Re: Keynes and competition

["John O'Donnell" <jackodonnell@xxxxxxxx>]

"Alan G. Isaac" wrote:
>
> On Thu, 24 May 2001, John O'Donnell wrote:
> > It is not just an error of composition, it is an obvious
> > error of definition. No matter how small the difference from
> > other things, everything that is is uniquely itself. A
> > monopoly exists for each and every item owned or otherwise
> > controlled, however trivial that monopoly may be.
>
> John,
>
> Your post appears to confuse semantic and substantive issues.  If you
> want to criticize economists, you have to understand what economists
> are talking about.  To do that, you have to *learn* their vocabulary
> and not assume that their technical terms have ordinary meaning.  For
> example, when economists contrast competition and monopoly, both terms
> are being used in a specific sense (i.e., market structure).

Narrow definitions suited to specific applications within a
discipline are, of course, a legitimate practice. The
specific example I used [i.e. -- A gallon of water in a
desert vs. in a place of plenty.] is, in fact, an example
first presented to me by an economist.

Unfortunately, while economists recognize this
circumstantial characteristic of monopoly and the associated
certainty that monopoly is not limited to large scale
control, they then ignore this certainty and proceed to
disparage the condition as one detrimental to society. All I
am doing is bringing the definition back to its essential
characteristic, namely, the essential element of economics
in that only items monopolized can have economic value. All
else is free, the true opposite state from monopoly, not the
pretended opposite of competition.

> These are open to criticism, and receive plenty from economists.  (For
> example, the effects of contestability on monopoly pricing is an old
> literature.)  Attacking textbook simplifications and pretending it
> constitutes an attack on the economics profession is popular but
> pointless sport: the profession is not monolithic and is often
> thoughtful.

Although the present instance was not an attack by me, it
was instead a correction of an attack on economists by Dr.
Bruce R. McFarling, I do often find economists particularly
derelict in their reasoning. My attacks on the economics
profession deal primarily with the their habit of finding
excuses [i.e. -- Such as hiding behind a definition
supposedly known only to the profession.] rather than
responding to specific arguments.

> Your criticism should not be that economists are wrong about the use
> of these words: these words have an established usage.  Words don't
> have essences, they have usages.  In contrast a valid criticism, which
> you seem to be trying to make, is that neoclassical economists have
> focused on the least useful concept of competition.  Competition as a
> process, as developed extensively by the Austrians (and I fold
> Schumpeter in to that crowd), is a more fruitful concept to work with
> for understanding the policy problems that interest you.

While it is true that words are not the essence of an
argument they are the method of communication. The present
state of macro economic thought that insists on relying on
monetary policy, disrespectful of the tautological certainty
that its sole utility is maintaining the value of a
currency, as a tool to provoke economic activity is an
example of the foolishness that derives from slovenly use of
terminology. To that end I suggest it is long past time for
economists to set aside their obviously flawed presumptions
and follow the advice of Thomas Paine -- "When precedents
fail to assist us, we must return to the first principles of
things for information and think, as if we were the first
men that thought." Do that and you may even find that macro
economic functions of government can be reduced to the three
I set forward in my _Three Steps to Economic Freedom_ and
all the rest of the folderol simply fades into oblivion.

--
			-- jbod

		Tax Privilege, Not People
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