RE: Re: RE: Re: : RE: Lies, damned lies, and economics
Gene says: > I've said about all I can say -- I think our disagreement comes down to this: I think it is a mistake to give any ground, any voice at all, to neo-classical micro. < I don't believe in compromising with NC economics. But I don't think that some theories that are identified as "neoclassical" (such as supply & demand) are the sole province of NC economics and thus wrong. Rather, it's how the NC types _use_ S&D that's wrong. >If I am not misinterpreting you, you think that after beginning with neo-classical a critique can be crafted that will put students in the picture. (I didn't intend a pun there, but I kind of like it.) < I didn't say that and I don't know where you got that impression. I said that some valid elements of what's usually thought of as NC economics could be extracted. For example, cost curves make sense, more of less. I'd use Kalecki's idea that excess capacity produces horizontal short-run cost curves, for example. I wrote : >>NC economics allows for non-competitive results with P > MC. << Gene writes:>Of course, NC economics allows for ANYTHING. Every time a hole in logic or absurd assumption is raised, the reply is "Well, yes, but ... " and then a new wrinkle is trotted out to preserve the story/propaganda for another generation. DeLong is doing a new wrinkle now (new to him, apparently) with the discovery that monopoly and discriminatory pricing is good for society. These people cannot be topped or stopped -- only ignored by us. < Unfortunately, given the power that the NC types have (while they deny that power plays any role at all), we can't ignore them in practice. I think I'll ignore deLong, though. BTW, on the issue of P = MC, I'd like to pick up something I said before: even if P does equal private MC, that doesn't mean that it equals social MC. That's an important point, i.e., that even the imaginary "perfect market" isn't perfect, because of externalities. (BTW, we might thank the NCs for clarifying this point: economists have known about externalities for centuries, but it was the NC conceit that there are some places where they don't exist made it clearer what their role was.) I think that this is more important than the P > private MC theory (i.e., monopoly), because I don't think the ideal perfectly competitive market ever has existed outside of a small sector. The emphasis on monopoly encourages the illusion that there once was a golden age of competition. JD
Re: : RE: Lies, damned lies, and economics
Brad did not know about Schumpeter? Eugene Coyle wrote: > Of course, NC economics allows for ANYTHING. Every time a hole in > logic or absurd assumption is raised, the reply is "Well, yes, but ... > " and then a new wrinkle is trotted out to preserve the > story/propaganda for another generation. DeLong is doing a new > wrinkle now (new to him, apparently) with the discovery that monopoly > and discriminatory pricing is good for society. These people cannot > be topped or stopped -- only ignored by us. -- Michael Perelman Economics Department California State University [EMAIL PROTECTED] Chico, CA 95929 530-898-5321 fax 530-898-5901
Re: RE: Re: : RE: Lies, damned lies, and economics
Jim, I've said about all I can say -- I think our disagreement comes down to this: I think it is a mistake to give any ground, any voice at all, to neo-classical micro. If I am not misinterpreting you, you think that after beginning with neo-classical a critique can be crafted that will put students in the picture. (I didn't intend a pun there, but I kind of like it.) One last riposte: You write: NC economics allows for non-competitive results with P > MC. Of course, NC economics allows for ANYTHING. Every time a hole in logic or absurd assumption is raised, the reply is "Well, yes, but ... " and then a new wrinkle is trotted out to preserve the story/propaganda for another generation. DeLong is doing a new wrinkle now (new to him, apparently) with the discovery that monopoly and discriminatory pricing is good for society. These people cannot be topped or stopped -- only ignored by us. Gene Coyle "Devine, James" wrote: > Jim asked how I would teach, instead of neo-classical micro. > > I've asserted that neo-classical is a story. A story, propaganda, > designed and intended to subjagate. right, though I don't think it was "designed" as much as happened: a bunch of folks really like the calculus and other math and the powers that be were willing to pay them to call it "economics." Much of economics is totally useless to those in power -- even as propaganda, BTW. Is Debreu's THEORY OF VALUE propaganda, or is it intellectual masturbation, the leisure of the theory class? BTW, I'm sure that there are other versions of economics that could be used to subjugate. Is neo-Ricardian or Sraffian economics automatically progressive? A lot of institutionalists and Post Keynesians are very conservative. Etc. > Well, I would tell a different story. The neoclassical story is that firms maximize profits, fight competition by cutting prices, and so you find prices driven down to the MC of the most efficient producer. A wonderful result for consumers.