>Ed said:
>
>In Economics 101, under "perfectly
>>competitive equilibrium", everybody is paid their full worth, and there is
>>no possibility of monopoly profit, since monopoly does not exist.
However,
>>like the much maligned economist's assumption of "rationality", perfectly
>>competitive equilibrium is an abstraction. Economists know that it does
>not
>>exist, but that it is nonetheless useful in furthering economic analysis.
>
>Thomas:
>
>If economists know this and continue to defend the system by glossing over
a
>distortion, then how can they claim objectivity and scientific rigor. On
>the one hand they collect statistics, develop models, create mathematics to
>show relationships, all based on a faulty premise - this is scientific
>fraud.
Dear Thomas,
I am becoming just a little exasperated. I'm not sure of where this is
going to lead. But on grounds that some people may be enjoying this debate,
I will continue a little longer.
Since when did economists in general defend the system? Some did, others
did not. Marx was an economist who both recognized the tremendous potential
of capital but totally deplored its impacts. Malthus explored the
relationship between limited resources and growing population, and came to
some pretty dour conclusions. Keynes, and others, recognized the inability
of capitalism to sustain full employment and the need for fiscal and
monetary intervention in the economy. Ever so many economists have
concerned themselves with the maldistribution of income, and with
international inequities. Some have been enormously concerned with the
degree to which industrial activity is sustainable. Far from defending the
system, economists have been in the forefront of those who question it. Read
Lester Thurow, Paul Krugman, and Herman Daly. And if you want to go back
just a little further and more to the radical left, read Paul Sweezy (or
Sweezy and Baran) and Samir Amin.
Economists can claim two kinds of scientific rigor. One is essentially the
same kind as that of the mathematician. They start with certain premises
and assumptions and follow a train of logic to its conclusions. The other
is that of the positive scientist. They formulate a hypothesis and then go
out into the real world to see if there are data out there to substantiate
it. Both methods are valid. Both are grounded in what thinking people have
experienced and seen around them, and both have shed light on human
behaviour. However, economists have never treated either as providing the
be all and end all of knowledge. They have always seen everything as open
to question.
I do hope this helps.
Ed Weick
