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Response: That is exactly right. Summers later claimed it was his own kind of
"reductio ad absurdum/nauseum" exercise he was doing. The problem is that that
memo had been widely circulated and quoted internally--seriously--before it
was released in The Economist and further, the sterile calculations (we
economists shouldn't be raising "normative" issues) and the hubris embodied in
that Eichmann-like memo are quite consistent with other known memos--and
work--of Summers. It does indeed represent "Welfare" economics--and
libertarianism--taken reductio ad absurdum/nauseum/inhumanum.
I do a little number in my Micro classes called "Pareto Optimality at
Auschwitz" setting up some "givens" (Given that the ugly nature and
consequences of fascism represent a "Normative" issue we shouldn't discuss,
and given that inmates are not people when considering reaching the point of
not being able to make any "person" better off without necessarily making
another "person" worse off etc), and "given" that "efficiency" (technological
+ economic = production efficiency; production + consumer + exchange =
allocative efficiency) is only a technical matter (the nature and consequences
of the output , the nature and consequences of input and production functions
have no ethical or moral dimensions that can be considered from a "positive"
point of view)...
Since virtually all texts purport to show that "efficiency" is good and
enhanced "efficiency" is always better, in addition to "showing" how the inner
system-defining endogenous processes and institutions of capitalism produce
enhanced "efficiency" , maximization, optimization, "liberty", individual
utility preference expression/attainment etc...I use that as an expository
device to explore the "hypothetico-deductivism", contrived syllogisms,
tautologies and "positivist" axioms of the neoclassical paradigm. We also get
into mechanical histeresis and "endogenizing exogeneity" and the possiblity of
even specifying any "one" equilibrium position as well as the
ideological/interests-served implications of the model.
I use portions of the Eichmann Trial and Albert Speer etc and ask the class to
translate the concepts into marginal private and social opportunity cost
versus "benefits" calculations. At the end, the classes get what is not in the
book (for which they are all responsible on exams in addition to what is in
the text and readings).
I did the final technical/writing review of Dave Colander's Economics 3rd
Edition and urged Dave to include something like "Pareto Optimality at
Auschwitz" or another "Microeconomics of the Singles Bar" (maximizing output
per unit of input or minimizing input per unit of output) but Dave thought my
"marketing genius" would get the book killed--along with his career--in about
a week.
Jim Craven
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Date: Mon, 21 Dec 1998 10:00:58 -0800
From: Ken Hanly <[EMAIL PROTECTED]>
To: [EMAIL PROTECTED]
Subject: [PEN-L:1776] Re: Re: Reductio Ad/Absurdum/Nauseum/Inhumanum
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As I recall, Summers later claimed that the memo was not meant to
be taken seriously and that he wrote it "tongue-in-cheek"--foot-in-mouth
would be a better description. Perhaps some politico noting the PR
disaster created for the World Bank gave Summers a lecture on "damage
control." It doesn't really make any difference as far as I can see
because the conclusions follow from a typical welfare economics
point-of-view anyway no matter how he may have meant it.
Cheers, Ken Hanly
valis wrote:
>
> > I loved the reference to the infamous "Summers Memo" as a concentrated
> > expression/self-parody of neoclassical economics "applied" and the
resultant
> ...............................................
> > applied when they deign to descend the lofty heights of theory to actual
> > implementation through actual policies with actual and measurable results.
>
> Jim is in great form today despite, or possibly due to, his dispossession.
> I'm reminded that the first time I saw films of Auschwitz and other camps,
> despite, or possibly due to, my tender age a little voice in my head said
> (in effect) "This is just the natural end-point of the world's prevailing
> production/distribution paradigm, given enough time." Marx & Co were
> still years away; it had sufficed to observe the business of my father,
> and he was a highly enlightened employer.
> valis
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