Among several statements that I agree with, Jim D writes >As economists usually apply the concept of PO, it's the mythical >Walrasian auctioneer that is "standing above society and class >interests and balancing and harmonizing contending and >irreconcilably contradictory and hostile class interests." This seems to confuse the condition of PO with one possible mechanism that might (theoretically) achieve it. Nothing in the definition of PO requires invocation of a Walrasian auctioneer, and so for example there are lots of neoclassical models of social interactions which implement PO as a noncooperative equilibrium--i.e., no deus ex machina like the Walrasian auctioneer. Further, >the vast majority of neoclassicals instinctively but unconsciously >agree with Margaret Thatcher's sociopathic line that "there is no >society, just individuals" (paraphrased, not a direct quote). I'd >say a larger majority of the neoclassicals (with the small >exceptional group including perhaps such oddballs as John Roemer) >would deny the existence of contradictory and hostile class interests. I agree with the first sentence but not the second. Why wouldn't these neoclassicals grant that there are contradictory interests "along the contract curve"? It seems like just a quibble whether the label "class" is attached to this antagonism--e.g., even Becker would grant that the interests of employers and employees are opposed once pareto efficiency has been attained. [...] > >I think the problem is not with the concept of PO itself as much as >with the _radical disjuncture_ between the kind of theoretical venue >where that concept can reasonably be applied and the real world. I don't understand this point. >As I said before, neoclassical economics makes sense only when (1) >critically and carefully applied to understand the superficial >issues of the workings of capitalism taking the system itself for >granted and as explained and understood by Marxian political >economy; or (2) in purely normative -- i.e. utopian -- theorizing. Jim, in an earlier post you distinguished two senses of "neoclassical economics". Would you apply the above characterization to both senses of the term? >The Walrasian framework, where PO comes into its own, (Although Walrasian equilibrium is in general neither necessary nor sufficient for pareto optimality in theoretical terms) In solidarity, Gil
