Re: Why Heterodox are subject to be losers.

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

Paul:

Re. the following:

> The moral of this story is if you let any mainstreamers into the
department --
> and especially when the Deans look to departments as profit centers to get
> grants from mainstream foundations-- the heterodox are going to be
> marginalized.
>
> Moreover, the heterodox economists refuse to get behind a single "general
> theory" and rather splinter into small cliques -- even some arguing that
some
> mainstreamers (e.g., Stiglitz) are getting close to Post Keynesians on
some
> issues -- even though a logically consistent mainstream theory fails to
> support them -- so they introduce ad hoc constraints on the pricing system
or
> nonlinear dynamics, etc-- with enough non linearities you can demonstrate
any
> result you want.
>
> Until heterodox economists unite behind a simple "general theory" they are
> going to be losers.

Comment:

It all depends on what economists mean by "theory" in the first place.

In physical science, "theory" is short-hand for prediction of future
empirical observations based on past such observations, as in the case of
Newton's "theory" of orbital motion within the Earth-Moon System.

This IS the kind of "theory" sought by Samuelson and like-minded economic
scholars, as indicated by Samuelson's statement that ergodicity is a sine
qua non for any would-be "science" in the field of real-world economic
phenomena.

By the same token, this is NOT the kind of "theory" behind which heterodox
economists might "unite", considering the self-evident fact that real-world
economies are non-ergodic.

My own view is that economic "theory" in the Newtonian sense is possible
ONLY with respect to a purely ANALYTICAL conceptualization of monetary
relations between economic agents cooperating in the production process.

And that is no small thing - for, insofar as economic scholars are concerned
with the architecture of real-world monetary systems whose primary task is
to serve the production process under conditions of near-full factor
employment and price stability, such "theory" is an essential point of
departure.

With respect to everything else, I submit that economic "theory" is common
sense applied to whatever circumstances the non-ergodicity of real-world
economies may generate at any given point in time and space.

Gunnar