Any serious economics professor will acknowledge that all the economic “laws” they teach you are basically for illustrative purposes. “Market forces” only behave as described in a perfectly free market, with perfect information on both sides of a transaction, no coercion, no monopolies, and perfectly rational participants.
I compare it to basic physics: you learn how perfectly inelastic, frictionless spheres behave, for simplicity. But perfectly inelastic, frictionless spheres aren’t real, so real experiments aren’t going to match your basic formulas. Likewise, economic laws fall apart as soon as you try to apply them to the real world.
The problem is that it’s basically impossible to isolate economic phenomena. You can conduct a gravity experiment in a vacuum tube, but you can’t make an economic vacuum tube.
Any serious economics professor will acknowledge that all the economic “laws” they teach you are basically for illustrative purposes. “Market forces” only behave as described in a perfectly free market, with perfect information on both sides of a transaction, no coercion, no monopolies, and perfectly rational participants.
I compare it to basic physics: you learn how perfectly inelastic, frictionless spheres behave, for simplicity. But perfectly inelastic, frictionless spheres aren’t real, so real experiments aren’t going to match your basic formulas. Likewise, economic laws fall apart as soon as you try to apply them to the real world.
At least in physics you then learn the approximations and the use cases where your formulas do work
The problem is that it’s basically impossible to isolate economic phenomena. You can conduct a gravity experiment in a vacuum tube, but you can’t make an economic vacuum tube.
And yet you can still use the basic formula for gravitational movement to calculate stuff with enough precision for everyday life.
and you know the price of milk when you go to the grocery store. and next week, but you don’t know what it’s going to be a year from now
and you don’t know it’s wholesale value, or it’s production forecasts on which milk futures are traded. etc.