Comments?
Jim
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From: "Colander, David" <[EMAIL PROTECTED]>
To: "'[EMAIL PROTECTED]'" <[EMAIL PROTECTED]>
Subject: Re: HES: QUERY -- Institutionalization of Neoclassicism
Date: Fri, 22 Jan 1999 15:33:36 EST
Reply-to: [EMAIL PROTECTED]
=================== HES POSTING ===================
I have come to believe that the term neoclassical is no longer a useful
term to capture the ideas that are taught to economists in graduate
school. What is taught, and what is believed by the majority of
economists, is much more of a pragmatic application of ideas about
individual self-interest interacting into some result. Most policy work is
econometrically based data mining, not application of theory.
The strong arguments that held the neoclassical economic paradigm
together theoretically have been eliminated and replaced with a pragmatism
about policy. Game theory with no definite result has replaced any
theoretical defense of the competitive model in standard graduate micro.
In macro there is a mess, but what remains in the majority of schools is
essentially data analysis with slight modifications due to theoretical
preconceptions. So while I agree with Drue that the U.S. institutional
structure does not approximate "the neoclassical paradigm" I also agree
with Robin that the mainstream economic approach is kept because it
sheds some light, or seems to, on economic policy.
I see far less ideological content than does Drue and Joan Robinson. The
reality is that the majority of economists I talk to--including the high
up ones--are liberal. They favor redistribution and are open to state
action if they believe it will be beneficial. Look who supports the
economists for peace movement. Libertarians and conservatives feel as
disenfranchised as radicals (well, almost). Clearly, the
Samuelson-Solow-Arrow nexus is liberal.
Liberals are, by nature, hesitant about significantly changing
institutions which leads to a pragmatism about policy and a hesitancy
about changing institutions. This makes their ideas fit in well with
political forces which are also hesitant about changing institutions.
The few people who care about internal coherence of the broader
paradigmatic approach are exploring other options--that's why complexity
theory at Santa Fe was supported by Arrow. It has not been accepted
because it has not yet had the major insight or event that overcomes the
inertia associated with the old approach.
I think what has caused the problem is the combination of theory and
policy--something Marshall warned against. The only economists who can
really delve into theory in a neutral way are those who keep themselves
out of any political fray. The combination of theory and policy advocacy
makes it seem that the policy arguments are based in theory when in fact
they are based in a pragmatism. Most economists simply aren't much
interested in theory.
The rise of the support of the market among these pragmatic economists and
among economists has more to do with recent history--the market seems to
be working--than it does with theory. The fall of communism, the success
of market oriented development plans, and the continued strength of the
U.S. economy has led to the pro-market mood of the country.
David Colander
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James Craven
Dept. of Economics,Clark College
1800 E. McLoughlin Blvd. Vancouver, WA. 98663
[EMAIL PROTECTED]; Tel: (360) 992-2283 Fax: 992-2863
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