Re: nat'l accounting...

[Bruce McFarling <ecbm@xxxxxxxxxxxxxxxxxxx>]

On Mon, 15 Sep 1997 14:01:05 -0400 (EDT), Harry Veeder
<aa361@xxxxxxxxxxxxxxx> wrote:

>> 	Constrained utility maximising is not a 'mere mathematical
>> method'.  It is a scientific, verifiable model of certain physical
>> phenomena that was developed in the 1800's, and borrowed in the late
>> 1800's by the founders of neoclassical economics.
>
>I'm just curious, do you happen to know what physical phenomena was being
>studied.

        I only know in the academic sense that I know where I can
look to find it again.  And I'll do just that tomorrow, when I'm
closer to a research library.

>> The analogy that
>> was drawn between human behavior and the physical phenomena that the
>> model actually applies to turned out to be a false analogy.

>I don't think it is valid to claim that a particular analogy is false. It
>can be argued that particular analogy is poor or misleading or
>inappropriate. Also, the valid application of mathematical tools is not
>dependent on analogous arguments. It depends on positing a set of real
>real variables (observables) and identifying them with mathematical
>variables.

        Better, I think, to retain the term 'false analogy', and
to point out that a conclusion is not necesarily false *simply
because* it is based on a false analogy.  If utility theory, or
something similar, had been based on observables, the limitations
of the theory would have been exposed to view to anyone working
with the observables.  It is one of the greatest strengths of
the utility maximising theory that it is a hidden factor theory.
However, it may be more accurate to say that is *was* a false
analogy, since the analogy was celebrated much more at the
turn of that last century than it is at the turn of this one.

Virtually,

Bruce McFarling, Ourimbah, NSW
ecbm@xxxxxxxxxxxxxxxxxxx