Re: Heterodoxers are crackpots

[Leonardo Vera <lvera@xxxxxxxxx>]

At 11:34 a.m. 27/08/02 -0500, you wrote:

>If you need additional axioms to cover "particular situations" then why not
>specify the ADDITIONAL specific axioms so the reader can tell whether this
>is a better representation of reality.  For example, Debreu requires the
>neutral money axiom, the gross substitution axiom and the ergodic (or
>ordering axiom) for his specific case for "descriptive relevance" of an
>efficient market system.

This could lead us to a long discussion. However, I will summarize my
position with a very specific example. Many post-Keynesians remained
content with the idea that capitalism can be managed by using anticyclical
policies. But such an impartial economic role of the state in regulating
demand can only be the product of special and passing historical
circunstances. Sooner or later captains of industry have a fundamental
reason to oppose continuous full employment that destroys the discipline of
the workers (Kalecki's analysis of political business cycles was very clear
in that respect). Neither the implicit axioms in Keynes's GT nor the
Walrasian model can represent this very simple fact of a capitalist
economy. What is missing then?...here is where we need to challenge our
frame of reference and ask whether we need or not additional axioms. To me
what is missing is the notion that markets play a disciplinary function and
that this function operates through the exercise of power. Power-holding
matters in a capitalist economy and challeges the exogenous enforcement
axiom of Walrasian economics.

>Now do you want to suggest that the generality of Debreu's general
>equilibrium is of "descriptive relevance" and if not -- why not??

Most of us know (even neoclassical economists) that the Arrow-Debreu model
achieved a rigor and a simplicity that was once its greatest appeal. Today
many doubts have been raised concerning its descripte relevance, adequacy
and coherence.

Leonardo Vera

_____________________________
Leonardo  Vera
Universidad Central de Venezuela
FACES, Escuela de Economía
Caracas, 1050
Venezuela.
Tel. 753-5281 y 0416-6272401