I wrote: > > transactions costs are only important if you're > > raised as the kind of NC economist with an extremely > > naive view of markets (i.e., a Walrasian). JKS writes: > ??!!! Huh? Wha? Where did that come from? So, are you > saying that if we are Marxists or Institutionalists or > Austrians or Post-Kenysians we can ignore the fact > that transactions are costly, that relevant knowledge > requires effort to acquire which imposes opportunity > costs, etc? I have no idea what you are saying here, > Jim, it can't be anything that dumb. Maybe you mean > that these things are only surprising if you are an > NCE.
that's what I was saying. > OK, I'll buy that. But transaction costs are > incredinly important on all the other theories I > mentioned, it's just that they don't pose a serious > objection to those theories, right? I wasn't saying that transactions costs were unimportant in practice and thus should be ignored. No way. After all, old Karlos didn't ignore them; nor did Joan Robinson do so. There are a lot of ideas that evoke all sorts of brouhaha nowadays (uncertainty, information costs, dynamics, time, non-neutral money, etc.) even though classical economists such as Adam Smith took them for granted. The reason why they attract attention is because the dominant school of economics starts with a vision of the world that ignored such realistic things since they start with an idealized model and try to figure out the world with it (rather than starting empirically). Transactions costs are an example of this kind of idea. Jim
