Economics in Echo Chambers - A Critique of a Critique
The Blind Spots in Economic Discourse
Background
This review caught my attention while I was reading Birchler Muesli's Substack - Gary's Bad Economics Having your wealth and eating it too (Mar 23, 2025). I call it a review but it’s more accurately described as a critique of Gary Stevenson’s Economics. This is Gary talking about Trump’s tariffs on his You Tube channel - The week Trump nearly crashed the world economy.
I didn’t know anything about Gary until sometime last year when I stumbled across his channel on You Tube. Apparently, Gary has some experience in the “City”, (the UK’s Wall Street) as a Swiss Franc interest rate trader. He goes to some lengths to tell us what a great trader he was and how much money he made and in general regards himself and the other people on trading desks as the smartest people in society.
I am always a bit wary of what I call the deification of financial markets and its participants. A market is a market, there are always buyers and sellers, bids and offers. It could be apples, pears, or currency but there should be no all bow down before it because its financial. It’s not mystic, there is no magic elixir that makes market participants wiser than everyone else. In fact, before quants (people with quantitative skills) from Oxbridge invaded the City, trading desks were largely manned by East End barrow boys - types whose main claim to fame is that they could identify a good bid and offer when they saw it. Beyond that, their experience of the world was as limited as the quants from Oxbridge. Nevertheless, it’s how many people have chosen to position themselves in the public discourse. I take Gary at his word; he genuinely has trading experience albeit in Swiss Francs interest rates (I think this must be the forwards as opposed to spot side of currency markets) which the spot FX traders would tell you is a degree or two removed from the cutting edge of financial markets. Yet in putting this out there Gary establishes his credentials – he is someone to be listened to.
According to Gary, he made a lot of money in trading, and being unsatisfied with the job, knowing a bit about markets and having a Masters in economics, he has set out to educate and inform the general public on the great fraud perpetrated on us all by capitalism, markets and elites. Gary is a lefty!
So, as I said I came across this review of his economics by a mainstream economist (Birchler Muesli) on Substack and it’s prompted me to do a review of the review so to speak. More accurately, what I offer below is a critique of the critique that raises broader questions about economics and financial knowledge.
Technical Critique Overview
Birchler Muesli’s review presents a detailed technical critique of Gary's master's thesis on wealth inequality and asset prices. The reviewer methodically breaks down what he views as fundamental flaws in Gary's economic model, primarily focusing on logical inconsistencies in how Gary treats wealth as both fixed and variable at different points in his analysis.
The critique appears technically sound in several key aspects:
The reviewer correctly identifies a fundamental contradiction in Gary's model: Gary assumes wealth is fixed when setting up his model but then uses equations that implicitly allow wealth to be converted to and from consumption goods.
The budget constraint analysis seems valid - if total wealth is truly fixed (as Gary claims), then the rich can only consume their income, not convert consumption goods into more wealth.
The critique of Gary's dynamic model and OLG (Overlapping Generations) extension follows logically from the identified contradictions in the foundational assumptions.
The reviewer makes a strong case that Gary's mathematical formulations don't align with his stated assumptions, creating inconsistencies that undermine his conclusions.
The review is strong in its technical analysis of mathematical inconsistencies within Gary's model. The reviewer demonstrates familiarity with economic modelling principles and effectively shows how Gary's equations contradict his stated assumptions.
That said, without access to Gary's original thesis, I can't independently verify if the reviewer is representing Gary's arguments fairly or if they might be overlooking nuances in Gary's explanations. Additionally, the reviewer's tone is quite dismissive at times, which doesn't affect the logical validity of their arguments but might suggest some bias in the analysis.
