is almost the opposite. Before Smith, centuries of scholastic analysis had developed an excellent value theory and monetary theory, along with corresponding free market and hard-money conclusions. Originally embedded among the scholastics in a systematic framework of property rights and contract law based on natural law theory, economic theory ~ Anonymous

Even before I came to Chicago, I had gotten interested in the existence of dispersion of prices under conditions which economic theory said would yield a single price. ~ George Stigler

Basic economic theory. People behave differently based on how much they think something's worth. Because everyone got their chips for free, people made huge bets on every hand - no matter what they were holding. People who play with everything on the line - for real - don't act like that. ~ Elle Lothlorien

Preindustrial living standards are predictable based on knowledge of disease and environment. Differences in social energy across societies were muted by the Malthusian constraints. They had minimal impacts on living conditions. Since the Industrial Revolution, however, we have entered a strange new world in which economic theory is of little use in understanding differences in income across societies, or the future income in any specific society. Wealth and poverty are a matter of differences in local social interactions that are magnified, not dampened, by the economic system, to produce feast or famine. ~ Gregory Clark

To put it bluntly, there isn't one economic theory that can single-handedly explain Singapore's success; its economy combines extreme features of capitalism and socialism. All theories are partial; reality is complex. ~ Ha-Joon Chang

We become slaves the moment we hand the keys to the definition of reality entirely over to someone else, whether it is a business, an economic theory, a political party, the White House, Newsworld or CNN. ~ B.W. Powe

I have never believed that central banks should have rigid inflation targeting. That is not a good thing to stabilize. There is nothing in economic theory to back this. ~ Robert Mundell

A lot of things that we cannot buy and sell in markets used to be totally legal objects of market exchange - human beings when we had slavery, child labour, human organs, and so on. So there is no economic theory that actually says that you shouldn't have slavery or child labour because all these are political, ethical judgments. ~ Ha-Joon Chang

Economic theory has demonstrated in an irrefutable way that a prosperity created by an expansionist monetary and credit policy is illusory and must end in a slump, an economic crisis. ~ Ludwig Von Mises

Conventional economic theory ... counts the depletion of resources as the accumulation of wealth. ~ Mark Lynas

The only inexplicable aspect of the process was that economic theory (which is, after all, what economics students were supposed to know) served almost no function in an investment bank. The bankers used economics as a sort of standardized test of general intelligence. ~ Michael Lewis

A long decade ago economic growth was the reigning fashion of political economy. It was simultaneously the hottest subject of economic theory and research, a slogan eagerly claimed by politicians of all stripes, and a serious objective of the policies of governments. The climate of opinion has changed dramatically. Disillusioned critics indict both economic science and economic policy for blind obeisance to aggregate material "progress," and for neglect of its costly side effects. Growth, it is charged, distorts national priorities, worsens the distribution of income, and irreparably damages the environment. Paul Erlich speaks for a multitude when he says, "We must acquire a life style which has as its goal maximum freedom and happiness for the individual, not a maximum Gross National Product." [in Nordhaus, William D. and James Tobin., "Is growth obsolete?" Economic Research: Retrospect and Prospect Vol 5: Economic Growth. Nber, 1972. 1-80] ~ James Tobin

Good economic theory must give the people the chance to use their talents to build their own lives. We must get away from the traditional route where the rich will do the business and the poor will depend on private or public charity. ~ Muhammad Yunus

Academics place much more importance on rigorous logic. There is also admiration in the profession for subtle reasoning. And mastery of the craft shows itself in the elegance of the intellectual super-structure…. The practitioner, on the other hand, uses economic theory only to the extent that he finds it useful in comprehending the problem at hand, so that practical courses of action will emerge which can be evaluated not merely in narrow economic cost-benefit terms, but by taking into account a wider range of considerations…. A practitioner is not judged by the rigour of his logic or by the elegance of his
presentation. He is judged by results. ~ Goh Keng Swee

We don't see very far in the future, we are very focused on one idea at a time, one problem at a time, and all these are incompatible with rationality as economic theory assumes it. ~ Daniel Kahneman

