From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Mon Apr 17 2006 - 23:15:42 EDT
>Isn't it also a huge discussion precisely what kind of logic we are >talking about, especially in economics? Where the mainstream >neo-classical "logic" is static equilibrium, and everything else is >regarded as "verbal" (ad hominem)? > >The same static logic of Sraffa and Bortkiewicz also has fundamental >effects on what is regarded as logical, consistent, cf. the >discussion about the transformation problem. > >If you then go to dynamic systems, cybernetics, chaos theory, this >logic (these mathematical tools) is much less restrictive regarding >what is regarded as "logical". Quite other "stories" can be told >using this kind of "logic". > >My answer to Mike L. would be that is not a mere question of >integrating some divine "logic" with "verbal persuasion". We need to >discuss what kind of logic is at the basis of economics. No argument >is convincing if it is not logical. > >Concretely what we need more than ever is to continue the fight >against the static equilibrium logic in economics. IMHO no argument, >no theoretical result, that builds on static equilibrium should be >accepted unless stability is proven, i.e. what happens if we are not >in equilibrium. I think we should also ask why within Marx's own theory simple reproduction is not an equilibrium situation or a very unstable condition. It also does not seem to me that Marx would have thought it possible for capital to remain in a situation of stable Keynesian unemployment equilibrium or a Sweezy-ian permanent stagnation. Rakesh >This is a task that the Arrow-Debreu school still >faces, their Achilles heel indeed, not "logic" on their chosen terrain. > >Because capitalism is never in static equilibrium, the same forces >that drives towards equalization of profits also creates vastly >different profit rates - endlessly. Just to mention one aspect of >this faulty "logic". > >Before radical economist call "perfect competition" by its right >name, that is "perfect stagnation" - this fight is not over. There is >not an iota of competition in "perfect competition" - only utter >stagnation. From a welfare maximizing point of view "perfect >competition" is definitely not a place we want to be. > >To me dynamic systems - and computers that can solve complex equation >systems numerically - makes it possible to formulate many "verbal" - >"ad hominem" arguments in mathematical, i.e. "logical" terms. This >makes it possible to express common sense economic reasoning - which >is always dynamic, non-linear, having a lot of interaction >(feed-back) among the various processes it describes. > >Most people - even some radical economists - do not realize how >utterly static "perfect competition" is. They no not realize that >there is no theory on how we get there and stay there, given the >improbable case that we should happen have such perverse utility >functions as to wanting to to be in such a dismal state. > >Regards >Anders Ekeland > > > >At 21:26 16.04.2006, glevy@PRATT.EDU wrote: >> > Back to my not-so-whimsical question--- do we need more >>> abstract theory or more attempts at persuading and developing a new >>> common sense these days? >> >>Hi Mike L, >> >>It shouldn't be an 'either - or' type of question. The question should >>be how the two can best be integrated. Easily said, of course, .... >> >>In solidarity, Jerry >> >>PS: beware cherries that are picked from a poisoned field.
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