Re: PK epistemology

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

Dear Fred:

First, thank you for being a gentleman and responding to my comments in the
spirit in which they were made - namely, that of frank dialogue among
economists who (a) care deeply about economics, (b) appreciate its
importance for real-world issues, and (c) recognize that all is not well
with modern economics.

In this respect, the ONE thing in which I fault the Post Keynesian approach
concerns MONEY, whose essential attributes remain to be clarified and made
integral part of an economics curriculum designed to serve the objectives of
full employment and price stability in the context of equitable and just
economic systems.

Keynes, having researched and written 'Tract on Monetary Reform' and
'Treatise on Money' over the better part of a decade, took time out from
further work on the monetary aspects in 'The General Theory' - "...and
whilst it is found that money enters into the economic scheme in an
essential and peculiar manner, technical monetary detail falls into the
background," as he put it in Preface.

Within Gang8, our focus has been on such "technical monetary detail" - not
for its own sake but as a necessary condition for moving towards a better
monetary environment at both national and international levels in the
possibly not so distant future when post-Bretton Woods world monetary
arrangements and associated interest and exhange rate policies will have to
be revisited and reconstructed.

It seems to me that, with such "technical monetary detail" added, Post
Keynesian Economics may become the economics which Keynes left unfinished -
for, as I have stated on earlier occasions, I am persuaded that such
"technical monetary detail" is the ONLY part of economics where there is
place for rigorous axiomatic treatment of first principles.

The rest is common sense.

Gunnar


----- Original Message -----
From: "Lee, Frederic" <leefs@xxxxxxxx>
To: "Gunnar Tomasson" <gunnar.tomasson@xxxxxxxxxxx>; "pkt"
<pkt@xxxxxxxxxxxxxxxx>
Cc: "Gang8" <gang8@xxxxxxxxxxxxxxx>
Sent: Friday, April 18, 2003 5:49 PM
Subject: RE: PK epistemology


Dear Gunnar,

Thank you for the short comments which I read as saying that heterodox
economics is not really economics and clearly cannot claim to be a
"science".  Explaining how things work (such as how enterprises set prices,
how cartels work, etc.) is a good objective for any intellectual discipline.
How that objective is met can differ across disciplines as well as within
disciplines.  That mainstream economists reject the kind of methodology I
advocate does not make that methodology inappropriate to meet the objective.
In any case, with different methodologies, concepts of rigor and logic will
have different or even no meanings.  That this difference should be grounds
for excluding heterodox economics from the economics curriculum I find
inappropriate.  Moreover, I should note that neoclassical microeconomic
theory is theoretically incoherent (at least that is what I have written in
a recent paper) and I would argue that this may be a good reason not to
include it in the economics curriculum.  At least heterodox microeconomic
theory is not incoherent (even if it is very much incomplete) even if it is
excluded from the economics curriculum.

Sincerely,

Fred Lee

-----Original Message-----
From: Gunnar Tomasson [mailto:gunnar.tomasson@xxxxxxxxxxx]
Sent: Friday, April 18, 2003 1:43 PM
To: Lee, Frederic; Colin Danby; pkt
Cc: Gang8
Subject: Re: PK epistemology (was: "Harvard rejects...")


Fred:



Thanks for posting this paper.



Before reading it, I had not realized that Post Keynesian "epistemology" is
essentially sui generis and that concepts such as "causality", "theory", and
"model" have a meaning therein wholly different from that which they have
in, say, theoretical physics, and that "logic" in Post Keynesian Economics
does not rise to the level of its lowly place in Positive Economics, which
Milton Friedman summarized as follows:



"Logical completeness and consistency are relevant but play a subsidiary
role; their function is to assure that the hypothesis says what it is
intended to say and does so alike for all users - they play the same role
here as checks for arithmetical accuracy do in statistical computations."



I am left with the impression that Post Keynesian "epistemology" = whatever
modus operandi is currently in vogue among Post Keynesian economists.



IF this is a fair summary of the state of affairs in "heterodox" economics
in general, THEN the case for its inclusion in economics curricula strikes
me as weak to non-existent.



Gunnar


----- Original Message -----
From: "Lee, Frederic" <leefs@xxxxxxxx>
To: "Colin Danby" <danbyc@xxxxxxx>; "pkt" <pkt@xxxxxxxxxxxxxxxx>
Sent: Thursday, April 17, 2003 5:39 PM
Subject: Re: PK epistemology (was: "Harvard rejects...")


Dear Mr. Darby,

With regard to your query with regard to epistemology etc. you might want to
look at my paper on grounded theory which is attached.  The paper also
appeared in the November 2002 issue of the CJE under the title of "Theory
creation and the methodological foundation of Post Keynesian economics".

Fred Lee





-----Original Message-----
From: Colin Danby [mailto:danbyc@xxxxxxx]
Sent: Thursday, April 17, 2003 3:34 PM
To: pkt
Subject: PK epistemology (was: "Harvard rejects...")


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