In short, both experience and economic theory imply that the US could now t to a more competitive dollar without experiencing either increased inflation or decreased economic growth. ~ Martin Feldstein

Economic theory dictates that the value of a company is basically the present value of its future profits. To estimate Facebook's value through its future profits, we need to have a view on its user growth and how this will evolve in the next 10 to 50 years. ~ Didier Sornette

Free market capitalism is far more than economic theory. It is the engine of social mobility-the highway to the American Dream. ~ George W. Bush

Early economic theory was rooted in the Italian, French, and Spanish traditions, which were subjectivist oriented. Then it shifted onto the terrible path by Smith and Ricardo and the British classical tradition, which is 'objectivist' - values are in inherent in production. ~ Murray Rothbard

Nothing has done more to render modern economic theory a sterile and irrelevant exercise in autoeroticism than its practitioners' obsession with mathematical, general-equilibrium models. ~ Robert Higgs

As an undergraduate at UBC in Canada, I fell in love with economic theory. It was the right choice for me. ~ Robert Mundell

Economic theory is devoted to the study of equilibrium positions. The concept of equilibrium is very useful. It allows us to focus on the final outcome rather than the process that leads up to it. But the concept is also very deceptive. It has the aura of something empirical: since the adjustment process is supposed to lead to an equilibrium, an equilibrium position seems somehow implicit in our observations. That is not true. Equilibrium itself has rarely been observed in real life - market prices have a notorious habit of fluctuating. ~ George Soros

This anchoring to a number is the reason people do not react to their total accumulated wealth, but to differences of wealth from whatever number they are currently anchored to. This is the major conflict with economic theory, as according to economists, someone with $1 million in the bank would be more satisfied than if he had half a million. But ~ Nassim Nicholas Taleb

It is also essential that good men and women not be educated and propagandized into believing that real evil is a myth and that all malevolent behavior is merely the result of a broken family's or a failed society's shortcomings, amenable to cure by counseling and by the application of new economic theory. ~ Dean Koontz

One of the big take-aways from a lot of economic theory is that people should engage in consumption smoothing. ~ Emily Oster

Economic theory has nothing to say as to what commodity will acquire the status of money. Historically, it happened to be gold. But if the physical makeup of our world would have been different or is to become different from what it is now, some other commodity would have become or might become money. The market will decide. ~ Hans-Hermann Hoppe

The notion of mental accounts is absent in traditional economic theory, which holds that wealth in general, and money in particular, should be fungible: That is, $100 in roulette winnings, $100 in salary, and a $100 tax refund should have the same significance and value to you, since each C-note could buy the same number of downloads from iTunes or the same number of burgers at McDonald's. Likewise, $100 kept under the mattress should invoke the same feelings or sense of wealth as $100 in a bank account or $100 in U.S. Treasury securities (ignoring the fact that money in the bank, or in T-bills, is safer than cash under the bed). If money and wealth are fungible, there should be no difference in the way we spend gambling winnings or salary. ~ Gary Belsky

But, as the results presented in this book (and others) show, we are all far less rational in our decision making than standard economic theory assumes. Our irrational behaviors are neither random nor senseless-they are systematic and predictable. We all make the same types of mistakes over and over, because of the basic wiring of our brains. So wouldn't it make sense to modify standard economics and move away from naive psychology, which often fails the tests of reason, introspection, and-most important-empirical scrutiny?

Wouldn't economics make a lot more sense if it were based on how people actually behave, instead of how they should behave? As I said in the Introduction, that simple idea is the basis of behavioral economics, an emerging field focused on the (quite intrusive) idea that people do not always behave rationally and that they often make mistakes in their decisions. ~ Dan Ariely

Sometimes you need a major crisis to bring people together. ~ Kishore Mahbubani

First of all, the Big Bang wasn't very big. Second of all, there was no bang. Third, Big Bang Theory doesn't tell you what banged, when it banged, how it banged. It just said it did bang. So the Big Bang theory in some sense is a total misnomer. ~ Michio Kaku

