Orthodox economics models structurally excluded the possibility of major crises
Evidence
I want to insist that, contrary to urban legend, almost no orthodox economists warned how pervasive the crisis would be or the extent of its devastating character beforehand. The reason was simple: the orthodox models taught at the finest universities at their most advanced levels of macroeconomics had no room for fiscal policy or involuntary unemployment or financial crises or system-wide breakdown. Far from an oversight, this was a matter of common knowledge within the profession. — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 491
Categorization
- XREF: Connects to the broader thesis that the thought collective’s models themselves blocked crisis anticipation — relevant to the reader’s advanced critique of how neoliberalism survived 2008. — connects to: The financial system failed to foresee crisis because its risk theory denied catastrophes — Mark Blyth, Austerity: The History of a Dangerous…, 100; Neoclassical economics had no framework for deflationary crises — Mark Blyth, Austerity: The History of a Dangerous…, 158; Orthodox crisis models still measure fluctuations against rational-expectations equilibrium. — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 2208 (+13 more)
- SEED: Angle: the structural (not incidental) blind spot in DSGE-style economics as a self-reinforcing feature of the orthodox thought collective — why ‘no one saw it coming’ is a category error, not a hindsight claim.
Broader Connections
- Orthodox macroeconomics masked crisis buildup and blocked repairs afterward
#corroborates(0.90) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 662 - The crisis exposed an epistemological contradiction festering inside orthodox economics
#corroborates(0.85) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 619 - Leading orthodox economists could not agree on the crisis’s actual causes
#corroborates(0.80) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 809