If no governments and central banks existed (heaven), which (besides Austrian Economics) school of economic thought would hold up best in the stateless society? After that, which school of thought would you think would quickly become garbage? Obviously many theories would have to vanish overnight. In I guess a scientific sort of view, this would be some sort of ultimate test to see which schools of thought would be correct in theories.
I think the Rational Expectations school might be the only one that would have a leg to stand on besides AE.
That’s not to say there won’t be people who would insist on Keynesianism and all its variants; it won’t die so long as there are people who want to rule over others by force and have the power to print money.
All macroeconomic schools of thought would collapse.
The very existence of this dreadful mockery of a field, which supposes an arbitrary distinction between the “big picture” and the “small picture”, and that the former involves a changed set of rules, shows a naked intellectual dishonesty.
“Macroeconomics” only exist, because government exists, and somebody needs to prove that a positive value-free science can somehow be used for pursuing normative government-sponsored goals. They, of course, need their bread and butter. When the economics profession itself started to show how humans pursue their ends with scarce means, you know something is wrong when it is used to show that individual human action can be discounted.
We’d go back to the basics, the grassroots. We’d start back from the fundamentals beyond schools of thought, and from there, use them to slowly start understanding how capital, labour, and industry work from bottom to top. There would definitely be a big revival in Mises theories on capital, but we might go further, and start learning about capital again, without normative ideas of how government should regulate financial markets, and see how they actually work.
But the need for the economics profession itself might go away, because when we know that individuals with specific situational information work better than any authority sitting in an office and knowing only generalities, there might not be much practical application other than just observation. Perhaps, other than financial markets, knowledge of economics itself would not be necessary. At least, since the only purpose I can see of it is to dismantle government regulation wherever it is unnecessary.
Socialism was first a thought and then was tryied in practice
Capitalism was in practice when we tried to deduct its “principles”
This stateless government is similar to socialism…doom to failure.
Interesting premise. I too would agree that macro theory would vanish. Instead I’d expect microeconomics, with its mumbo-jumbo of graphs, MUs and the like, to flourish even further. I see AE as forever relegated to be held by a minority of economists. But at leats it could come to be seen as “hard” instead of “wrong”.