Robert, I haven't read your article but will make an effort to find it.
I disagree with the direction you are taking. Have you ever been at a
conference with a panel up front, putting out a line? They might have a bit of
disagreement but essentially they agree. Someone from the floor takes the
microphone and asks a hard question, thinking that it will totally devestate
the agreed upon line. One of the panelists reponds, at length, ducks the
quesiton but goes on to affirm the original position. Another panelist
supports the first. The person from the audience has lost the mike and some
other question gets asked.
Why let neo-classical micro be the agreed on story?
By the way, I think micro is a story, not a paradigm. A story has to be
replaced by a story. Let's tell our own story.
Neo-classical micro has been shown over and over and over and over to be
logically flawed. Keynes wrote in the early twenties
"The beauty and the simplicity of such a theory [neo-classical micro] are so
great that it is easy to forget that it follows not from the actual facts, but
from an incomplete hypothesis introduced for the sake of simplicity. Apart
from other objections to be mentioned later, the conclusion that individuals
acting independently for their own advantage will produce the greatest
aggregate of wealth, depends on a variety of unreal assumptions to the effect
that the processes of production and consumption are in no way organic, that
there exists a sufficient foreknowledge of conditions and requirements, and
that there are adequate opportunities of obtaining this foreknowledge. For
economists generally reserve for a later stage of their arguments the
complications which arise -- (1) when the efficient units of production are
large relatively to the units of consumption, (2) when overhead costs or joint
costs are present, (3) when internal economies tend to the aggregation of
production, (4) when the time required for adjustments is long, (5) when
ignorance prevails over knowledge, and (6) when monopolies and combinations
interfere with equality in bargaining -- they reserve, that is to say, for a
later stage their analysis of the actual facts. Moreover, many of those who
recognise that the simplified hypothesis does not accurately correspond to
fact conclude nevertheless that it does represent what is 'natural' and
therefore ideal. They regard the simplified hypothesis as health, and the
further complications as disease." (The End of Laissez-faire)
A good book that took your approach, THEORETICAL WELFARE ECONOMICS by de
V. Graaff sets out the assumptions necessary. A book of the assumptions. He
writes "It may also help the reader to appreciate why I shall suggest that the
only price a public enterprise can be advised to set is what the medieval
scholastics would have called the pretium justum." (Cambridge U. Press,
1963.) He also wrote, on the same page, 142, "The measure of acceptance the
marginal cost pricing principle has won among professional economists would be
astonishing were not its pedigree so long and respectable."
Another way in which neo-classical micro was demolished was in the famous
Cambridge Controversy, where Cambridge, Mass was totally routed -- and
Samuelson admitted defeat.
I think teaching neo-classical micro and then critiqueing it is like
setting up a panel controlling the microphone and then asking unanswered
questions from the floor.
In the April HARPER'S magazine, Wendell Berry wrote:
"This idea of a global "free market" economy, despite its obvious moral flaws
and its dangerous practical weaknesses, is now the ruling orthodoxy of the
age. Its propaganda is subscribed to and distributed by most political
leaders, editorial writers, and other "opinion makers."
The "propaganda" Berry refers to is created by economists -- and repeated
and repeated and repeated in economics classrooms. We can't critique it
around the edges. We have to ignore it and tell a new story.
We don't have to get so fancy as developing a new paradigm. Tell the story
you believe in, don't tell the story you don't believe in.
Gene Coyle
Robert Scott Gassler wrote:
> Sorry; I originally sent this on the wrong thread.
>
> Okay. I have an article which outlines my approach to teaching in all my
> courses (though I am sorry to say it is mostly micro):
>
> Robert Scott Gassler, "The Theory of Political and Social Economics: Beyond
> the Neoclassical Perspective," Journal of Interdisciplinary Economics, Vol.
> 9, No.2, 1998, pp.93-124.
>
> The trick is to make a list of the assumptions of what I call the
> "neoclassical default model" (perfect competition) and then treat them as
> jumping-off places by relaxing the assumptions. By the time you are done,
> you have systematically analysed a problem and destroyed students' interest
> in the default model.
>
> I think this will do a reasonably good job until we agree on a better
> paradigm.
>
> Robert Scott Gassler
> Vesalius College
> Vrije Universiteit Brussel
>
> At 22:00 22/05/02 -0700, you wrote:
> >I appreciate the reports that we get from people with expertise outside of
> >the US. I wish that some of you lurkers would step in.
> >--
> >Michael Perelman
> >Economics Department
> >California State University
> >Chico, CA 95929
> >
> >Tel. 530-898-5321
> >E-Mail [EMAIL PROTECTED]
> >
