PKT message, Re: Case solved, at last!

Re. the following:

It's no use! Gunnar's earlier assertion about "the maximizing
> attributes of Homo Economicus which underlies all of Economic Science"
> gave the game away. If you accept this silly premise about the basis
> for *all* economics, then you're justified in going back and fixing up
> the work of predecessor economists.

Comment:

In the General Theory, Keynes cited John Stuart Mill and Alfred Marshall on the subject matter of Say's Law, inter alia, as follows.

Mill: "All sellers are inevitably, and by the meaning of the word, buyers."

Marshall: "The whole of a man's income is expended in the purchase of services and of commodities."

Keynes then observed:

"It is true that it would not be easy to quote comparable passages from Marshall's later work or from Edgeworth or Professor Pigou. The doctrine is never stated to-day in this crude form. Nevertheless it [Say's Law] still underlies the whole classical theory, which would collapse without it."

Considering that "J. S. Mill, Marshall, Edgeworth, and Prof. Pigou", whom Keynes included among "the classical economists", routinely used the maximizing attributes of Homo Economicus as point of departure in their theoretical reasoning, it is self-evident that Say's Law could not possibly have served as foundation for "the whole classical theory" unless such maximizing attributes were part and parcel thereof.

Admittedly, it took hard work for Paul Samuelson to realize this:

"The existence of analogies between central features of various theories implies the existence of a general theory which underlies the particular theories and unifies them with respect to those central features. This fundamental principle of generalization by abstraction was enunciated by the eminent American mathematician E. H. Moore more than thirty years ago. It is the purpose of the pages that follow to work out its implications for theoretical and applied economics.

"An economist of very keen intuition would perhaps have suspected from the beginning that seemingly diverse fields - production economics, consumer's behavior, international trade, public finance, business cycles, income analysis - possess striking formal similarities, and that economy of effort would result from analyzing these common elements.

"I can make no claim to such initial insight. Only after laborious work in each of these fields did the realization dawn upon me that essentially the same inequalities and theorems appeared again and again, and that I was simply proving the same theorems a wasteful number of times." (Foundations of Economic Analysis, opening paragraphs.)

Of course, if one defines theoretical economics to exclude the maximizing attributes of Homo Economicus, then one is mistaking apples for oranges insofar as the point at issue is concerned.

Gunnar

----- Original Message -----

From: "Colin Danby" <danbyc@xxxxxxx>

To: "pkt" <pkt@xxxxxxxxxxxxxxxx>

Sent: Friday, December 21, 2001 7:27 PM

Subject: Re: Case solved, at last!

> Bruce: It's no use! Gunnar's earlier assertion about "the maximizing
> attributes of Homo Economicus which underlies all of Economic Science"
> gave the game away. If you accept this silly premise about the basis
> for *all* economics, then you're justified in going back and fixing up
> the work of predecessor economists. There's no way to jog Gunnar out of
>
> this tautological thinking, and I think for everyone else the issues are
>
> clear. Best, Colin
>
>