No, not a label on cognac, but maybe one that should be affixed to a glass house from which the first economist without sin is allowed to cast stones
So how is it that economists look so bad? The answer is that too many prominent economists chose, for one reason or another, to reject the existing model. Maybe they were just trying to score points by being different; maybe they were sucked in by the approbation of the VSPs, the rewards that came from telling important people what they wanted to hear.
But, Very Serious Other People not only make errors telling important people what they wanted to hear (about purported market failures) that have had serious negative consequences, but don't exactly respond graciously when corrected. In this case, the very same Paul Krugman who has been lecturing (hectoring?) other economists on his blog for several days. Back to the future
We have all seen the way that a good story that happens not to be true can take on a life of its own, and I realize that they [Stan Liebowitz and Steve Margolis] are frustrated with the way that an overstated version of the QWERTY story has spread despite their efforts to stop it. That frustration does not, however, justify the hectoring and unprofessional tone of their piece or the way it misrepresents what those of us who take path dependence seriously have said.
Well here's what Krugman did say about it in his best selling Peddling Prosperity
What conservatives believe in, above all, is the effectiveness of free markets as ways to organize economic activity.... But what if the collective result of those free choices is to lock in a bad result? What if we end up stuck with an inferior technology....And what if another country manages, with a little timely government intervention, to "lock in" an advantage in some major industry-and thereby lock us out? No, the story of the QWERTY keyboard is not just a cute piece of trivia ... it is a parable that opens our eyes to a whole different way of thinking about economics It asserts that the outcome of ....market competition often depends crucially on historical accident....And this conclusion is fraught with political implications, because a sophisticated government may try to make sure that the accidents of history run the way it wants.
Well, what if
the path dependencists favorite example of being stuck with an inferior technology
--the QWERTY keyboard--turns out to be a false story? And what if they also can't provide any other examples, when challenged to do so, for their claims that there are plenty of 'QWERTY worlds' out there?
One thing they don't do is admit error. We know that because, when QWERTY was shown not to be inferior--i.e. one couldn't retrain on the Dvorak Simplified Keyboard for two weeks and increase one's typing speed by between 20-40%, as asserted by Paul David, Brian Arthur et al--they didn't admit they were wrong. And they still won't.
Even after almost three decades of evidence has piled up, and continues to do so, as a new paper by the Scotsman Neil Kay, Rerun the tape of history and QWERTY always wins
(sorry, but it'll cost $36 to read) shows. Kay makes innovative uses of probability theory to show just how well designed Christopher Scholes invention actually was. And, contrary to its critics, not because it slowed typists down.
Neil Kay, in his answer to three comments on his paper shows that this not ancient history, by quoting from Krugman and Wells textbook, which several thousands of economics students read;
“Government can play a useful role
both in helping an industry establish a standard and helping it avoid getting
trapped in an inferior standard known as the QWERTY problem” (p.536) and they
define this in their glossary as;
“QWERTY problem: an inferior industry standard that has prevailed
possibly because of historical accident” (p. G-12)”