Deadly economic myths

Over at Salon, Atkinson and Lind argue that simpleminded faith in economic myths is killing America.  

I say, not just America.

I particularly liked this passage:

Myth 3: The economy is a market.

In the world of Econ 101, “the economy” is usually treated as a synonym for “the market.” But an enormous amount of economic activity takes place outside of competitive markets dominated by for-profit, private firms.

In the industrial nations of the OECD, government spending at all levels on average accounted for 46 percent before the Great Recession. Even in capitalist countries, the government is usually the largest employer, and the largest consumer of goods and services in areas like defense, education and infrastructure. Other non-market sectors responsible for goods and services production include the household (your chores are economic activity too, even if Econ 101 ignores them) and nonprofits like religious institutions, colleges and universities, charities and think tanks like ours. Markets, then, account for around half of a modern nation’s economic activity — maybe less, if uncounted household production is as big a part of the real economy as some have claimed.

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