Re: PK epistemology (was: 'Harvard rejects...')

["Edward J. McKenna" <ejmck@xxxxxxxxxxxx>]

> Hi Colin,

There is much in your post. I would like to focus on just one point, your
view that the Post Keynesian idea of money and its relationship to
uncertainty is given by a functionalist account.  I do not believe that
this is so, if by functionalist you mean, as is normally the case, that
simply stating the role (or function) of x in relation to y is sufficient
for explaining the existence of  x, given the existence of y.
	I think that the Post Keynesian argument that relates money and
uncertainty is something like the following:

1) The world is not completely structured by natural law, i.e., it is
intrinsically open
2) The intrinsic openness of the world is what accounts for the
possibility of uncertainty
3) While the world is intrinsically open, it can be given structure by
human beings for a period of time consistent with the idea of leading a
meaningful life. That is,
    human beings can create institutions that  link the present and (some
portion  of) the future in a coherent way.
4) Human beings have a need and a desire to lead a meaningful life
5) As a result, human beings will create institutions that structure the
world

Now I don't believe that the above account is functionalist.  Of course,
all the work is being done by 3 and 4, and these could be incorrect.  It
is also the case that the above argument has not accounted for the
existence of money.  Rather, it accounts for the existence of institutions
that structure the world, of which money is merely one.  What the argument
does do is to help us understand what one of the functions of money is,
rather than explaining why this particular institution (money) has come to
be.  Now it is of course true that one could attempt to go further, i.e.,
one could attempt to provide an explanation that entails the inevitability
of the creation of money in an open world.  However, I don't think that
Post Keynesians have attempted to do this.  Since Post Keynesians insist
on the importance of history, it is at least consistent with their view
that only a study of history, and of all the elements it comprises, can
account for the specific institutions (such as money) that human beings
have actually created.
Take care-Ed McKenna








I share with Ted a sense of déjà vu having tried to raise these
> questions myself before in different ways.
>
> 1. What *is* PK epistemology? How do claims of ?realism? and ?real
> world,? which I take, perhaps wrongly, to imply some kind of inductive
> knowledge-making, link to deductivism?
>
> 2. Am I mistaken in thinking that Paul D and similar theorists assume a
>  priori:
>
>    (a) a technocratic state of the kind that might be susceptible to PK
>    advice
>    (b) a clearly bounded nation-state
>    (c) a clear internal division within that state between public and
>    private sector
>    (d) a sort of Weberian-modern society with relatively disembedded
>    individuals who are very much subject to that state
>
> In other words none of these things is regarded as needing verification
>  via systematic and careful observation of the world. My own sense it
> that they are simply asserted, often with the rhetorical cover of words
>  like ?modern? or ?developed? or ?civilized? or "entrepreneurial,"
> words  which essentially mean ?those places which fit my assumptions.?
>
> *Within* the aprioristic frame above, it seems to me, ?realism? and
> inductive claims are mainly limited to the enterprise sector and
> financial markets.
>
> 3. Would I be wrong in regarding the tautology in Paul D?s work
> identified by Ted here
>
> http://csf.colorado.edu/forums/pkt/2003II/msg00081.html
>
> as an example of the more general species of tautology called
> functionalism?
>
> What is interesting is that of all the economic institutions one might
> observe and try to understand in a particular place, money is pulled
> out  by many PKers and *pre-analyzed*: money meets needs created by
> uncertainty. This is characteristic of functional reasoning in which
> the  effects of an institution (things it does) are also its causes
> (what  accounts for its existence). You can try to escape this logical
> loop via  social evolutionism, (and some of Paul?s writings do seem to
> invoke  evolutionist arguments), but that requies further assumptions.
>
> Best, Colin