I'm starting to wonder about my sanity in re: the pile-up
of gross distortions of n-c theory in the past week.
This is not to say there are legions of things to criticize
in NC theory, but I have to wonder what sort of picture
people have gotten (or devised by themselves).
I'm no theoretical wizard myself, but the barrage
of error seems to be on a pretty low level.
The straw breaking the proverbial camel's back was the
stuff about methodological individualism as the fallacious
root of fallacious econ. Evidently some critics gloss
over the fact that macro-theory is not based on
"adding up" the decisions of individuals. What it is
based on is another matter, worthy of criticism in its
own right. It is true that the general context strips
individuals of their social relations, but C = f(Y)
is not formally derived from lots of little c's and y's.
In Keynes, of course, it isn't formally derived at all.
He basically pulls it out of his ass.
Micro isn't as bad as implied either, or not bad in the same
way. I could say demand for Starbucks' coffee depends
on price, urban density, and the unmarried share of the
population, the latter non-individualistic social relations
of sorts. Typically the claims of micro models are much
more modest than the criticism would imply.
Then there's the poop about micro theory not being
capable of modelling altruistic behavior, something
any putz -- including me -- who had cracked a public
finance text would know is wrong.
Then there's this canard that n-c theory posits some
infinitude of resources derived from price signals.
MP says this is 'implicit doctrine,' which sounds like
an oxymoron to me. You could say n-c theory inspires
idiotic optimism as some kind of cultural artifact, but
that's a different matter. Just because a price increase
constitutes an incentive to look for substitutes doesn't
mean supplies will always be forthcoming. Talk about
your ecological fallacy.
I'll only note in passing the warped concept of
efficiency that is attributed to nc theory. In the past
I took the trouble of posting a textbook-like precis
on what efficiency is held to be, in contrast to the
Third Reich imagery.
Maybe it doesn't matter if most familiar with 'straight'
econ will not be any more persuaded by good criticism
than bad . . . Feh. Time for bed.
mbs
