Re: [OPE-L] an ad hominem response

[Anders Ekeland <anders.ekeland@xxxxxxxxx>]

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. 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@xxxxxxxxx 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.