Julio Huato wrote:
Does equilibrium exist as a constitutive element of real economies or
is "only" an idealized abstraction conceived for the convenience or
caprice of the thinker? Both! Theoretical fixed points are
formidable instruments of cognition *because* they capture key
elements in all real processes, elements enmeshed in the stream of
reality. Theoretical fixed points don't live in a Platonic world
shadowing this world. They are aspects of this, actually-existing
world.
yea .... but ...
i haven't seen anyone yet locate your fixed points in actual existing
processes. i've heard people like Jim Devine say there is a shadow of
supply-demand curve (this i can sort of believe). but you make it sound
like its something we can sink our teeth into, and i am not yet
convinced. speaking, of course, as a non-economist, which is one reason
i am here, to see what the progressive econs say about all this.
let me give you a fixed point problem from my world. there are
thousands, i'll pick one.
take batteries (supply) and transistors/resistors (demand) as they
might appear in digital circuits (so, stable on and off states).
when you go to buy batteries for a circuit, you get supply curves from
the manufacturer. no one would design a circuit using a battery without
such a curve. manufacturers obtain such curves very simply: they apply a
load to the battery and monitor the terminal voltage and the current
flowing thru the circuit.
but what load do they use for their testing??? the one i am designing???
no, of course not, they pick an arbitrary load to run their test. and
they can do this, because for all practical purposes, the battery will
behave the same in one circuit or another. if it didn't, the supply
curve for the battery would be worthless. and there are physical
principles which can be invoked to show that there is little coupling
between the type of load and the resulting supply curve.
and naturally, the supply curve tells you something about the battery.
as you place demand on it, its terminal voltage drops, reflecting
processes internal to the battery. and it gets a label: internal
resistance. and it gets studied.
now what about demand?
when you buy transistors (and resistors) and assemble them in circuits,
you can create arbitrary demands on your battery. to design these
circuits, you use demand curves for the transistors. manufacturers give
you these demand curves: they obtain them by applying an arbitrary
currents through the gates and measure how the output of the transistor
responds. (gross oversimplification). no one would buy a transistor from
a company unless they were fully characterized in this mundane way.
same goes true for resistors. they are commodity items, no one even
gives them any thought except for the designer of the circuit. depending
on what your circuit does, you need a resistor with a given resistance
value (ratio of applied electromotive force to current flow), plus and
minus XXX. resistors are manufactured, sampled, and binned. you pay more
money for a resistor whose manufactured resistance is with .5% of its
stated value than within 5% of same. a lower resistance is more demanding.
how then do you design the circuit? you map the supply and demand curves
and see where they cross. for a given set of inputs, if the state of the
last transistor is HI, you the input maps to HI, if LO the input maps to LO.
now, all the details of showing the existence of these crossings, and
how to actually FIND them, especially in non-linear circuits, is
interesting but not newsworthy. and, for example, if you can find a
single stable input with two stable outputs, HI or LO, you've discovered
something interesting: a flip-flop, or memory device.
but there is no supply and demand theory for electronic circuits. we'd
be laughed at if we proposed one. there is only supply and demand for
electronic design.
but the point is, those supply and demand curves have a deep and mundane
history.
is the same true in economics? all i see are those patented 'X's in the
intro econ books. and the authors even have the gall to embed little
round disks into the lines, as if they fit data. but when you see enough
textbooks, you can tell they aren't really data. they are just circles
to make it look like they could fit data.
Les
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