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Quotation of the Day…

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… is from pages 320-321 of Vol. 19 of The Collected Works of James M. Buchanan: Ideas, Persons, and Events [2]; specifically, it’s from Jim’s 1986 article “Ideas, Institutions, and Political Economy: A Plea for Disestablishment”:

A genuine revolution in the thinking of economists had occurred.  Keynes had provided a framework with which the whole economy, not just the actors within it, could be analyzed.  Economists were duped into thinking that they could “understand” the operation of a complex economic interaction process by the use of hydraulic-like models that embodied the interdependencies among a relatively small number of macroeconomic variables, with macroeconomic equilibrium being defined independent of that which described incentive-compatible states in the behavior of participating actors.