A central argument in economics is unsettled: what is the purpose of economics?
1) A social science (political economy) that describes human behavior in a monetary economy, regardless of policy wants or demands, so that we construct institutions that provide the least resistance to cooperation. (The german Austrian school)
2) A means of extending the rule of law (moral cooperation) to economics (production distribution and trade): the discovery of rules which determine policy actions. (Chicago and the freshwater school)
3) A means of justifying discretionary action independent of rules. (Krugman and the Saltwater school) I include our host John Quiggin in this group.
The first is the least hubristic, the second more so, but allows planning, the third most hubristic, least moral, and least trustworthy.
Discretion is for choosing flavors of ice cream. There is no room for discretion in law or economics.
Curt Doolittle
The Propertarian Institute,
Kiev, Ukraine