From: "Shane Mage" <[email protected]> "No only does he ludicrously describe Keynes--who repeatedly ridicules mathematical modeling of economic behavior--as "Neoclassical." He even fails to understand the theoretical basis of ordinary (including Marxist) microeconomics, which is not that economic actors are "rational informed value judging individuals," but merely that *enough* economic actors act rationally--the sum of other behaviors being random with respect to that rationality--for economic rationality to model the central tendency ("average") of market behavior."
On-point on Keynes, although I've doubts on your other point. One of the fundamental premises of the article is that the reality of the matter is that economic agents cannot be assumed to act rationally in the aggregate, and really I think this is an empirical question which could be answered by the right experiment. One of the ways to look at it is on the lights of the efficient market hypothesis, according to which an efficient market will embody all known information on an asset through its price, so that it is impossible to make better predictions than the market itself can on its future price except by chance, whether by examining the fundamentals, the historical pricing of the asset, or any other way. This doesn't quite seem to hold in reality, there being agents who seem to successfully exceed the performance expected from a random choice. More to the point, the whole mechanism of marketing suggests that there is a serious rationality deficit somewhere: either consumers are rational, in which case enterprises are irrational in spending resources on marketing, or enterprises are rational, and consumers are irrational and their susceptibility to marketing must be more than a random variable. In the end, though, the whole premise of rationality and so on entails a certain model about agents, as utility maximisers, which I'm not sure how seriously to take. Aside from the fact that, assuming people really act on the basis of utility functions, those aren't likely to be completely endogenous, but in all likelyhood contain references to the state of others, it's a bit difficult for me to believe that decisions can be reduced to a single factor, an ordered scalar. The concept of choice itself seems difficult to formalise without possiting some sort of independent autonomous process outside causality, or maybe I'm just not versed enough on this matter. --David. ________________________________________________ YOU MUST clip all extraneous text when replying to a message. Send list submissions to: [email protected] Set your options at: http://lists.econ.utah.edu/mailman/options/marxism/archive%40mail-archive.com
