Re: Neo-classical gas

[Jim Devine <jdevine@xxxxxxxxxxxxxxx>]

At 01:29 PM 6/30/00 -0700, you wrote:
> The straw breaking the proverbial camel's back was the stuff about
> methodological individualism as the fallacious root of fallacious
> econ.  Evidently some critics gloss  over the fact that macro-theory is
> not based on "adding up" the decisions of individuals.  What it is based
> on is another matter, worthy of criticism in its own right.

however, following the methodological individualist lode-star, NC
economists _tried_ to reduce macroeconomics to individual decisions.
I  don't think that the folks at the U of Chicago admit it, but they
failed. Even if they admit they failed, my feeling is that they wish they
hadn't. And for quite awhile, during the heyday of "new classical macro,"
they acted as if they had succeeded.

As I've argued before, I don't think methodological individualism _per se_
(or game theory _per se_) was the problem. The rise of m.i., new classical
macro (the "respectable" version of Lafferite "supply-side economics"),
etc. had more to do with the political tilt of society at large (Reaganism,
Thatcherism, etc.) than it did with some autonomous trend toward m.i.

Methodological individualism still rules microeconomics, BTW. I have yet to
see a microeconomics text that takes the macroeconomic environment of
microeconomic decisions into account. The persistence of involuntary
unemployment and sales-constrained product markets changes a lot of
microeconomic results. But this is ignored...

Jim Devine jdevine@xxxxxxx & http:/bellarmine.lmu.edu/~JDevine
"It takes a busload of faith to get by." -- Lou Reed.