Well, I read every word of Paul Krugman's article about the failure of Economics as a discipline and of economists as a group, and I don't disagree with any of it, but he is missing out on some big issues that also need to be discussed and understood before we actually know what is going on in our world.
- English majors understand human nature better than economists do. If, as Krugman said, "homo economicus" is perfectly rational, where did the folks who came up with this simplistic idea go to college, and didn't they read, say, Shakespeare, Locke, Rousseau, Hobbes, Dickens, Trollope, Proust, Zola, or even Freud? To suppose at this late date that people are rational in anything, but especially in consideration of their own self-interest, is to be painfully, gaspingly ignorant. The works of all of these writers are full of characters who act irrationally -- who are greedy and cruel and selfish and angry when it would be far more pleasant and healthy to be a "rational actor." Emile Zola, in particular, anatomized our current era of irrational economic misery between 1871 and 1893, in his Rougon-Maquart series. In "The Kill" and "The Belly of Paris," he wrote about wretched excess. In "The Ladies' Paradise," he wrote about Amazon.com driving independent booksellers out of business. In "Money," he wrote about financial speculation. In "The Debacle," he wrote about the stupid wars we get ourselves into. Go read one -- you will be amazed that plus ca change, plus c'est le meme chose, no matter how economists feel that they are reinventing the world.