Fw: Say's Law and Operationalism - Tobin Addendum

["Gunnar Tomasson" <tomasson@xxxxxxxx>]

----- Original Message -----
From: Gunnar Tomasson <tomasson@xxxxxxxx>
To: Alan G. Isaac <aisaac@xxxxxxxxxxxx>
Sent: Wednesday, May 10, 2000 1:15 AM
Subject: Re: Say's Law and Operationalism - Tobin Addendum


> Alan:
>
> Let me make three points.
>
> First.  If real-world market economies are "[general equilibrium] systems
in
> "stable" equilibrium or motion" in the Newtonian-Laplacian-Walrasian sense
> thereof, then NO "operationally meaningful theorem" can ever be formulated
> with respect thereto.
>
> In Newton's case, David Hume summarized his conclusions in this respect as
> follows: "While Newton seemed to draw off the veil from some of the
> mysteries of nature, he shewed at the same time the imperfections of the
> mechanical philosophy; and thereby restored her ultimate secrets to that
> obscurity in which they ever did and ever will remain."
>
> As it happens, Samuelson cited Newton's application of the differential
> calculus to the task of specifying the moon's orbital path with respect to
> earth as warrant of his own application thereof to real-world economies
> viewed as general equilibrium systems.
>
> If Samuelson had read - and shared Hume's understanding of - Newton's
> introductory remarks in Principia, he would have known better than to
invoke
> Newton's modus operandi.  For at the end of Definition VIII at the very
> outset of Principia, Newton explicitly cautioned that his mathematics
> reduced to mere FORMALISM as follows:
>
> "I likewise call attractions and impulses, in the same sense, accelerative
> and motive; and use the words attraction, impulse, or propensity of any
sort
> towards a centre, promiscuously, and indifferently, one for another;
> considering those forces not physically, but mathematically: wherefore the
> reader is not to imagine that by those words I anywhere take upon me to
> define the kind, or the manner of any action, the causes or the physical
> reason thereof, or that I attribute FORCES, in a true and PHYSICAL sense,
to
> certain centres (which are only MATHEMATICAL points); when at any time I
> happen to speak of centres as attracting, or as endued with attractive
> powers."
>
> Second.  In the passage below, Samuelson apparently addresses - and
> dismisses, in the elliptical style which he routinely applied to such
> issues - the epistemological considerations that informed Newton's
> cautionary remarks and Hume's construction of Newton's modus operandi:
>
> "The concept of an equilibrium system outlined above is applicable to the
> case of a single variable [by which I understand him to mean, e.g., a
> "vanishingly small deviation" from its equilibrium path of a single
material
> point in a Newtonian universal gravitational system - GT] as to so-called
> general equilibrium involving thousands of variables.  Logically the
> determination of output of a given firm under pure competition is
precisely
> the same as the simultaneous determination of thousands of prices and
> quantities.  IN EVERY CASE  CETERIS PARIBUS ASSUMPTIONS MUST BE MADE. The
> only difference lies in the fact that IN THE GENERAL EQUILIBRIUM ANALYSIS
> OF, let us say, WALRAS, the content of the historical discipline of
> theoretical economics is practically exhausted."
>
> Do you understand this?  I don't.
>
> However, one thing seems certain: Samuelson's work on consumer behavior,
> including "revealed preference", would fall OUTSIDE "the historical
> discipline of theoretical economics" as seen from the vantage point of the
> Newtonian-become-Walrasian general equilibrium system.
>
> Of ALL such work, not excluding his own, Samuelson advised:
>
> "In fact, any sector of economic theory which cannot be cast into the mold
> of such a [general equilibrium] system must be regarded with suspicion as
> suffering from haziness." ('Foundations', p. 9)
>
> Three.  IF, as I am persuaded, ALL of Samuelson's theoretical work falls
> OUTSIDE the mold of a general equilibrium system in the
> Newtonian-Laplacian-Walrasian sense thereof, THEN by his own lights ALL
his
> theoretical work "must be regarded with suspicion as suffering from
> haziness."
>
> Where, then, Samuelson's "greatness"?
>
> Gunnar
>
>
>
>
> ----- Original Message -----
> From: Alan G. Isaac <aisaac@xxxxxxxxxxxx>
> To: Gunnar Tomasson <tomasson@xxxxxxxx>
> Sent: Wednesday, May 10, 2000 2:21 AM
> Subject: Re: Say's Law and Operationalism - Tobin Addendum
>
>
> >
> >
> > Gunnar Tomasson wrote:
> >
> > > ALL Samuelson's work in economics is predicated on an AFFIRMATIVE
answer
> to
> > > the question whether "vanishingly small displacements" of "the
> conditions of
> > > static equilibrium" are admissible in static analysis.
> >
> >
> >
> > Gunnar,
> >
> > As one clear counterexample to this claim, I will mention
> > his early work on revealed preference.
> >
> > I simply cannot understand the animus you have against
> > Samuelson that would lead you to so misrepresent
> > and trivialize his work and the world's recognition of
> > it.  One can dislike the methods chosen by a great
> > economist and still understand why he is recognized
> > as great.
> >
> > Alan Isaac
> >
> >
>