< NC economics allows for non-competitive results with P > MC. Further, and more importantly, intelligent NCs know that the private MC need not equal the social MC, due to externalities. So we might have P = MC as a bad thing. Of course, textbook economics downplays this. But it's there. > Of course that story isn't plausible, even to a lowly freshman. So here's a better one: Firms try to maximize their share price, which means behaving as they think will do that, not competing on price, cooperating and/or colluding with other firms to share markets and keep prices high. This can be taught out of standard Finance texts -- dynamic, rather than static like neo-classical. This story IS plausible to freshmen. And to the Rotary Club, etc. And so the story can talk about exploitation of workers, screwing of consumers, dumping pollution into the air and water.< I doubt that focusing on wealth maximization changes much. Further, the standard NC story can deal with the last, not to mention collusion. What it misses is the way there's an incentive for businesses to actively seek out ways to externalize internal costs (and internalize external benefits). It misses the dynamic, in which the firm is an active agent (an accumulator) rather than a passive recipient of price signals... > The neo-classical story re consumers is similarly implausible to any adult. The story is the one ridiculed by Veblen 100 years ago -- that we are bits of quivering protoplasm reacting to prices and making decisions independent of what everybody else is buying. OF COURSE we are influenced by other people. OF COURSE we learn to like products, develop habits, not to say addictions. We DON"T go up and down a demand curve depending on the price. Either of these changes in the story smash neo-classical micro.< I agree that NC consumer theory is either tautologically true or wrong. However, empirical evidence suggests that in general, if the price of a good goes up, a smaller quantity will be demanded. I've seen the utility-max parable as a third rate effort to explain that empirical fact. We should face the fact that supply & demand do a pretty good job of explaining empirical reality (in a very limited sphere). Even where the assumptions (such as perfect competition) don't apply, S&D work: if the demand for a monopolist's good rises, so will price; if the cost of producing it rises, so will price. Etc. The classical economists -- including Marx -- didn't reject supply & demand. Rather, they saw S&D as a small piece of a large system (as with Marx, who saw S&D leading to the redistribution of value amongst capitals). NC economists take the fact that S&D does pretty well and use it to cover up a lot of the other crap that they purvey: they use it to imply that they're scientists or (if they're Chicago-schoolers) that markets are perfect, etc. > I would tell a different story. It is where we are influenced by others, influenced by advertising, not independent at all.
Re: Re: Re: RE: Lies, damned lies, and economics
Robert, Thanks for being so gracious in your reply to my not so gracious post. And, yes, do send me your article -- off list probably is better -- by reducing the volume for others. The framework for keeping track of assumptions sounds useful. There was a good 10 page summary of the Cambridge controversy -- in mimeo, on legal size paper. I have a copy in a box somewhere but don't know where. As I recall it was anonymous. But for a printed version you might look for something Harcourt wrote at the time -- late '60s, early '70s. Gene Coyle Robert Scott Gassler wrote: > At 16:44 23/05/02 -0700, Eugene Coyle wrote: > >Robert, I haven't read your article but will make an effort to find it. > > A better article might be the one I did for the Pennsylvania Economic > Association, which I can send you via attachment: > > "Political and Social Economics: A Framework and Some Examples," > Proceedings of the Pennsylvania Economic Association 2001 Conference, > Lycoming College, Williamsport, Pennsylvania, May 31-June 1, 2001. > > > > >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. > > I know what you mean. > > > >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. > > > I've been looking for an alternative story and have not found one. Though I > can tell a story about the labor theory of value and another one about how > Lenin was right about imperialism, I do not know enough about Marxism to be > a Marxist. Insitutionalism does not seem to have a story that I can tell > easily. > > >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) > > > My article enumerates these and other assumptions and puts them in a simple > framework to keep track of them. > > >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." > > > I have it beside me. It looks similar to Debreu's Theory of Value, > Koopman's Three Essays on the State of Economic Science, and Arrow and > Hahn's General Competitive Analysis. Makes the assumptions, relaxes a few > of the easy ones, stresses the math. I don't do that. > > >Another
RE: Re: : RE: Lies, damned lies, and economics
