Re: Why Heterodox are subject to be losers.

[Bruce McFarling <Bruce.McFarling@xxxxxxxxxxxxxxxx>]

 Leigh Harkness <Leigh@xxxxxxxxxxxxxxxxxxxx> 03/10/03 10:54pm wrote:

>I would like to extent that analogy.  Keynes is a like Columbus: based on a
>theory that the earth was spherical, Columbus sailed west from Europe to
>find India.

>Keynes has started us sailing in the right direction.  Others have taken
>over.  But when they did not discover what they expected (India), they have
>thrown out the whole theory and reverted to a flat earth type theory.
...
>Keynes has started us on the right course in macro-economics.  He has given
>us a very general theory (map) that must be refined as we discover new
>information.  Also, much of his theory has been misunderstood and these
>misunderstandings (like the twin deficits theory) have been treated as flaws
>in Keynesian economics (rather than flaws in the understanding of Keynesian
>economics.)

There is a substantial terrain between the positions that Keynes "started us
sailing" in THE right or wrong direction.

The terrain includes:
- Keynes started us sailing in ONE right direction
- For destinations that can be reached by boat, Keynes started us sailing in A/THE right direction
- Keynes sailed in the right direction for one part of the journey

If Keynes succeeded in producing a General Theory of Employment etc. (bill and I have
discussed this question before, and I don't reckon either of us have moved from our
original position), then it IS a GENERAL theory of SOMETHING IN PARTICULAR.

Not a Universal Special Theory of Everything in General.

And obviously if it were not an effort to arrive at the former rather than the latter, there
wouldn't be a "pro" case to argue ... pursuing a Universal Special Theory of Everything In
General is chasing unicorns.  If you could get it as a regular job, at least you wouldn't
have to worry about working yourself out of a job.

If successful, a General Theory of something in particular demands to be taken into
account when that particular comes up.

Now, the GT may well be capable of encompassing Neoclassical macroeconomics.
I cannot see that it can encompass neoclassical microeconomics.  Neither can it
displace neoclassical microeconomics.  And those are the two alternatives, at
least as I see it ... swallow the dominant approach or shove it out of the way.

And the fact remains ... if the GT alone was an appropriate base, why hasn't more
progress been made?

If we look wider afield at innovations and technological change, we know
that most successful technological change involves recombinations of existing
technologies as much or more than relying on newly invented technologies.

Now, it is not necessarily true that ALL heterodox approaches are mutually
compatible.  However, it is essential to develop linkages, fruitful overlaps and
skills in translating in order to DETERMINE which approaches are compatible.
It may well be that there already are enough people dedicated to working on
questions that cannot be asked or cannot be usefully answered within the
mainstream approaches as long as they insist on the primacy of Marginalism.
We cannot know whether there is a critical mass already in place unless
we work to build bridges and find out where it is possible to build those
bridges, and where the effort is fruitless.

Now, I focus on areas where general systems and American institutional
approaches give some traction, and I reckon the GT strand within PK
economics is a natural fit.  But if other heterodox economists reporting
from other islands of economic theory report that the GT strand is not as
appealing, I guess I would take them at their word.

Support for pluralism in the profession (which is essential if economics is
going to get out of its intellectual logjam), and support for pluralism
in specific departments are two separate issues.  I find it far easier
to imagine institutions that would promote pluralism OF departments
than institutions that would promote pluralism IN departments.
Especially when practitioners of radically incomplete but dominant
approaches believe that economics is defined by using their approach
rather than by its problem domain.







--
Dr. Bruce R. McFarling
Lecturer in Economics & International Business
Newcastle Graduate School of Business
University of Newcastle
Callaghan NSW 2308
(02) 4921 7962 (W, voicemail)
(02) 4921 7398 (FAX)