Neoclassical models cannot diagnose man-made crises, only exogenous shocks.

Evidence

Stiglitz has been known to make very insightful comments about how to judge crisis narratives, such as the observation that the crisis was not the consequence of “shocks” impinging on the system, but rather was man-made; the stretch comes in understanding how one was supposed to know this from the standard neoclassical model. — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 763

Categorization

• BMF: The man-made-vs-shock distinction echoes how We (Zamyatin) presents the Integral’s claims of external cosmic threats as ideological cover for internal social contradictions — an outside ‘shock’ narrative concealing endogenous instability.
• XREF: connects to: Neoclassical economics had no framework for deflationary crises — Mark Blyth, Austerity: The History of a Dangerous…, 158; Orthodox economics models structurally excluded the possibility of major crises — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 491; Leading orthodox economists could not agree on the crisis’s actual causes — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 809 (+6 more)

Broader Connections

• Efficient market theory could not imagine internally-generated systemic crisis #corroborates (0.95) — Mark Blyth, Austerity, 130
• Orthodox economics models structurally excluded the possibility of major crises #corroborates (0.93) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 491
• A model imposed from above proved unprepared for the crisis #exemplifies (0.90) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 785
• The financial system failed to foresee crisis because its risk theory denied catastrophes #corroborates (0.88) — Mark Blyth, Austerity, 100
• Orthodox crisis models still measure fluctuations against rational-expectations equilibrium. #expands (0.85) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 2208
• Neoliberals reject market-failure theory, so they cannot see crisis as market glitch #expands (0.82) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 154
• Leading orthodox economists could not agree on the crisis’s actual causes #expands (0.80) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 809
• Mainstream economists admit failure to predict the crisis but resist overhauling the discipline #qualifies (0.75) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 517