> Jim asked how I would teach, instead of neo-classical micro. > > I've asserted that neo-classical is a story. A story, propaganda, > designed and intended to subjagate. right, though I don't think it was "designed" as much as happened: a bunch of folks really like the calculus and other math and the powers that be were willing to pay them to call it "economics." Much of economics is totally useless to those in power -- even as propaganda, BTW. Is Debreu's THEORY OF VALUE propaganda, or is it intellectual masturbation, the leisure of the theory class? BTW, I'm sure that there are other versions of economics that could be used to subjugate. Is neo-Ricardian or Sraffian economics automatically progressive? A lot of institutionalists and Post Keynesians are very conservative. Etc. > Well, I would tell a different story. The neoclassical story is that firms maximize profits, fight competition by cutting prices, and so you find prices driven down to the MC of the most efficient producer. A wonderful result for consumers.< NC economics allows for non-competitive results with P > MC. Further, and more importantly, intelligent NCs know that the private MC need not equal the social MC, due to externalities. So we might have P = MC as a bad thing. Of course, textbook economics downplays this. But it's there. > Of course that story isn't plausible, even to a lowly freshman. So here's a better one: Firms try to maximize their share price, which means behaving as they think will do that, not competing on price, cooperating and/or colluding with other firms to share markets and keep prices high. This can be taught out of standard Finance texts -- dynamic, rather than static like neo-classical. This story IS plausible to freshmen. And to the Rotary Club, etc. And so the story can talk about exploitation of workers, screwing of consumers, dumping pollution into the air and water.< I doubt that focusing on wealth maximization changes much. Further, the standard NC story can deal with the last, not to mention collusion. What it misses is the way there's an incentive for businesses to actively seek out ways to externalize internal costs (and internalize external benefits). It misses the dynamic, in which the firm is an active agent (an accumulator) rather than a passive recipient of price signals... > The neo-classical story re consumers is similarly implausible to any adult. The story is the one ridiculed by Veblen 100 years ago -- that we are bits of quivering protoplasm reacting to prices and making decisions independent of what everybody else is buying. OF COURSE we are influenced by other people. OF COURSE we learn to like products, develop habits, not to say addictions. We DON"T go up and down a demand curve depending on the price. Either of these changes in the story smash neo-classical micro.< I agree that NC consumer theory is either tautologically true or wrong. However, empirical evidence suggests that in general, if the price of a good goes up, a smaller quantity will be demanded. I've seen the utility-max parable as a third rate effort to explain that empirical fact. We should face the fact that supply & demand do a pretty good job of explaining empirical reality (in a very limited sphere). Even where the assumptions (such as perfect competition) don't apply, S&D work: if the demand for a monopolist's good rises, so will price; if the cost of producing it rises, so will price. Etc. The classical economists -- including Marx -- didn't reject supply & demand. Rather, they saw S&D as a small piece of a large system (as with Marx, who saw S&D leading to the redistribution of value amongst capitals). NC economists take the fact that S&D does pretty well and use it to cover up a lot of the other crap that they purvey: they use it to imply that they're scientists or (if they're Chicago-schoolers) that markets are perfect, etc. > I would tell a different story. It is where we are influenced by others, influenced by advertising, not independent at all. I would use something like Marris' chapter on Demand as a background for myself, and flesh this out for the course. This story would be plausible to students.< Economists outside of Chicago are willing to accept a limited amount of endogenous determination of tastes. They just don't see it as something that can be pinned down to a simple theory and so tell people to study psychology and sociology if they want to understand it. They also point to the phenomenon of one company's advertising being cancelled out by another's. > I have to confess that when I did Micro this way it severely upset the Department and the College and I no longer am in academia. When I was job hunting I was asked "Can you teach Henderson & Quandt?" -- a then high level mathematical micro text. I would reply "I can" not saying aloud the rest of the sentence "but I won't."< Yeah, higher level micro (back then, H&Q) gets involved with math ub
Re: Re: RE: Lies, damned lies, and economics
