Economics today has a profound resemblance to medicine before the germ theory of disease.
Lots of people in 1854 were trying to figure out what caused cholera, and how it was transmitted. The dominant theory was “miasma” — basically bad air emanating from smelly, unsanitary conditions, especially in poor areas with lots of leaking, overflowing basement cesspools full of shit. These were contaminating the water supply, of course, so the real transmission mechanism was people drinking the effluent from previous victims.
The solution to the miasma problem? Empty the cesspools into the Thames River— systematically poisoning the water supply. Yes, that’s what they did.
Voltron says: Steve Keen refers to it as "Ptolemaic economics" It reminds me of how the bubonic plague was blamed on cats. After all the cats were killed, the actual cause, flea bearing rats, ran wild.
Full article: http://www.angrybearblog.com/2012/11/the-miasma-school-of-economics.html