Wednesday, July 25, 2012

A Gem from Chomsky on the Stupidity of Neoclassical Economics

The gem comes from 1.41 to the end of the video, thought one has to watch the whole video to appreciate his remark on the stupidity of the efficient markets hypothesis and the housing bubble. After he makes his final comment, the deadpan silence that follows is the funniest thing I have seen all week.


  1. Neoclassical economics might be stupid from a theoretical perspective, but I think its persistence is a good example of the phrase "follow the money." Neoclassical economics tends to buttress the interests of the rich more than most alternatives, so it continues to walk the earth, zombie-like.

  2. Don't the supporters of EMH

    a) specify various degrees of EMH in various markets?

    b) acknowledge that there will be major mis-pricing of assets when there is a major difference in information available?

    Or have I been taught a more balanced and moderate version of EMH in my college finance classes? To be clear, it was the Fama and French studies that we were taught.

    1. Just out of curiosity Prateek, where did you study?

    2. I just finished undergraduate studies at the University of Delhi. I was a general business, finance, and economics student.

  3. Prateek,

    That sounds like the EMH with New Keynesian imperfections added in.

  4. I wonder if I should show this to Bryan Caplan.

    Perhaps it would incite him into joining us in the campaign against you. Yes, he is critical of Austrian Economics, but we can set that aside.