At 16:44 23/05/02 -0700, Eugene Coyle wrote: >Robert, I haven't read your article but will make an effort to find it. A better article might be the one I did for the Pennsylvania Economic Association, which I can send you via attachment: "Political and Social Economics: A Framework and Some Examples," Proceedings of the Pennsylvania Economic Association 2001 Conference, Lycoming College, Williamsport, Pennsylvania, May 31-June 1, 2001. > >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. I know what you mean. > >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. > I've been looking for an alternative story and have not found one. Though I can tell a story about the labor theory of value and another one about how Lenin was right about imperialism, I do not know enough about Marxism to be a Marxist. Insitutionalism does not seem to have a story that I can tell easily. >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) > My article enumerates these and other assumptions and puts them in a simple framework to keep track of them. >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." > I have it beside me. It looks similar to Debreu's Theory of Value, Koopman's Three Essays on the State of Economic Science, and Arrow and Hahn's General Competitive Analysis. Makes the assumptions, relaxes a few of the easy ones, stresses the math. I don't do that. >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 it's cool. Do you know of a 10p summary I could assign in class? >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. > Agreed. That's why I stopped reading critiques of neoclassical 25 years ago. Besides, they usually don't say anything that the neoclassical economists themselves don't say better. The neoclassicals (at least outside Chicago) know the limits of their theories; they just use them anyway. >In the April HARPER'S magazi
Re: RE: Lies, damned lies, and economics
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
Re: : RE: Lies, damned lies, and economics
Jim asked how I would teach, instead of neo-classical micro. I've asserted that neo-classical is a story. A story, propaganda, designed and intended to subjagate. Well, I would tell a different story. The neoclassical story is that firms maximize profits, fight competition by cutting prices, and so you find prices driven down to the MC of the most efficient producer. A wonderful result for consumers. Of course that story isn't plausible, even to a lowly freshman. So here's a better one: Firms try to maximize their share price, which means behaving as they think will do that, not competing on price, cooperating and/or colluding with other firms to share markets and keep prices high. This can be taught out of standard Finance texts -- dynamic, rather than static like neo-classical. This story IS plausible to freshmen. And to the Rotary Club, etc. And so the story can talk about exploitation of workers, screwing of consumers, dumping pollution into the air and water. The neo-classical story re consumers is similarly implausible to any adult. The story is the one ridiculed by Veblen 100 years ago -- that we are bits of quivering protoplasm reacting to prices and making decisions independent of what everybody else is buying. OF COURSE we are influenced by other people. OF COURSE we learn to like products, develop habits, not to say addictions. We DON"T go up and down a demand curve depending on the price. Either of these changes in the story smash neo-classical micro. I would tell a different story. It is where we are influenced by others, influenced by advertising, not independent at all. I would use something like Marris' chapter on Demand as a background for myself, and flesh this out for the course. This story would be plausible to students. I have to confess that when I did Micro this way it severely upset the Department and the College and I no longer am in academia. When I was job hunting I was asked "Can you teach Henderson & Quandt?" -- a then high level mathematical micro text. I would reply "I can" not saying aloud the rest of the sentence "but I won't." Ah, well, at least I can tell you how to teach. Gene "Devine, James" wrote: > >And how are you (me, us) going to get an alternative theory if we keep > honoring neoclassical models? < > > so what's your alternative? > JD
RE: Re: : RE: Lies, damned lies, and economics
>And how are you (me, us) going to get an alternative theory if we keep honoring neoclassical models? < so what's your alternative? JD
Re: RE: Lies, damned lies, and economics
- Original Message - From: "Sabri Oncu" <[EMAIL PROTECTED]> > Ian wrote: > > > Second to last sentence: just think of the three > > body problem of celestial mechanics. > > I thought about it very hard to no avail. What is this three body > problem of celestial mechanics? Who is Perelman? > > Sabri > === http://www.sns.ias.edu/~piet/act/astro/three/ http://www.dynamical-systems.org/threebody/ [fun] and an attempt at it's solution: http://www.ams.org/notices/200105/fea-montgomery.pdf
Re: RE: Lies, damned lies, and economics
You should know that Perelman wrote all the Marx brothers scripts. On Wed, May 22, 2002 at 03:39:11PM -0700, Sabri Oncu wrote: > Who is Perelman? > > Sabri > -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
Re: : RE: Lies, damned lies, and economics
