Like others, I enjoyed your essay.
However, it reminds me of those people who say: "It's all right in theory but it doesn't work in practice." If it doesn't work, then you must change the theory.
But, what if the theory is rock solid - even to approaching a law? What if you can find no exceptions, which establishes it as a law?
Then perhaps you should check out the practice.
The first Assumption: "That Man's desires are unlimited." is easily accepted. But, if it were true, then there would be no involuntary unemployment.
Unlimited desires can never be satisfied - not if everyone works seven days a week every week of the year.
Yet, we have involuntary unemployment. People who want jobs can't find them. As Henry George said, "Why are people looking for jobs, why aren't jobs looking for people?"
He generally came up with a great way of saying important things.
As economic scientists, the next thing should be to find out why people are without jobs when they shouldn't be.
And we are out of the classroom and into the real world. But, we are using basic ideas that travel from the classroom to reality.
I doubt this happens in the modern neo-classical classroom. I suspect their major concern is to fill out the semester with work.
For example, all those supply/demand curves could be thrown out the window and replaced with a discussion of the price mechanism and an understanding of Market Clearing Price. You won't find many supply demand curves in the real world, but you will find the Price Mechanism working everywhere.
And, the Market Clearing Price is the way everyone sets their real prices - not their theoretical prices - but their actual prices.
However, Market Clearing is a process of trial and error. This doesn't fit well with mathematics (except perhaps with a rarified calculus that would make my eyes bulge).
Classical Political Economy is a theoretical construct of the real world. I'm not sure what modern economic teaching is.
I know that what is taught today without question or criticism is not what you learned back then, Ed. But, though the skills you developed have certainly stood you in good stead - I doubt that the theoretical bits stood up to the test of the years.
And that's awful
Harry
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Ed Weick wrote:
The list has see considerable discussion of the nature of economics recently. I haven t been able to participate because I ve been busy on other things, though I ve tried to read some of the material.
The problem in at least some of the postings is a failure to distinguish between economics as something that is taught in the classroom and economics as one must use it as a practitioner. In the classroom, economists are taught macro and micro economics. They encounter economic thinkers of the past the physiocrats, the classicists, Marx, neoclassicists, Keynesians. They encounter self-interest, rational choice, and welfare theory. Some of this is presented algebraically, some geometrically, and some as words. All of this is well and good because it makes young minds work. The intent, as I understood it when a student, is not to learn about the real world, but to learn how economists imagined the world, and still imagine it.
When one gets out of the classroom, and even before, one encounters the real world, where real issues must be resolved with real answers. As an economist in the Canadian public service, I was never able to satisfy my superiors by drawing indifference curves or citing the iron law of wages. What they demanded of me was short, snappy and well reasoned answers, something they could use to move a particular issue forward. Undoubtedly, what I had learned in the classroom helped because it had sharpened my ability to think rationally and provide helpful, if not necessarily correct, responses. That, in my opinion, was the real value of what I had been exposed to as a student. I still don t know if what my professors taught me was right, wrong or relevant. All I know is that it helped to make me a useful thinker.
Real world issues don t often come in a way that make the tools of economics directly applicable. Mostly they come as very difficult questions. For example, why has Argentina had to repudiate its debt and why is it now in a deep recession? Classroom economics can provide some insights into this, but if I really had to provide an answer, I would consult someone with several years of experience in international finance and monetary policy someone who knew the turf, so to speak. I would also search out people who knew about the history and culture of Argentina, because I suspect that what has happened there is far larger than something that economists or monetary experts can deal with.
One aspect of globalization and mass communication is that issues now come thick and fast and from all over the place. Rather than discreet and separable events, they pound in on us as a babble of noise. Here again the specific content of the individual bits and pieces learned in the classroom may be of little use. Drawing indifference curves would not be very helpful and one probably wouldn t have time to draw them anyhow. Yet I would maintain that the fact that one had to use those bits and pieces as tools to try to sort things out in the imaginary world of the classroom was helpful. It helped one to learn how to pick apart the various strands of the noise and to rank or sequence them in ways important to finding real world solutions.
So, to end this, I would suggest that we not get too hung up on the "nature" of something like economics as a received body of thought or theory. Certainly, one should not hesitate to question its premises. But to me the important question is whether what one learned in academe has helped one to think and solve problems. Even though I have not drawn a single indifference curve since leaving the classroom, I would answer this in the affirmative.
Ed Weick
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Harry Pollard
Henry George School of LA
Box 655
Tujunga CA 91042
Tel: (818) 352-4141
Fax: (818) 353-2242
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