Re: Blinding Assumptions: Can they be abandoned?

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

John:

Briefly re. the following:

> Perhaps much of our complaint against the study of
> analytical (versus pragmatic) economics can be
> resolved into these two  issues....

In the context of Keynes' 1922 definition of 'The Theory of Economics' - "an
apparatus of the mind, a technique of thinking" - the concept of
"analytical" economics has traditionally denoted the purely LOGICAL aspects
of the subject matter.

That is to say, deductive reasoning from axiomatic premises.

In his chapter on the epistemological aspects of Post Keynesian Economics on
which I commented few weeks ago, Fred Lee makes it clear that "logic" is not
of the essence in PK economic models.

Therefore, none of these models are "analytical" in the traditional meaning
of the term.

Gunnar


----- Original Message -----
From: "John Gelles" <indexed-savings@xxxxxxxxxxxxx>
To: "Proceedings of PKT Forum" <pkt@xxxxxxxxxxxxxxxx>
Cc: "John Gelles" <indexed-savings@xxxxxxxxxxxxx>
Sent: Friday, July 04, 2003 11:23 PM
Subject: Blinding Assumptions: Can they be abandoned?


>        'With the emergence of stagflation (unem-
>         ployment and inflation rising simultaneously)
>         in the mid-1970's, and failure of economic
>         models to forecast accurately, confidence in
>         economics was badly shaken.
>
>        'Although computers and game theory have
>         since then offered a measure of confidence
>         to some who observe or practice the econ-
>         omics profession, there remains persistent
>         dissent from the profession's ineffective
>         ideas.
>
>        'Outsiders and influential insiders have argued
>         that the assumptions needed to fit economics
>         into the mathematical mold, (i.e., econometric
>         models that have continued to develop since
>         introduced in the 1930's), have blinded econo-
>         mists to increasingly important issues models
>         have not yet helped.
>
>        'These include issues as diverse as (a) the envi-
>         ronmental catastrophe that surely will result
>         from population growth and policies of laissez-
>         faire, and (b) the social agony that has persisted
>         in both free-market and planned economies.'
>
>             -- Adapted from "A History of Economics from
>             the Ancient World to the Twenty-first Century"
>             (subtitle), by Roger Backhouse, Chair in the His-
>             tory and Philosophy of Economics, University
>             of Birmingham (England).
> -----------------------------------------------------------------
>
> Perhaps much of our complaint against the study of
> analytical (versus pragmatic) economics can be
> resolved into these two  issues:
>
>             (a) the environment:  overpopulation meets
>             laissez-faire, and
>
>             (b) society:  people, under corporate govern-
>             ance and/or police-statism, live in agony ;  and
>             they don't know how to create, achieve or evolve
>             Lincoln's government of the people, by the people
>             and for the people.
>
> A discussion forum, like Post Keynesian Thought, is proof
> of the variety of opinions that democracy has to accommodate.
>
> Many of us will agree that part of the solution to the
> above issues is the large sums money that could be spent
> to address them:  where will that money come from?
>
> If that money comes from taxes we know those who will
> be taxed may form a "natural" opposition to addressing
> the issues.
>
> Is it not fair to ask -- Is there another source of money?
>
> In my view the essence of money is its power to offer a
> "pricing" system -- as imperfect as its prices may be.
>
> In my view we are ready to use computers to give us
> more perfect prices. In other words, computers can find
> the money within the system of production -- and with-
> out loss of freedom of enterprise (within reason).
>
>
>
> So there you have it for the 4th of July:
>
>             America is the promised land.  It offered the ideal
> of government of, by and for the people.  It has helped to
> bring computers out of the minds of geniuses into the
> everyday market place.  It is ready to follow Ben Bern-
> anke's idea -- that we can create a modern gold that will
> pay what we must to meet these issues.
>
>             Paying for programs is, of course,  only a part of
> the job -- albeit, it is crucial -- if whips and guns are out-
> lawed as the means achieve to our ends.
>
>             Writing the laws and implementing the programs
> authorized by law is the bigger part of the job.  I won't
> object if we here today begin to get on with that work.