Cambridge theories of value and distribution themselves suffer from the very malady which they hope to cure: rhetoric apart, they are deeply infected… - Mark Blaug

Modern economics is “sick”. Economics has increasingly become an intellectual game played for its own sake and not for its practical consequences. Economists have gradually converted the subject into a sort of social mathematics in which analytical rigor as understood in math departments is everything and empirical relevance (as understood in physics departments) is nothing. If a topic cannot be tackled by formal modelling, it is simply consigned to the intellectual underworld. To pick up a copy of American Economic Review or Economic Journal, not to mention Econometrica or Review of Economic Studies these days is to wonder whether one has landed on a strange planet in which tedium is the deliberate objective of professional publication. Economics was condemned a century ago as “the dismal science”, but the dismal science of yesterday was a lot less dismal than the soporific scholasticism of today.

Joan Robinson's much-awaited textbook in “modern economics” perfectly exemplifies the typical attitude of Cambridge economists to micro-economics. The whole of traditional price theory is covered in one chapter … [some] prices are formed by conventional mark-ups on prime costs, the level of the mark-up itself being left unexplained. Apart from this chapter, the book is doggedly macro-economic in treatment … A striking omission from the book is any mention of the closely related concepts of externalities and public goods, which most economists would nowadays regard as the basic ingredients of “market failure” that has come to be fruitfully applied … to problems of pollution and congestion.

Modern Austrian economists go so far as to suggest that the Walrasian approach to the problem of multimarket equilibrium is a cul de sac: if we want to understand the process of competition, rather than the equilibrium end-state achieved by competition, we must begin by discarding such static reasoning as is implied by Walrasian GE theory. I have come slowly and extremely reluctantly to the view that they are right and that we have all been wrong.