Circling your Wagons Jan 26, 94 10:37:36 am

[HERBERT GINTIS <gintis@xxxxxxxxxxxxxxx>]

Ric Holt writes:

>...Solow has definitely thrown down the gauntlet here. But he does raise
>some important issues which post keynesians need to deal with. Have post
>keynesians come up with a clear coherent positive theory that provides
>an alternative to neoclassical thought? This is an issue we need to discuss.

	IMHO economics is sufficiently in flux that it is not
worthwhile trying to identify a 'mainstream' and posing one's own
perspectives as a 'coherent positive...alternative.' There are
certainly 'old fashioned' and 'new fangled' views, and it is important
that some people develop the latter. I get the feeling that the
formation of collective enterprises like pke are more sociological
than academic: There is a group of mainstream 'hot shots' who control
the journals, and then there are others who are 'out of the loop' and
try to forge bonds that allow them to operate effectively in the
profession. The outsiders produce some good work, but they tend to
spend a lot of time constructing and repairing their circle of wagons,
and don't get very far. The insiders, of course, are often arrogant and
excessively self-preening. But the upshot is not good economics.

	I don't think pke is very different from mainstream in any
significant way, except when it maintains the things that Solow
objects to, mainly the (pseudo)philosophical critique of the theory of
risk and uncertainty. I am perfectly certain that the traditional
theory of risk and uncertaintly is perfectly on-target, and critiques
are just silly and misguided. The non-ergodicity critique is correct
is some areas (e.g., investment theory), but there is nothing
non-mainstream about this.

	Another sociological observations: pke'ers like to talk a lot
about differences among theories rather than producing new insights
(there haven't been any really new pke insights in many years, IMHO,
although I think some of Peter Skott's modeling is interesting and
provocative), and they have distain for econometric evidence--people
spin crisis theory without any evidence of crises, etc.

	Please don't flame me. I write provocatively in the spirit of
advancing economic theory (which I consider a common enterprise, not
one susceptible of small-group-formation.

Regards,

Herbert Gintis
Department of Economics
University of Massachusetts
Amherst, MA 01003
gintis@xxxxxxxxxxxxxxx