Re: Sweden -- A few reactions on the N.Y. Times article

[Paul Davidson <pdavidson@xxxxxxx>]

At 04:42 PM 8/12/98 -0600, SVEN wrote:
>First of all, let me say that as I read the NYT article I got a feeling of
>hopelessness.



Per and Sven tells a tale that emits dispair in al directions.  If you
believe Per and Sven then Assar Lindbeck becomes the devil incarnate. Is
here no hope? I do not know Lindbeck personally but I know what are the
flaws in his analysis!

I think there is a way of reducing the power of today's monotheistc
mainstream economics --but only if the "heterdox" i.e., anti-mainstream
("non believers") explain why their analysis is (a) logically incompatible
with the mainstream and libertarian views -- which are based on the same
axioms-- i.e., the gross substitution axio and the ergodic axiom and
therefore people know whats best for themselves in the future and the gross
substition axiom therefore assures that the free market provides the
Panglossian solution.   Unless you are willing to sign on to an analytical
system that rejects both these hypotheses then your analysis is capable of
being corrupted to support the free market conclusions that are th logical
conclusion of the two classical axioms mentioned above.  (Therefore Barkley
once you admit that a complex or chaotic system can have fundamentalist
traders intoroduced -- you have given away the ball game.)
 and (b) explain why the classical axioms are not applicable to the real
world and the rejection of these axioms are!

Now I have been trying to tell people on the pknet that they must unite
undder the nonergodic banner -- to logically win the argument and be an
effective countervailing force for the minds of young economists -- but if
you insist that you can work with the classical axioms by introucing some
nonlinearities -- or some monopoly (capiyalist) power into the argument --
you have already lost the war!  The american Keynesians thought they could
do this with the neoclassicl ynthesis -- and that is what dooomed
Keynesianism not only in the US but in Sweden as well.

Can we get rid of the Assar Lindbeck influence.  I think so. I have written
an article entitled "Why Lindbck's Assessment of New Keynesianism is not
compatible with Keynes's Principle of Effective Deexplaining why Lindbeck's
Jan 1998 EJ article is wrong and even logically inconsistent within its own
analysis.

Paul Davidson
Holly Chair of Excellence in Political Economy
Economics Department -- 523 SMC
University of Tennessee
Knoxville, Tennesseee 37996-0550
email: Pdavidson@xxxxxxx;   phone: (423)974-4221;    fax: (423) 974-1686