Neoclassical Framework Limitations
An important point to note is that both Gary’s thesis and its critique operate entirely within the framework of neoclassical economics, that is within the standard neoclassical assumptions and methodologies:
The focus is on utility maximisation, production functions, and budget constraints
The use of representative agents (the "rich" and "poor")
The emphasis on market clearing and equilibrium conditions
The reliance on mathematical modelling with Cobb-Douglas functions
The overlapping generations framework
The critique doesn't challenge these foundational neoclassical assumptions themselves - it merely points out inconsistencies in how Gary applies them. The reviewer doesn't question whether utility functions, representative agents, or market clearing are appropriate tools to understand wealth inequality in the first place.
This is significant because many heterodox economists (Institutionalist, post-Keynesian, Marxist, Ecological, Feminist, etc.) would argue that these neoclassical tools themselves are inadequate for analysing issues like wealth inequality. They might argue that power relationships, institutional structures, historical path dependencies, or other factors outside standard neoclassical models are more important for understanding inequality dynamics.
Mathematics as Obscuration
The review demonstrates that mathematical formalism, while giving the appearance of rigour and objectivity, can sometimes obscure rather than clarify economic arguments.
This case illustrates several deeper issues:
Mathematical complexity can mask logical inconsistencies - Gary's model appears sophisticated with its equations and variables, but according to the critique, it contains fundamental contradictions in its basic assumptions.
Technical jargon creates barriers to scrutiny - Most people lack the mathematical background to evaluate economic models critically, which means flawed arguments can go unchallenged when presented with enough mathematical flourish.
The map is not the territory - Economic models, regardless of their mathematical elegance, are simplifications of reality. When economists become too enamoured with their models, they can lose sight of the real-world phenomena they're trying to explain.
Credentials and authority can substitute for substance - As noted in the review, Gary frequently cites his credentials (former trader, economist with a master's degree), which can lead audiences to trust his conclusions without examining his methodology. In this connection, the reviewer mirrors Gary-his credential is his PhD.
What this really "proves" is something quite fundamental: economic arguments should ultimately be judged on their logical consistency, empirical support, and explanatory power, not just on their mathematical sophistication or the credentials of their proponents. Mathematics in economics is a tool for clarity, not a substitute for sound reasoning.
Limitations of the Review Itself
While making what appear to be valid technical points, the reviewer has several blind spots and limitations in his critique:
Methodological tunnel vision - The reviewer remains firmly within the neoclassical framework, critiquing Gary's application of the tools rather than questioning whether these tools (utility functions, representative agents, etc.) are appropriate for analysing wealth inequality in the first place.
Lack of empirical grounding - The review focuses almost exclusively on the internal mathematical consistency of Gary's model without examining whether its conclusions match real-world evidence about wealth inequality and asset prices.
Superficial engagement with Gary's actual claims - The reviewer spends most of his energy on technical inconsistencies rather than addressing the substantive question: does increasing wealth inequality drive up asset prices in ways that harm the poor?
Dismissive tone - The reviewer's condescending approach ("masterclass in how not to build a model") suggests a personal rather than purely intellectual critique, which undermines their objectivity.
Missing the forest for the trees - In focusing on mathematical inconsistencies, the reviewer fails to engage with the broader political economy questions that likely motivated Gary's work in the first place.
Implicit defence of the status quo - By focusing solely on technical flaws without offering alternative frameworks to understand inequality, the review implicitly defends conventional economic thinking.
The reviewer demonstrates the same kind of academic narrowness he criticises in Gary - an overreliance on formal modelling at the expense of real-world relevance. Both seem to believe that economic truth emerges primarily from mathematical consistency rather than empirical observation or diverse theoretical perspectives.
Without access to Gary's original thesis, it's difficult to determine whether the review's technical criticisms are fully justified. However, what is clear is that both the thesis and its critique reflect the limitations of mainstream economic analysis when dealing with complex socioeconomic phenomena like wealth inequality. A more comprehensive understanding would require engagement with multiple theoretical frameworks, empirical evidence, and consideration of institutional and historical factors that shape economic outcomes.
The Illusion of Objectivity and the Arrogance of Expertise
In conclusion, this analysis reveals several fundamental lessons for the ordinary citizen. First, economics, despite its veneer of objectivity and scientific rigour, remains fundamentally ideological. The mathematical models and technical vocabulary often serve to obscure rather than illuminate the underlying value judgments and assumptions.
