Anyone ever read or attend lectures by Dr. Norm Finkelstein?

[ThatRobGuy]

It's very easy to predict how the market will react. If someone is selling widgets for $20, and someone else is selling the same widget for $10, all other things being equal, we will buy from the person selling for $10. This is a science experiment we all participate in almost every day. The science is so "hard" a 5 y.o. child can understand it.

That would be just an acknowledgement of the general principles of supply/demand/pricing on a broader level.

But the study goes much deeper than that, and drifts off into several other speculative concepts.

That "all other things equal" is the kicker... it makes for a clean analysis on paper for a Econ 101 homework assignment, but is one that never plays out in the real world.

In my 40+ years, I don't know that I've ever encountered the situation where there's two identical businesses, equidistance from my current location, that are selling identical products, that are equals in every way (to where price is literally the only deciding factor)


Some examples:
Millennials and GenZ have an interesting shopping pattern (according to the data) where they will actually pay more for the same product, for reasons that have nothing to do with the product itself -- brand association, the company having views on other issues that match their own.

Likewise, some people will avoid certain brands for the same reason.

Certain fad products will become a boom for reasons that could've never been predicted, and then fizzle out just as quickly.

Myself as an example... when I do my grocery shopping, I'll actually drive a little further, and pay a little more, to buy the exact same stuff, because prefer to shop in comfort in a less congested store. I have family members that are the complete opposite, they'll enter the Thunderdome that is Walmart on Saturday morning, in order to save $7 on their weekly shopping trip or take advantage of a specific sale.


A big part of microeconomics is a subfield referred to as "behavioral economics", and is highly speculative. As, a huge percentage of our purchases don't follow the textbook supply-demand curve.

 

[Chesterton]

That would be just an acknowledgement of the general principles of supply/demand/pricing on a broader level.

But the study goes much deeper than that, and drifts off into several other speculative concepts.

That "all other things equal" is the kicker... it makes for a clean analysis on paper for a Econ 101 homework assignment, but is one that never plays out in the real world.

In my 40+ years, I don't know that I've ever encountered the situation where there's two identical businesses, equidistance from my current location, that are selling identical products, that are equals in every way (to where price is literally the only deciding factor)


Some examples:
Millennials and GenZ have an interesting shopping pattern (according to the data) where they will actually pay more for the same product, for reasons that have nothing to do with the product itself -- brand association, the company having views on other issues that match their own.

Likewise, some people will avoid certain brands for the same reason.

Certain fad products will become a boom for reasons that could've never been predicted, and then fizzle out just as quickly.

Myself as an example... when I do my grocery shopping, I'll actually drive a little further, and pay a little more, to buy the exact same stuff, because prefer to shop in comfort in a less congested store. I have family members that are the complete opposite, they'll enter the Thunderdome that is Walmart on Saturday morning, in order to save $7 on their weekly shopping trip or take advantage of a specific sale.


A big part of microeconomics is a subfield referred to as "behavioral economics", and is highly speculative. As, a huge percentage of our purchases don't follow the textbook supply-demand curve.

Right, the laws of economics do not predict the behavior of individuals. That would be nigh-on impossible. It predicts behavior of people in aggregate.

 

[Aaron112]

Right, the laws of economics do not predict the behavior of individuals. That would be nigh-on impossible. It predicts behavior of people in aggregate.

? what ? There's nothing impossible about that. I think the CIA does that for a century now. May well be that Other even more harmful groups or group leaders have done so for thousands of years.
Much as I hate to even mention ai, ai is doing that at the rate (or speed) of over a trillion operations per second!

 

[Chesterton]

? what ? There's nothing impossible about that. I think the CIA does that for a century now. May well be that Other even more harmful groups or group leaders have done so for thousands of years.
Much as I hate to even mention ai, ai is doing that at the rate (or speed) of over a trillion operations per second!

Let's say I own a small business that sells widgets, and the worldwide demand for widgets has decreased dramatically. My sales have dropped precipitously in 2025. So I'm going to raise the price. Why on earth would I do that? Because I'm not a very smart businessman. Individuals can do unpredictable things.

 

[ThatRobGuy]

Right, the laws of economics do not predict the behavior of individuals. That would be nigh-on impossible. It predicts behavior of people in aggregate.

Even predicting larger effects in aggregate has left some economic experts stumped in trying to predict trends and impacts.