Some might complain that nuclear disarmament is little more than a dream. But that ignores the very tangible benefits disarmament would bring for all humankind. Its success would strengthen international peace and security. It would free up vast and much-needed resources for social and economic development. It would advance the rule of law. ~ Ban Ki-moon

[M]any females would, even assuming complete economic equality between the sexes, prefer residing with males or peddling their asses on the street, thereby having most of their time for themselves, to spending many hours of their days doing boring, stultifying, non-creative work for somebody else, functioning as less than animals, as machines, or, at best - if able to get a "good" job - co-managing the shitpile. What will liberate women, therefore, from male control is the total elimination of the money-work system, not the attainment of economic equality with men within it. ~ Valerie Solanas

The poor pay more, and that's one of the reasons people get trapped at the bottom of the economic ladder. ~ Elizabeth Warren

Temperance workers protested the economic dependence that made married women subject to drunken husbands. Organizations of women workers sought respect and higher wages for women's labor. Women's ~ Ann Jones

And I shall be misunderstord if understood to give an unconditional sinequam to the heroicised furibouts of the Nolanus theory, ~ James Joyce

Politics is for the moment and equation is for eternity. ~ Albert Einstein

The theory of probabilities is basically only common sense reduced to a calculus. It makes one estimate accurately what right-minded people feel by a sort of instinct, often without being able to give a reason for it. ~ Pierre-Simon Laplace

We are all different in every individual person. But from here I ask myself what do they see when I see a car which is red, what colour do they see, do they see also red and is the same colour which I know red for them? ~ Deyth Banger

It is only when people can feel that their lives and the property which their industry has produced today will continue to be safe ... that there can be ... stability of value and ... economic progress ... ~ Calvin Coolidge

I think there is such a thing as a bad seed that comes to flower in certain people. The danger with that theory is that we begin to look for those "troublemakers" early on and try to weed them out. That's very dangerous, because it could work against kids who are just routine troublemakers. ~ James Hillman

I always go with the dictionary definition of feminism, which is just social, political and economic equality for women. ~ Jessica Valenti

We shall see that the mathematical treatment of the subject [of electricity] has been greatly developed by writers who express themselves in terms of the 'Two Fluids' theory. Their results, however, have been deduced entirely from data which can be proved by experiment, and which must therefore be true, whether we adopt the theory of two fluids or not. The experimental verification of the mathematical results therefore is no evidence for or against the peculiar doctrines of this theory. ~ James Clerk Maxwell

A hypothesis or theory is clear, decisive, and positive, but it is believed by no one but the man who created it. Experimental findings, on the other hand, are messy, inexact things, which are believed by everyone except the man who did that work. ~ Harlow Shapley

We face a far greater risk of psychological depression than of economic recession. ~ Todd G. Buchholz

The true test of a brilliant theory [is] what first is thought to be wrong is later shown to be obvious. ~ Assar Lindbeck

There is no worse material poverty than one that does not allow for earning one's bread and deprives one of the dignity of work. Youth unemployment, informality, and the lack of labor rights are not inevitable; they are the result of a previous social option, of an economic system that puts profit above man; if the profit is economic, to put it above humanity or above man, is the effect of a disposable culture that considers the human being in himself as a consumer good, which can be used and then discarded. ~ Pope Francis

The world of 1906 ... was a stable and a civilized world in which the greatness and authority of Britain and her Empire seemed unassailable and invulnerably secure. In spite of our reverses in the Boer War it was assumed unquestioningly that we should always emerge "victorious, happy and glorious" from any conflict. There were no doubts about the permanence of our "dominion over palm and pine", or of our title to it. Powerful, prosperous, peace-loving, with the seas all round us and the Royal Navy on the seas, the social, economic, international order seemed to our unseeing eyes as firmly fixed on earth as the signs of the Zodiac in the sky. ~ Violet Bonham Carter

Occupy Wall Street is meant more as a way of life that spreads through contagion, creates as many questions as it answers, aims to force a reconsideration of the way the nation does business and offers hope to those of us who previously felt alone in our belief that the current economic system is broken. ~ Douglas Rushkoff

According to Christian belief, man exists for the sake of God; according to the liberal church, in practice if not in theory, God exists for the sake of man. ~ John Gresham Machen

