Re: War of Paradigms

[Herbert Gintis <gintis@xxxxxxxxxxxxxxx>]

Jim Devine writes:
>
>IMHO, this is inadequate. A long time ago, Michael Reich and I wrote
>a paper (in the REVIEW OF RADICAL POLITICAL ECONOMICS, vol 12, no. 4,
>1981) that had a lot
>of stuff that is now summarized by the phrase "principal/agent
>problem" including the notion of efficiency wages, though we did
>not use that term as it had not yet become popular.  Recently, I
>reread that article and found that to translate our article (and
>nonformal work by Marglin or Edwards) into the p/a problem is
>a major step backward. See my short piece in the papers & proceedings
>issue of the RRPE: among other things, I analyzed Herb's work with
>Sam Bowles on P/A (a.k.a. "contested exchange"). (it was vol. 25(3),
>Sept. 1993)

	You are wrong about this, Jim. It is a step forward, by a long
shot.


>Among other things,
>what the P/A problem misses is that work is collective. There are
>all sorts of "externalities" within the workplace, both positive and
>negative. This sets up a collective action problem: workers want to
>have a high ratio of wage to effort while the
>capitalist wants to prevent the production of this collective good.

	We have developed the model to make the interrelations among
workers a central part of the model. You are criticizing a first effort.


>Thus the capitalist has to do more than pay efficiency wages or
>set up bonding schemes: it is necessary to divide and rule the
>workers, encouraging the free-riders, etc.

	Of course. I was the one who wrote about this years ago!
Models aren't wrong because they're partial. Many people like marxism,
which you support, because they think it gives a totalizing picture.
But it achieves this by being extremely vague on any single point (and
of course it is wrong about many, many things, but that's a different
story). We are developing models of the economy piece by piece, and
future economists will do a lot more and a lot better than us. You
can't criticize these ideas as though they are fixed in time.

	At any rate, I'm not interested in a debate about marxism
right now, so I think I'll bow out of this discussion.

>Herb continues:
>>        I don't remember your last mail--it bit the bit bucket. Sorry.
>
>The PKT list has an archive at csf.colorado.edu econ/pkt.
>
	If Bill has something to say, he can say it--not ask me to
hunt up a reference in the archives.

Herb gintis@xxxxxxxxxxxxxxx