All of the big names have had their various "hits" and "misses"

Economist	Notable Incorrect Predictions	Notable Accurate Predictions
Thomas Sowell	• Claimed raising minimum wage would always cause large-scale unemployment → multiple hikes (1990s, 2010s, recent state increases) showed smaller or negligible effects.• Predicted affirmative action would universally reduce minority graduation rates → evidence shows some mixed outcomes, but mostly positive.	• Longstanding critique that rent control leads to housing shortages → widely validated by economic research and real-world cases (NYC, SF, Sweden).• Correctly emphasized trade-offs in welfare programs, predicting dependency traps in poorly designed systems.
Milton Friedman	• Said floating exchange rates would naturally stabilize → in reality, they often swung wildly (1970s–80s volatility, emerging market crises).• Forecast that post-2008 QE would spark high inflation → inflation stayed historically low until the 2020s.• Predicted the Euro “would not survive” → it endured despite severe strains.	• Warned in the 1960s–70s that ignoring inflation expectations would cause stagflation → validated by the 1970s crisis.• Advocated ending military conscription, predicting an all-volunteer force could work → U.S. abolished the draft in 1973, largely successful.• Accurately foresaw that steady inflation erodes savings and distorts investment decisions.
Paul Krugman	• 1998: Predicted the internet’s economic impact would be minor, “like the fax machine” → spectacularly wrong.• 2016: Predicted Trump’s election would cause global markets to “never recover” → markets rallied strongly (until COVID).• Early 2010s: Said Eurozone was likely doomed → it survived.	• Correctly predicted that Bush tax cuts + Iraq war spending would produce big deficits (early 2000s).• Warned in 2002–2006 of a U.S. housing bubble → vindicated by 2007–2008 crash.• In 2008, argued strongly for a large fiscal stimulus, predicting weak recovery if it was too small → U.S. stimulus was modest, and recovery was sluggish, fitting his forecast.

 

[ThatRobGuy]

Let's say I own a small business that sells widgets, and the worldwide demand for widgets has decreased dramatically. My sales have dropped precipitously in 2025. So I'm going to raise the price. Why on earth would I do that? Because I'm not a very smart businessman. Individuals can do unpredictable things.

Those aren't the kinds of anomalies and factors that economists are trying to nail down.

That's why applying the overly simplistic "widget factory" examples from econ classes never seems to be an accurate predictor in the real world.

Highlighted famously by Mr. Dangerfield's character in the movie "Back to School"

 

[Chesterton]

Even predicting larger effects in aggregate has left some economic experts stumped in trying to predict trends and impacts.


All of the big names have had their various "hits" and "misses"

Economist	Notable Incorrect Predictions	Notable Accurate Predictions
Thomas Sowell	• Claimed raising minimum wage would always cause large-scale unemployment → multiple hikes (1990s, 2010s, recent state increases) showed smaller or negligible effects.• Predicted affirmative action would universally reduce minority graduation rates → evidence shows some mixed outcomes, but mostly positive.	• Longstanding critique that rent control leads to housing shortages → widely validated by economic research and real-world cases (NYC, SF, Sweden).• Correctly emphasized trade-offs in welfare programs, predicting dependency traps in poorly designed systems.
Milton Friedman	• Said floating exchange rates would naturally stabilize → in reality, they often swung wildly (1970s–80s volatility, emerging market crises).• Forecast that post-2008 QE would spark high inflation → inflation stayed historically low until the 2020s.• Predicted the Euro “would not survive” → it endured despite severe strains.	• Warned in the 1960s–70s that ignoring inflation expectations would cause stagflation → validated by the 1970s crisis.• Advocated ending military conscription, predicting an all-volunteer force could work → U.S. abolished the draft in 1973, largely successful.• Accurately foresaw that steady inflation erodes savings and distorts investment decisions.
Paul Krugman	• 1998: Predicted the internet’s economic impact would be minor, “like the fax machine” → spectacularly wrong.• 2016: Predicted Trump’s election would cause global markets to “never recover” → markets rallied strongly (until COVID).• Early 2010s: Said Eurozone was likely doomed → it survived.	• Correctly predicted that Bush tax cuts + Iraq war spending would produce big deficits (early 2000s).• Warned in 2002–2006 of a U.S. housing bubble → vindicated by 2007–2008 crash.• In 2008, argued strongly for a large fiscal stimulus, predicting weak recovery if it was too small → U.S. stimulus was modest, and recovery was sluggish, fitting his forecast.

New Federal Data Reveals California Has Lost Over 36,000 Fast Food Jobs Since $20 Minimum Wage Law – California Globe

californiaglobe.com

Plus, layoffs aren't the only alternative when forced to pay an unnaturally high wage. They can also raise prices. Before 2020 a fast food combo meal around here cost about $6. Today it's over $12.

Those aren't the kinds of anomalies and factors that economists are trying to nail down.

That's why applying the overly simplistic "widget factory" examples from econ classes never seems to be an accurate predictor in the real world.

Highlighted famously by Mr. Dangerfield's character in the movie "Back to School"

You're making my point. Economists aren't interested in individuals.