58 thoughts on “Sandpit

  1. @Ernestine Gross

    I want to reply on your first comment in the “Mrs Beeton, the Voltaire of caffeine ” thread regarding to neoclassical economics is different to capitalism.

    I can understanding what you’re stating, however I believe most people that have knowledge in neoclassical economics believes that it is one of the economic theories that generates the most benefits to the capitalist and least benefits to the general public (workers, pensioners, students, unemployed etc.). Hence people including me believes that neoclassical economics is linked to capitalism because it’s theory will tend to create a society where the capitalist will hold the most power and the majority of the population will suffer depending on the state of the economy; also in the long run neoclassical economic theory will reinstate ‘slave labour’ using the argument it’s market force.

    Because of that quite a lot of people (including me) tend to link neoclassical economic theory to capitalism as although their goal ‘maybe’ different, they tend to create the same sort of economic state. For example, unemployment benefits, pensions and austudy etc. are policies which are linked to the general wellbeing of the society but are similar to socialist ideology hence the rightwing and capitalist will accuse these policies or similar sorts as socialism, even when the society is not living in a socialist society.

  2. @Tom

    Thank you for your reply. I appreciate it a lot. Your post indicates to me communication (other than exchanging insults or trying to ‘convert’ others) is possible.

    I concur with you regarding how people often associate some economic theory with some political ‘position’ or aim or both. Being a possibly hopeless optimist, I try to assist in disentangling these associations with the aim of refocusing endless debates among ‘schools of thought’ in economics to policy that is under the control of elected governments.

  3. @Ernestine Gross

    Joseph Nye talks about ‘cooptive power’ to describe the setting of the political economic agenda by the dominant culture/ideology in (in the words of Rosemary Foot), “a manner that makes actors fail to express some preferences because they seem to be too unrealistic.” I think neoclassical economics has this particular effect (and certainly think we should be aware of its possibility), and would say this is probably why Chris is so riled up about the matter.

  4. @Ernestine Gross

    I understand your motive, the use of language is quite important as noted most obviously in politics. But please do give your understandings to people as a blog debates people can choose the wrong word (happens to me lots of times).

    As to my thoughts on economic theories, any theory that ignores psychology, history, philosophy, world studies, cultural studies and environmental studies is deemed to have faults in it’s theories. But taken those in consideration would meant that it would be impossible for human intelligence whom only live for mere one hundred years to develop a ‘perfect’ theory that would fit even just ONE society. But in the recent decades, the neoclassical economic theorist not only ignore evidence, history, cultural studies and philosophy in developing their theory; they are also attempting to ‘implement’ their theories upon the rest of the world. One would be ignorant to ignore the intelligence of history, as they believe that through out thousands of years of human civilisation, only their generation is ‘smart’ enough to develop a perfect economic theory and claim to ‘conquered’ the business cycle. Nothing is more dangerous than these economist as they underestimates the difficulty and importance economic theory and go out and destory hundreds of millions of people’s lives.

  5. @Dan

    You’ll have to take up your argument with the cultural/political people who set the political-economic agenda. I am not one of them.

    “neoclassical economics” may be something different from the theoretical results known to me as being often classified as ‘neoclassical economic theory’. Incidentally, these theoretical results are very old. The macroeconomic version of this theory is, to the best of my knowledge, only taught for historical reasons. Some micro-economic results are still useful for some practical problems.

    It seems to me ‘neoclassical economics’ might have the effect you think it has because of literature outside economics. (A theory about a theory, so to speak). But all this is really outside my area.

  6. @Tom

    Ah, communication is not easy after all.

    I beg to differ regarding your point about the choice of language, particularly on blog sites. Surely if people make statements about ‘neoclassical economic theory’ then it is fair enough for the reader to assume the people know what they are talking about.

    Your second paragraph seems to contain two separable arguments.

    It seems to me the first approximately 5.5 lines contain the suggestion that the demands expressed by some people, who come from various sub-disciplines of the Humanities, on what an economic theory should be able to take into account is unrealistic. Assuming my reading of these lines is not wrong, then I agree (noting that I am not sure whether you also wish to include the natural sciences with your reference to ‘environmental studies’). Nevertheless, the link between moral philosophy and economic theory is well established and during the past 20 years or so there seems to have been quite a bit of progress in interdisciplinary research that uses the theoretical framework of game theory, a mathematical theory that has been used in economics for a long time.

    The second part of your paragraph 2 seems to be concerned with a rather strange phenomena that occurred during the past 20 to 30 years. I describe it as an anachronistic phenomena because, IMHO, the instititutional changes ignored theoretical research in economics since the 1950s. It was, so to speak, a leap forward to the past. JQ’s book on Zombie ideas contains milestones in this leap forward to the past. I have no evidence that ‘neo-classical economic theorists’ (who among them is still alive?)) are responsible for this. For example, would you regard Eugene Fama a ‘neoclassical economic theorist’? I wouldn’t. See http://en.wikipedia.org/wiki/Eugene_Fama for what other people think on this topic and see JQ’s book on Zombie ideas.

  7. @Ernestine Gross

    So, is;

    …policy that is under the control of elected governments.

    another source for economics, independent of theory and institutions?

    I would hope that any advice from ‘economists’ to governments (elected or not) is based on a theory or knowledge, that can be examined.

    If the theory is wrong – the advice could lead to a GFC.

  8. @Chris Warren

    @50, p 1. Finally you give me a few names of authors to provide a pointer to what you seem to have in mind. Surely you agree J Bates Clark and Knut Wicksell are not contemporary authors. I have to admit to knowing approximately nothing about Clark. I would not consider Knut Wicksell’s theoretical work to be dogmatic. IMHO, dogma enters the discussion when later generations (not necessarily economists) take theoretical results from almost100 years ago as prescriptive without even examining their relevancy in the light of theoretical research results published during the last half century.

    It may well be that “It always makes sense to talk about the difference between marginal productivity/costs and average production costs.” But I wouldn’t be interested in talking about these differences but rather in whether these ‘costs’ are measurable, and if so, under which conditions. Moreover, I am not convinced the old argument about marginal cost versus average cost is particularly important for the corporate form of business, given current corporate laws, industrial or labour market laws and international financial capital markets and their associates, the rating agencies.

    @7 p. 2. The word ‘theory’ has many meanings, For example: http://www.theory.com/ and http://en.wikipedia.org/wiki/Theory

    Chris, it seems to me I am not a suitable debating partner for you.

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