Re: [OPE] Asunto: US wheat market - perfectly competitive?

> But... What is the exasperation about...?
 
 
Hi Alejandro:
 
The exasperation comes from having to learn an ideal model which
doesn't correspond to the structure of any actual markets.
It's with capitalist ideology.
 
I pursue this point in other ways too: e.g. I ask them to
assume that a market (such as the pharmaceutical industry)
was perfectly competitive and ask them to explain how consumers,
workers, and the public would be affected. They are quick to think of
possible positive effects (technological change; more competition;
lower price) but aren't always so quick to consider negative effects
(e.g. arising because of the lack of any government regulation;
lower wages). The point of the exercise is to get students to think
critically about capitalist ideology, 'free martkets', etc.
 
Since perfect competition is assumed in other topics (e.g marginal
utility theory of consumer behavior including the doctrine of
consumer sovereignty), before they get to the subject of p.c. we
have already had discussions about the meaning of the assumptions of
perfect information, economic rationality, etc. and how there is no
advertising in a perfectly competitive market. In general, I think it's
a good and appropriate strategy to hold up standard theory for ridicule and
derision to students. After all, if nothing else students should
learn how to think critically about the subject and, through ridicule,
they learn to question authority. I also encourage them to question
what I say as well: i.e. I don't want to become the substitute authority;
I want them to think for themselves.
 
In solidarity, Jerry
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Received on Thu Dec 16 09:04:35 2010