The discussion by Galbraith (1998) is also very useful to understand the history of economic schools in the last decades. I discuss this book in the final chapters.
There also is ample reason to be humble about econometric testing of theories or identifying regularities (see Hendry (1995)), and then we haven’t started yet on the quality of national statistical data. [24]
If we regard the role of economic theory itself, then we cannot overlook the error that economists made with respect to Arrow’s Theorem in the theory of Social Choice.
First of all, there has been a stagnation in theory development:
“Tullock sees public choice as a subject in which there was a burst of interest from the 1950s to the 1970s, but which has now ‘died out’ (p39). The cause of death was the set of unremittingly negative conclusions that issued from the analysis of the Condorcet and Arrow paradoxes.” Sugden (1999).
Secondly, it turns out that economists and Arrow himself gave a wrong interpretation to the mathematics. Below we will present a novel analysis with respect to the Arrow problem, and show that economists have run astray indeed. This gives another reason to be humble.
But, our discussion also provides clarity that social choice can be based on reasonable and morally attractive axioms. And thus there is a logical basis for a Court too.