The pursuit of the vibrant seems to be the universal job description of the nation's city planners nowadays. It is also part of the Obama administration's economic recovery strategy for the nation. ~ Thomas Frank

Some champions of ever-greater governmental power and spending invent the theory that the taxpayers, left to themselves, spend the money they have earned very foolishly, on all sorts of trivialities and rubbish, and that only the bureaucrats, by first seizing it from them, will know how to spend it wisely. ~ Henry Hazlitt

Certainly in order to understand the natural world one needs clarity, logic, and the capacity for theory building. But that understanding tends to improve because and to the extent that it is provisional, hypothetical, when it looks for disconfirmation in the particular rather than final proof as a universal. ~ Talal Asad

Parker was also proving my theory. For instance, when Parker and Roger first started seeing each other, Parker got sick. Roger went to his house to cook him dinner and take care of him. That would never happen with a straight guy. If a straight guy got sick and he'd just started dating a woman and she wanted to take care of him, ~ Candace Bushnell

You're afraid he'll leave you and you'll fall apart. You don't know that you can get along without him and you're afraid to find out because then your whole potty theory will come tumbling down. You'll have to stop thinking of yourself as weak and dependent and you hate that. ~ Erica Jong

There's always a hole in theories somewhere if you look close enough. ~ Mark Twain

Tourism, human circulation considered as consumption is fundamentally nothing more than the leisure of going to see what has become banal. ~ Guy Debord

If small business goes, big business does not have any future except to become the economic arm of a totalitarian state. ~ Philip D. Reed

Peace in Europe can only come through union in one economic system. The United States of Europe are overdue. ~ Henry Williamson

In recent philosophy there has been a growing awareness of the gap between the abstract principles proposed by philosophers and the ways in which people actually think. The kind of rationality admired in the theory of knowledge is idealization. In the real world people have to act on beliefs often based on fragmentary and unreliable evidence. ~ Jonathan Glover

The content of scientific theory itself offers no moral foundation for the personal conduct of life. ~ Albert Einstein

All that stuff I was taught about evolution, embryology, the Big Bang theory, all that is lies straight from the pit of Hell. And it's lies to try to keep me and all the folks who were taught that from understanding that they need a savior. ~ Paul Broun

The left is far more concerned with attacking America - its alleged racism, sexism, homophobia, Islamophobia and economic inequality - than with fighting Islamism. ~ Dennis Prager

Marxists have some way of analyzing the development of affairs which enables them to judge far in advance of scientific thinkers what the trend of social and economic development is to be. ~ John Desmond Bernal

But our system of regulation must keep up with this. If it fails to keep up, it will hold back economic expansion. We need financial market regulation that works at national and European level. ~ John Bruton

The theory that the biosphere was created without evolution, a few thousand years ago, is ruled out by overwhelming scientific evidence. To claim that there are 'alternative (always better) Biblical explanations of the same data', which make creationism a reasonable alternative to our best theories of biology and physics, is appalling intellectual dishonesty. ~ David Deutsch

One must either accept some theory or else believe one's own instinct or follow the world's opinion. ~ Gertrude Stein

On economic matters Garrett had a brilliant simplicity. In November 1913, while editor of the Annalist, he began a monthly column on money in Everybody's, writing as John Parr. One of the most common questions from readers was why the government simply didn't print money to spend on public works, instead of borrowing it at interest. It was a variant of the Coxey idea. Garrett explained that money is not wealth, but a claim on wealth, and that you do not add to wealth by creating more claims to it.4 ~ Bruce Ramsey

The beauty of string theory is the metaphor kind of really comes very close to the reality. The strings of string theory are vibrating the particles, vibrating the forces of nature into existence, those vibrations are sort of like musical notes. So string theory, if it's correct, would be playing out the score of the universe. ~ Brian Greene

The farther the experiment is from theory, the closer it is to the Nobel Prize. ~ Irene Joliot-Curie

On the way from mythology to logistics thought has lost the element of self-reflection and today machinery disables men even as it nurtures them. ~ Theodor W. Adorno