Jim, Two rejoinders. You say "If given a choice..." Aren't you given a choice? If not, what does that say? And you say, to slice out one sentence, That doesn't work in teaching, so I simply use a cleaned-up version of the neoclassical models, with a minimum emphasis on the imaginary perfect competition model. That's my point. I argue that using a "cleaned up version of the neoclassical models" is a profound mistake. You are just on the treadmill that way. And how are you (me, us) going to get an alternative theory if we keep honoring neoclassical models? Worse, the students will learn that stuff and the better ones will quit economics while the worse will get tenure at Stanford and Harvard. Gene "Devine, James" wrote: Eugene writes: > I think your answer points up how serious the problem is. > Sounds like you (me, everybody) don't have a framework. > > I draw the inference from your post -- apologies if this > is incorrect -- that you are saying, "Well, you don't have a framework to > start with, so we should start with the neo-classical framework and point out > the problems." No. I was just wondering. In my experience, only an alternative theory can beat a theory. If given a choice, I would start with a Marxian (not a neoclassical) theory, trying to make it as concrete as possible, as with the old Bowles & Edwards UNDERSTANDING CAPITALISM textbook. That doesn't work in teaching, so I simply use a cleaned-up version of the neoclassical models, with a minimum emphasis on the imaginary perfect competition model. I am looking forward to using the Microeconomics In Context book as soon as it is available... > ... Let a thousand parables bloom. We will be off the > treadmill and on an actual path going somewhere. right: we need lots of parables --- or rather paradigms. But we need to have a clear alternative to the hegemonic one (orthodox or neoclassical economics). We can't just describe the world. We might start with an alternative to the Heyne list of the "economic way of thinking" (opportunity cost, etc.) as being the key things that students should keep in mind all through the semester or year. JD
RE: Re: RE: Re: RE: Lies, damned lies, and economics
Eugene writes: > I think your answer points up how serious the problem is. > Sounds like you (me, everybody) don't have a framework. > > I draw the inference from your post -- apologies if this > is incorrect -- that you are saying, "Well, you don't have a framework to > start with, so we should start with the neo-classical framework and point out > the problems." No. I was just wondering. In my experience, only an alternative theory can beat a theory. If given a choice, I would start with a Marxian (not a neoclassical) theory, trying to make it as concrete as possible, as with the old Bowles & Edwards UNDERSTANDING CAPITALISM textbook. That doesn't work in teaching, so I simply use a cleaned-up version of the neoclassical models, with a minimum emphasis on the imaginary perfect competition model. I am looking forward to using the Microeconomics In Context book as soon as it is available... > ... Let a thousand parables bloom. We will be off the > treadmill and on an actual path going somewhere. right: we need lots of parables --- or rather paradigms. But we need to have a clear alternative to the hegemonic one (orthodox or neoclassical economics). We can't just describe the world. We might start with an alternative to the Heyne list of the "economic way of thinking" (opportunity cost, etc.) as being the key things that students should keep in mind all through the semester or year. JD
Re: RE: Re: RE: Lies, damned lies, and economics
"Devine, James" wrote: > Eugene Coyle writes: > > The problem is much worse than lying economists. Economists believe what > they say.< > > right. > > >Would a biology or other science teacher start with teaching Creationism > and then critiquing it around the edges by pointing out some counter > evidence? It seems to me that anyone teaching micro is doing that --- > starting with perfect competition in all it glory and then mentioning an > assumption or two that can be critiqued. > > >The whole has to be rejected, there is no gain in debating bits with > economists.< > > so what framework would you start with? > > Jim Jim, I think your answer points up how serious the problem is. Sounds like you (me, everybody) don't have a framework. I draw the inference from your post -- apologies if this is incorrect -- that you are saying, "Well, you don't have a framework to start with, so we should start with the neo-classical framework and point out the problems." That keeps us on the treadmill to nowhere. We could keep doing that forever -- and we've been doing it for decades already -- and never finding a "framework." The old joke has been repeated so often that I hate to do it once more. But what is going on in current micro classes is like the drunk searching for his lost keys under a lamppost. When asked where he'd dropped them the reply was "About half a block away. But the light is better over here." Paul Samuelson, when Joan Robinson and others finally nailed him, said his micro was only a parable, but he thought it was a good one. If all micro is is a parable, i. e. a story to explain to students what the world is like, why not tell your own parable? Telling stories about what one sees in the economy helps one understand what is before your eyes. And your students will test your story, refine your story, and after a while there will be some useful stories. What have now is economists telling stories that serve capitalism, to the great harm of people and the environment. To the extent that WE don't stop them we are complicit. Let a thousand parables bloom. We will be off the treadmill and on an actual path going somewhere. Gene Coyle
