Profitable snake-oil will be sold for as long as innocent “greater-fools” demonstrate a willingness to buy.
I’ll first answer the conjecture part of the question posed: “I guess economy should be simple, the law of supply-and-demand. But there is a Keynesian model of an economy? The perfect market, an invisible hand, Adam Smith, etc. Why can’t the economy be explained in one way?”
The laws of supply and demand are manmade foolery. And they have been proven wrong in superstores with virtually unlimited supply. Amazon sells more books that are not in the top 10,000 than are, travel sites sell most tickets to the sum of unpopular destinations, the Palo Alto library rents out 75% of its unpopular books most. A phenomenon of reality captured in book-form by Chris Anderson titled “The Long Tail”. Human behavior that proves the laws of supply and demand saliently wrong, along with much of the economics depending on it.
However, that is nothing compared to the voodoo of economics applying the “invisible hand” as the trump-card to a theory running out of answers. You can’t make this stuff up; it is such ridiculous nonsense.
It is time we reinvent the systems of humanity to become better reflections of reality. A reality steeped in dynamic relativity, quite the opposite to the stale absolutism portrayed by an economic religion that has lost any and all credibility to trace or predict the evolutionary ingenuity and capacity of all of mankind. And if economics can’t do the latter, then why bow down to it?
To answer the main question; the endless iterations of classical economics, including the old resold as new, are all flawed because they attach to the wrong (evolutionary) cause. Hence they become rebels without a cause. Profitable snake-oils for as long as there are innocent “greater-fools” willing to buy.
