I cannot disagree with you that having something like 500 economists is extremely unhealthy. As you say, it is not conducive to independent, objective research. You and I know there has been censorship of the material published. Equally important, the location of the economists in the Federal Reserve has had a significant influence on the kind of research they do, biasing that research toward noncontroversial technical papers on method as opposed to substantive papers on policy and results
Interpretation
The quote critiques the effect of excessive economists on unbiased research within institutions like the Federal Reserve.
Milton Friedman expresses concern that having a large number of economists, particularly within the Federal Reserve, detracts from independent and objective research. He suggests that this abundance leads to censorship and a bias towards publishing noncontroversial technical studies, rather than engaging with the more substantive and often contentious policy discussions that are crucial for economic understanding and decision-making.
In practice
This quote can be used in a lecture on economics to illustrate the challenges of objectivity in research.
The economic miracle that has been the United States was not produced by socialized enterprises, by government-unon-industry cartels or by centralized economic planning. It was produced by private enterprises in a profit-and-loss system. And losses were at least as important in weeding out failures, as profits in fostering successes. Let government succor failures, and we shall be headed for stagnation and decline.
Universities exist to transmit knowledge and understanding of ideas and values to students not to provide entertainment for spectators or employment for athletes.
There is no place for government to prohibit consumers from buying products the effect of which will be to harm themselves.
There is one and only one social responsibility of business - to use it resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.
The great danger to the consumer is the monopoly -whether private or governmental. His most effective protection is free competition at home and free trade throughout the world. The consumer is protected from being exploited by one seller by the existence of another seller from whom he can buy and who is eager to sell to him. Alternative sources of supply protect the consumer far more effectively than all the Ralph Naders of the world.
The strongest argument for free enterprise is that it prevents anybody from having too much power. Whether that person is a government official, a trade union official, or a business executive. If forces them to put up or shut up. They either have to deliver the goods, produce something that people are willing to pay for, are willing to buy, or else they have to go into a different business.
Modern economics is a set of formal models and equations purporting to fully determine human behaviour, at least in the economic realm. And there is no way that uncertainty can be compressed into determinate mathematical models.
Actually, in my advanced, high-falutin' frontier economics, I often work with what I define as 'money metric utility,' and I ask people, 'Do you really want that? What are you willing to pay for that?'
Economic growth and environmental protection are not at odds. They're opposite sides of the same coin if you're looking at longer-term prosperity.
Big companies are reliant on institutional investors on a punishing schedule which leads to ruthless behaviour. This form of capitalism with this structure and incentives will never deliver sustainability.
Let me put it very forcefully: No large economy has ever recovered from an economic downturn through austerity. It's not going to happen in the United States, and it's not going to happen in Europe.
How could economics not be behavioral? If it isn't behavioral, what the hell is it?
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