Re: -Reply: What is Economics?

[GREG RANSOM <GRANSOM@xxxxxxxxxxxxxx>]

Economics has from its origins been concerned with how an extended order of
human interaction comes into existence through a process of variation,
winnowing and sifting far suppassing our vision or or capacity of design ..
Modern economics explains how an extended order can come into being, and
how it itself constitutes an information-gathering process, able to call up,
and to put to use, widely dispersed information that no central planning
agency, let along any individual, could know as a whoel, possess or control.
The density of occupations of the world was made possible by trade.  A
cahin reaction began:  the greater the density of population, leading to
discovery of opportunities for specialisation, or division of labor, led to
yet futher increases of population and per capita income that made possible
another increase in the population.  And so on .. in the evolution of the
structure of human activities profitability works as a signal that guides
selection towards wat makes man more fruitful; only what is more profitable
will, as a rule, nourish more people, for it sacrifices less than it adds ..
the adaptation of the larger whole to facts yet to be discovered requires
that 'success is based on results, not on motivation (Alchian).  In any
Any extended system of cooperation must adapt itself constantly to changes
in its natural environment .. the demand that only changes with just effect
should occur is ridiculous.  It is nearly as ridiculous as the belief that
deliberate organixation of response to such changes can be just.  Mankind
could neither have reached nor could now maintain its present numbers with-
out an inequality that is neither determined by, nor reconcilable with, any
deliberate moral judgments.  Thus use of the term 'social' becomes virtually
equivalent to the call fro 'distributive justice'.  This is, however, ir-
reconcilable with a competitive market order, and with growth or even main-
tenance of population and of wealth. Thus people have come, through such
erros, to call 'social' what is the main obstacle to the very maintenance
of 'society'.  'Social' should really be called 'anti-social'.

-- guess who?

Different views of the theory of capital and profit seem to lead to different
views of wealth creation and the task of economics.  Add a Mengerian view
of capital and profit to A. Smith and you get a model which is concerned with
human survival.  Add a Ricardo view of capital and profit to A. Smith and
you get a model which is concerned with the justice of distributive shares.

What is interesting is that these difference between Menger and Ricardo are
fundamentally 'methodological' -- Menger leads to a disaggregated vision of
the structure of capital and of profit making which takes place in real time,
while Ricardo leads to an aggregated vision of capital and profit making that
is fundamentally static.  Takes place in real time = the forward vision of
individual learners and economizers.  Static = the backward vision of theorists
in their study.

Greg Ransom
UC-Riverside