When Econs need a shrink
There is a sunk cost in defending the world of Econs built with impossible assumptions
As a student of Economics from when I was in grade eight, I’ve heard the famous Adam Smith words, that the invisible hand of the market will sort everything out. We’re not exactly encouraged to think beyond the text in the Indian education system and it took a postgraduate degree in Economics to understand that what I’d read was so far from reality that it put me off the subject for a long while. My understanding of Smith’s famous phrase is this: when sellers and buyers maximize their own benefit freely, the market is in equilibrium or that prices will rise and fall so that demand and supply meet. This individual maximization of “utility" will benefit the whole community. Therefore, free markets mean good for all.