RE: Re: Re: Re: Re: RE: Query on slavery

["Forstater, Mathew" <ForstaterM@xxxxxxxx>]

This was the problem NC faced with Becker's original theory of discrimination.
Markets should have "cleansed" the world of discrimination.  So they had to
either give up perfect competition or they had to give up the assumption that
blacks and whites were equally productive.  Some went the first route--so
imperfect competition models were developed--but Becker himself and others
decided to hold on to perfect competition and drop the assumption that blacks
and whites were equally productive. Thus, "human capital" theory.  Of course, HC
theory has never been able to completely explain wage differentials--the
"unexplained residual."  That's where the revival of culture of poverty theory
came in--the residual wasn't discrimination, it was "culture": culture as human
capital.  But as Darity and Williams and others have argued, neoclassical and
Austrian notions of competition require that entrepreneurs would find a market
opportunity in the "culture differentials" that should over the long run
eliminate these differences, assuming culture is malleable.  Why, these critics
ask, are the competitive forces that were strong enough to cleanse the market of
discrimination suddenly incapable of eliminating cultural differences that have
market value?  Either competition can eliminate both or it can eliminate
neither.  See Darity and Williams "Peddlers Forever: Culture, Competition, and
Discrimination" American Economic Review, May 1985. The authors propose
discarding neoclassical and Austrian conceptions of competition and employing a
Marxist-classical conception instead. In the latter competition and
discrimination are entirely compatible, even in the long run.


-----Original Message-----
From: Michael Perelman [mailto:michael@xxxxxxxxxxxxxxxxx]
Sent: Friday, October 20, 2000 10:51 AM
To: pen-l@xxxxxxxxxxxxxxxxxxx
>Subject: [PEN-L:3317] Re: Re: Re: Re: RE: Query on slavery


Ken, Friedman is especially clear on this.  If it weren't efficient, competition
would have eliminated it.

Your note would require that they modify their assumption to "everything that [I
like that] exists is efficient."

Ken Hanly wrote:

> I didn't realize that neo-classicals assume that what exists is efficient.
> Do you have a reference?
> If what exists is efficient then no existing system could be ineffecient.
> Therefore neo-classicals could not complain about the ineffeciency of the
> former Soviet System or any other existing system.
>
> Cheers, Ken Hanly
>
> > The basic ideological issue behind this efficiency is the neoclassical
> > assumption that what exists is efficient. Slavery existed and, so, it must
> have
> > been efficient (so say the neoclassicals). The concern of neoclassicals
> is, if
> > slavery existed and was not efficient, when then what does this say about
> > production within capitalism--it is not necessarily efficient?
> >
> >
> > Eric
> >
> >

--
Michael Perelman
Economics Department
California State University
Chico, CA 95929

Tel. 530-898-5321
E-Mail michael@xxxxxxxxxxxxxxxxx