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Re: Postulates of classical economics
I
question whether any of those can in the Euclidean sense of the word axiom, be
usefully termed "axioms". As Paul rightly pointed out in a previous e-mail, an
axiom is simply accepted: a triangle has three sides.
Being
a good empiricist, I do not believe we have such axioms in the strict sense of
the usage of the term, "axiom". The best I think we do is to generate some
principles that we believe are such standardized regularities, we use them "as
if" they were axioms. At the risk of being pedantic, let me point to the famous
dictum:
Socrates is a Man
All
Men are Mortal
Therefore, Socrates is Mortal.
I
submit that the concept of "Man" (or of human) is a term that we come to know
through experience and observation, in combination with reason. That is,
following Aristotle we are able to arrive at a generally accepted definition of
"human" that encapsulates phenomenal essences that distinguish human from other
animals. We accept that a property of human (which is shared with other species
of animal) that humans are "mortal". But this is not an axiom, nor is the
definition of human an "axiom", unless we agree to call commonly accepted
definitions "axioms".
It
seems to me that science (including the social scienes) entails deduction, from
previously accepted conclusions, derived by the combination of reason and
observation as well as induction-using reason in combination with observation,
to arrive at new hypotheses and theories.
It is
not clear to me what is gained by treating economics as a form of "geometry"
when economics lays claim to knowledge of the phenomenal, rather than the
nouminal realm. Or are economists now claiming, like Plato, to have knowledge of
the "eidos" of the economy, and hence, the ability to ascend to
God?
Are we
all neo-platonists now?
At 02:29 PM 10/7/02 +0900, you
wrote:
Keynes, as is well known, rejected the second
postulate of classical economics in the sense that "the wage-goods
equivalent of the exsiting money-wage is not an accurate indication of the
marginal disutility of labor"(GT, p. 10).
However, he attacked neither
concept of production function nor utility function. He didn't attack the
maximaization and optimization at all. And he didn't explicitly insist that
we can't draw the same labor supply curve as the classical economists do.
There is an obvious contrast, compared to his insist that we can't draw
saving curve as the function of interest rate as the classical economists do
(See chap. 14).
The possible interpretation is that of Clower. Clower, as
is well known, regarded his rejection of second postulate as the criticisim
against the classical economics that it doesn't provide an adequate account
disequilibrium phenomenon, and insisted that Keynes didn't reject the
generality of classical economics (See "The Keynesian counter-revolution: A
theoretical appraisal"). And Clower opened the route toward the studies
toward the microfoundation of Keynesian economics.
However, such a
lot of post-Keynesian as the member of this mailing list wouldn't be
satisfied by Clower's interpretation due to various reasons. So what is the
critical point when Keynes attacked the classical
economics?
IF YOU DON'T KNOW, YOU HAVEN'T READ
EITHER MY ARTICLE "REVISING THE KEYNESIAN REVOLUTION" OR MY BOOK POST
KEYNESIAN MACROECONOMIC THEORY.
Keynes specifically rejected three
classical restrictive axioms -- although he did not know the names of two of
the axioms -- since they had not yet been named.
The three axioms
were:
(1) the ergodic axiom in stochastic models (or the ordering axiom
in deterministic models) --rejected by Keynes's concept of uncertainty.
(2)
the gross substitution axiom -- rejected by chapter 17 of the GT
(3) the
neutrality of money axiom.
Paul
Paul Davidson
Editor, JOURNAL OF POST KEYNESIAN ECONOMICS
Economics Department - University of Tennessee
503 SMC
Knoxville, Tennessee 37996-0550
work phone: (865) 974-4221
fax: (865) 974-4601/ (865) 974-1686
home phone and fax (865) 692-0802
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