Thursday, December 21, 2017

NOBEL PRIZE-WINNER SHOULD DO BETTER


“Five books for the investor or economist on your last-minute shopping list”

Economics for the Common Good by Jean Tirole
Translated by Steven Rendall (Princeton University Press, 2017), 576 pages, $37.95.

Jean Tirole, winner of the 2014 Nobel Prize in Economics, brings the dismal science back to the ethical questions and roots that led Adam Smith to transition from his first work, The Theory of Moral Sentiments, to his better known Wealth of Nations. The former attempted to deal with being self-centered; the latter created the “invisible hand” to explain how pursuit of self-interest can provide for common good.
COMMENT
I hope that JEAN TIROLE, a Nobel Laurate, will spend a little time reading Adam Smith before he repeats his awsome error in claiming that Adam Smith “created” the invisible hand to “explain how the pursuit of self-interest can provide for the common good”.
His assertion is so wrong on several levels that if Jean Tirole made similar errors in his mathematics he would embarras himself among his peers.

The fact that Andrew Allentuck did not pick up this awasome error is also not surprising. It reflects the state of modern economics and its lack of knowledge about both Adam Smith and the history of economics.

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