Second, we witness a particular brand of arrogance that permeates economic discourse on all sides. Both financial professionals like Gary and academic economists like his reviewer operate under the conviction that they alone have drunk from the fountain of economic knowledge. The trader believes his market experience grants him superior insight, while the academic economist believes their theoretical mastery does the same. In both cases, credentials and specialised knowledge become shields against substantive criticism rather than tools for deeper understanding.
The fundamental irony in this case is that both left, and right-leaning experts fall into the same trap. Gary, positioning himself as a lefty critic of capitalism, and his more mainstream reviewer, defending conventional economic thinking, both claim exclusive access to economic truth while employing fundamentally similar methodological approaches. Despite their opposing ideological positions, both rely on neoclassical frameworks, mathematical formalism, and appeals to authority rather than engaging seriously with perspectives that challenge their foundational assumptions. Their disagreement masks a deeper agreement about how economic analysis should be conducted and who gets to participate in economic discourse.
This shared arrogance is enabled and reinforced by society's reverence for economic expertise. We are easily dazzled by credentials and technical prowess, allowing impressive qualifications and complex formulae to substitute for clear reasoning and empirical evidence. The mathematical obscurantism of modern economics serves to maintain the privileged position of "experts" as sole interpreters of economic reality, creating an artificial barrier between those with specialised knowledge and everyone else.
To be clear, I'm not suggesting we dismiss economic expertise entirely, quite the opposite. We need more diverse forms of expertise that incorporate lived experiences, institutional analyses, and historical context alongside formal modelling. The problem isn't expertise itself but the artificial narrowing of what counts as legitimate economic understanding.
When evaluating economic arguments, we should look beyond the mathematical flourish and academic pedigree to assess whether the explanation truly captures the complexities of real-world phenomena like wealth inequality. In the end, what matters is not the sophistication of the model or the credentials of its creator, but its ability to help us understand and address the actual economic challenges facing society.
In the interest of full disclosure, I feel I must say that I naturally lean towards Gary's worldview, the gap between the rich and the poor is unacceptable and unsustainable. And in the end, he is trying to right a great wrong with what he has. I differ because what he does in his analysis is a deification of the market and its traders, thereby upholding the same structures and apparatus that supports growing/widening inequality.
My main point is that methodology is never neutral. By adopting neoclassical economic tools and mathematical formalism, even critics of the economic status quo like Gary can inadvertently legitimise a framework that may be fundamentally inadequate for understanding inequality.
The question arises - what would a truly transformative critique of wealth inequality look like. I suggest it would need to:
Break free from neoclassical assumptions entirely.
Incorporate analyses of power relationships and institutional structures.
Ground itself in empirical reality and lived experiences.
Acknowledge its own normative foundations rather than claiming false objectivity.
Be accessible to those directly affected by inequality, not just economic "experts".
My sense is that as Gary continues his journey, he will eventually see the contradiction that his theorisation embodies. I wish him all the best.
Glossary of Economic Terms
City - The UK's financial district in London, similar to Wall Street in the US.
Cobb-Douglas functions - A specific mathematical formula used in economics to represent production relationships between inputs (like labour and capital) and outputs.
Empirical grounding - Testing economic theories against real-world evidence and data rather than relying solely on theoretical models.
Market clearing - The economic principle that assumes prices will adjust until supply equals demand in a given market.
Neoclassical economics - The dominant school of economic thought that focuses on supply and demand, utility maximisation, and rational choice theory.
OLG (Overlapping Generations model) - An economic framework that analyses how different generations interact economically over time, particularly useful for studying issues like social security and public debt.
Representative agents - Simplified models of economic actors (like "the rich" and "the poor") that stand in for entire groups in economic analysis.
Utility maximisation - The fundamental assumption in economics that individuals seek to maximise their satisfaction or "utility" through rational choices given their constraints.