RE: Re: RE: Lies, damned lies, and economics
Eugene Coyle writes: > The problem is much worse than lying economists. Economists believe what they say.< right. >Would a biology or other science teacher start with teaching Creationism and then critiquing it around the edges by pointing out some counter evidence? It seems to me that anyone teaching micro is doing that --- starting with perfect competition in all it glory and then mentioning an assumption or two that can be critiqued. >The whole has to be rejected, there is no gain in debating bits with economists.< so what framework would you start with? Jim
Re: RE: Lies, damned lies, and economics
The problem is much worse than lying economists. Economists believe what they say. Would a biology or other science teacher start with teaching Creationism and then critiquing it around the edges by pointing out some counter evidence? It seems to me that anyone teaching micro is doing that --- starting with perfect competition in all it glory and then mentioning an assumption or two that can be critiqued. The whole has to be rejected, there is no gain in debating bits with economists. Gene Sabri Oncu wrote: > > What does it mean to say that economists deliberately > > *lie* in a world where the relation of theories and evidences > > is one/many of underdetermination? > > > > Ian > > In my understanding underdetermination is associated with the > observation that the system always finds a solution. To put this > in mathematical terms, there are more variables than equations. > If only we know what exactly these equations and variables are. > > There may be some liar economists but if one equates all > economics to lies, one includes all economists in the set of > liars. > > My conclusion from this is that it is not a good idea to equate > economics to lies on a list of mostly economists, however > progressive they may be. > > Best, > Sabri
Re: RE: Lies, damned lies, and economics
From: "Sabri Oncu" <[EMAIL PROTECTED]> > > What does it mean to say that economists deliberately > > *lie* in a world where the relation of theories and evidences > > is one/many of underdetermination? > > > > Ian > > In my understanding underdetermination is associated with the > observation that the system always finds a solution. To put this > in mathematical terms, there are more variables than equations. > If only we know what exactly these equations and variables are. == Last sentence; we can't. Second to last sentence: just think of the three body problem of celestial mechanics. First sentence; the *solutions* are always within the framing of the question[s] we pose. Nature is neither question or anwser. > > There may be some liar economists but if one equates all > economics to lies, one includes all economists in the set of > liars. == Precisely what is not 'fair' to economists or economics or political economy or.. > My conclusion from this is that it is not a good idea to equate > economics to lies on a list of mostly economists, however > progressive they may be. > > Best, > Sabri == The epistemic struggle with ignorance and interest[s]. Ian
Re: Re: RE: RE: Lies, damned lies, and economics
- Original Message - From: "michael perelman" <[EMAIL PROTECTED]> To: <[EMAIL PROTECTED]> Sent: Tuesday, May 21, 2002 8:20 PM Subject: [PEN-L:26168] Re: RE: RE: Lies, damned lies, and economics > I might have added Phil Mirowski as an excellent writer, although he does > not usually write for an popular audience. > > -- === What does it mean to say that economists deliberately *lie* in a world where the relation of theories and evidences is one/many of underdetermination? Ian
Re: RE: RE: Lies, damned lies, and economics
I might have added Phil Mirowski as an excellent writer, although he does not usually write for an popular audience. -- Michael Perelman Economics Department California State University Chico, CA 95929 Tel. 530-898-5321 E-Mail [EMAIL PROTECTED]
RE: RE: Lies, damned lies, and economics
I admire both Galbraith and Heilbroner, but it always seemed clear to me that Heilbroner (save maybe his New Yorker articles or whatever) was writing at a more complex, deeper level (even in NYRB--articles on Schumpeter, Keynes, etc.). One may differ with, e.g., his interpretation of dialectics in Marxism: For and Against (about which he has always remarked that the most important word in the title was "and"), but I don't think you can say that it is 'watered down'. While it is true that Heilbroner is trying to communicate with an audience beyond professional economists or university professors, I think he does challenge the reader to put some thought into his arguments. Recently, Heilbroner has said that he thinks of himself as in the field of education, not economics, and that his favorite work of his own is his Visions of the Future, which is not really about economics, but looks at how perceptions of the future have changed through history, and how those perceptions affect the present. Mat
