Re: Nobel Prize Winners in Econ.

["Anthony D'Costa" <dcosta@xxxxxxxxxxxxxxxx>]

I tend to agree with Herbert Gintis that the alternatives to capitalism so
far have not been feasible for most societies.  However, I would also add that
what Gintis terms "capitalism" is much too general a system, especially
when "capitalism" is used to describe East Asian economies or even for
that matter other late industrializing countries.  The east asian
economies are capitalist by the standard features of wage labor,
production for profit/market, etc. but are they capitalist in terms of
"bourgeois rationality"?  May be and may be not.  Our recent discussion
on pen-l about South Africa showed that the state-market mix in the east
asian economies indicated a greater tilt toward the state (market
augmenting role?) and we if we include the social basis of capitalist
accumulation in some of these economies very few will conform to the
social basis of advanced capitalist societies.  So the questions are:
is it capitalism (in terms of basic processes and outcomes)?  Or if what
is purportedly viewed as capitalism is
organized on other principles (communitarian values) is it still
capitalism?

Anthony D'Costa

On Fri, 14 Oct 1994, Herbert Gintis wrote:

> Jamie writes:
> >The questions of Eric N. are intriguing. I would answer two of them
> >as follows:
> >
> >1. No. The political message from the mainstream to students is, if anything
> >even more conformist and un-critical than twenty years ago. After all,
> >discussions of market power have been fading from the teaching agenda.
>
> 	This is true, in my estimation. The reason is the collapse of
> Keynesianism and the socialist economies, the success of
> market-oriented developing countries compared with those that
> attempted socialist solutions, the decline of nationalization, and the
> collapse of social democracy in (some) Norther European countries.
>
> >2. But game theory does indeed undermine the placid world-view of the
> >textbooks-- if taught at a reasonably high level and in a consistent way. When
> >Herb says that reasonable economies may lack a core, he is (I think) referring
> >to reasonable model economies, not to real economies which of course violate
> >the presumptions of all models in various ways. It is by upsetting the
> >applecart of logical models, and not by greater realism, that game theory
> >threatens a field that is largely made up of logical constructs in virtual
> >isolation.
> >
> 	Game theory (and asymmetric information, transactions cost
> theory, moral hazard and adverse selection, etc.) have turned most
> economists from thinking of the economy in a Walrasian way to thinking
> about the economy in a Marshallian way--there are lots of little pe
> models, each of which gives some insights, but there is no overarching
> ge theory to fit it all together. There is no overarching theory of
> the profit rate, or the wage rate, or the growth rate, or the interest
> rate emanating from game-theoretic models. This is a criticism, of
> course, but it also implies that the ideology of the invisible hand no
> longer has much force. Game theoretic models in labor, industrial
> organization, finance, international trade, etc. do not imply that
> markets are Pareto-efficient, or fair, even in the limited sense that
> factor price equals marginal product.
>
> 	Economic theory no longer justifies capitalism. What justifies
> capitalism is its stunning success in the face of the stunning failure
> of all of its contenders. Stunning. IMHO.
>
> Herbert Gintis
> Department of Economics
> University of Massachusetts
> Amherst, MA 01003
> gintis@xxxxxxxxxxxxxxx
>
>
>
>