Srsly Wrong 222 – Economics as Horseshit (w/ Neighbor Science)
Nov 26, 2020
Ryan from Neighbor Science, an expert in neoclassical economics, joins the Wrong Boys to expose the flawed assumptions of economics. They discuss the misuse of efficiency, irrational consumer behavior, power dynamics in economics, Adam Smith's views on landlords and repetitive tasks, market failure, and diverse perspectives on the definition of civilization.
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Core Microeconomic Assumptions Are Unrealistic And Ideological
- The podcast lists core microeconomic assumptions like rational agents, fixed preferences, perfect information, no debt, and Pareto optimality.
- Hosts argue these assumptions are unrealistic, often ideologically motivated to make models tractable.
Most Firms Use Administered Markup Pricing Not Market Equilibrium
- Gardiner Means and Adolf Berle's 1932 study found many firms use administered pricing, not pure market-set prices.
- Administered pricing (markup on estimated unit cost) dominates, undermining the ideal of continuous market equilibrium.
Best Buy Markup Story Shows Administered Pricing At Work
- Speaker 0 recalls working at Best Buy where extreme markups made common items like USB cables cost $30 and later $2 on discount.
- This memory illustrates how administered pricing and promotional markups shape everyday retail prices.
