Well, of course one kind of mathematical
economics can be used to critique another kind.
Thus, one of the problems with Arrow-Debreu,
that Arrow certainly accepts (and Hahn also) is
its static nature. Thus, we now see from dynamic
complexity models how in fact resources (especially
biotic ones) can be overexploited to the point of
collapse.
Barkley Rosser
-----Original Message-----
From: Forstater, Mathew <[EMAIL PROTECTED]>
To: [EMAIL PROTECTED] <[EMAIL PROTECTED]>
Date: Wednesday, February 07, 2001 11:11 AM
Subject: [PEN-L:7845] RE: Re: RE: Critique of mathematical economics
>Many of the key contributors to the gen eq. theory, e.g. Arrow and Hahn,
have
>stated that the most important function of these models is to show how
>impossible it would be for it to hold in the real world, since the
assumptions
>that are required for the solution would likely never exist. So it is a
>'negative' contribution in that sense. Hahn has a great quote that
neoclassical
>economics is:
>
>"very useful when for instance when one comes to argue with someone who
>maintains that we need not worry about exhaustible resources because they
will
>always have prices which ensure their proper use. Of course there are many
>things wrong with this contention but a quick way of disposing of the claim
is
>to note that an Arrow-Debreu equilibrium must be an assumption he is making
>about the economy and then show why the economy can not be in this state.
The
>argument will here turn on the absence of futures markets and contingency
>futures markets and on an inadequate treatment of time and uncertainty by
the
>construction. This negative role of Arrow-Debreu equilibrium I consider to
be
>almost sufficient justification for it, since practical men and ill-trained
>theorists do not understand what they are claiming to be the case when they
>claim a benficent and coherent role for the invisible hand. But for
descriptive
>purposes of course this negative role is harldy a recommendation." (Hahn,
1973)
>
>Frank H. Hahn, 1973, On the Nature of Equilibrium in Economics, Cambridge
U.
>Press.
>
>
>-----Original Message-----
>From: [EMAIL PROTECTED] [mailto:[EMAIL PROTECTED]]
>Sent: Tuesday, February 06, 2001 11:48 PM
>To: [EMAIL PROTECTED]
>Subject: [PEN-L:7837] Re: RE: Critique of mathematical economics
>
>
>In a message dated 2/6/2001 12:28:31 PM Eastern Standard Time,
>[EMAIL PROTECTED] <mailto:[EMAIL PROTECTED]> writes:
>
>
>
>
>Check out Bruno Ingrao and Giorgio Israel, The invisible hand: economic
>equilibrium in the history of science, Cambridge, Mass.: MIT Press, 1990.
>
>
>
>Ingrao and Israel's book is a fine introduction to the Arrow-Debreu world,
>with which I am unfortunately incompletely acquainted, but I recall a
Fortune
>article once claiming the Arrow-Debreu work was somehow the great proof of
>capitalist allocation. Did they really prove their thesis of optimal
>allocation? Cf. Screpanti, E. et. al., An Outline of the History of
>Economic Thought, Oxford: Clarendon,1993, for a review of the research back
>in the fifties. If I am not mistaken the full result failed due to many
>complications.
> But one nice thing about the book (which I didn't finish) is the clarity
of
>the assumptions, must be the Bourbaki style. The problem I had with the
book
>is that the basic model is so so artificial that any deduction from its
>premises is a bit up in the air. Interesting book however.
>
>How about a supercomputer in a bunker next to Fort Knox for basic
allocation?
>G. Hodgson in Economics and Utopia discusses technical advances in
computing
>that are closing on the old Socialist calculation debate. The bureaucracy
in
>Moscow had to deal with 12 million commodities. Now supercomputers can do
>the input-output matrix math in no time at all! Hm.
>
>
>John Landon
>author
>World History and the Eonic Effect
>[EMAIL PROTECTED] <mailto:[EMAIL PROTECTED]>
>http://eonix.8m.com <http://eonix.8m.com>
>
>
>
