Re: Income distribution

["Gunnar Tomasson" <gunnar.tomasson@xxxxxxxxxxx>]

Mason:

Re. the following:

> If the Theory of Economics does not furnish useful conclusions
> applicable to policy, then what does it do?  If it is an incomplete tool,
> what else is needed?

Here is my 2c's worth.

1.  The Theory of Economics is to Economic Practice what the Rules of Chess
are to actual Games of Chess - its objective is conceptual clarity with
respect to essential aspects of relations between economic agents engaged in
productive activity.

2.  And, while the Rules of Chess are the same for Fischer, Kasparov, and
Joe Six-Pack, the Theory of Economics is useful for Economic Practice only
when combined with (a) imagination, (b) intellectual integrity, and (c) an
institutional structure that is supportive of, rather than hostile towards,
the application of (a) and (b) without fear or favor.

For, as Keynes put it at the end of the General Theory, "soon or late, it is
ideas, not vested interests, which are dangerous for good or evil."

Gunnar

----- Original Message -----
From: "Mason Clark" <masonc@xxxxxxxxxxxxx>
To: <pkt@xxxxxxxxxxxxxxxx>
Sent: Saturday, August 31, 2002 1:16 AM
Subject: Re: Income distribution


>
> >
> >"The Theory of Economics does not furnish a body of settled conclusions
immediately applicable to a policy.  It is a method rather than a doctrine,
an apparatus of the mind, a technique of thinking, which helps its possessor
to draw correct conclusions."
>
> I must have read this 37 times and each time I understood it to
> say that the Theory of Economics is useless except as an exercise
> for the mind or as a tool that is incomplete -- "it helps".
>
> I would make an analogy to a slide rule: helpful if one has a theory to
> work on, but not itself a theory.
>
> If the Theory of Economics does not furnish useful conclusions
> applicable to policy, then what does it do?  If it is an incomplete tool,
> what else is needed?
>
> My readings of economics these last few years have led me perilously
> close to the conclusion that it is a "glass bead game."   Save me.
>
>     Mason
>
>