Perelman, Michael wrote: > The article seems to be based on Phil Mirowski's wonderful book, More > Heat Than Light ... > > Phil shows how the economists wrote to the leading physicists of the > time congratulating themselves about how they made economic scientific. > The physicists wrote back that the economists did not understand > physics; that physics has conservation laws, which economics violates my > assuming unlimited growth.
FWIW, some mainstream types have argued vigorously against Phil's theory. I don't know what their arguments are and can't defend them. The article says that standard neoclassical economics (NCE) says that: > * The market system is a closed circular flow between production and > consumption, with no inlets or outlets.< This is not an inherent part of NCE: the closed circular flow is usually about exchange-value, not use-value. At least that's true in macro. > * Natural resources exist in a domain that is separate and distinct from a > closed market system, and the economic value of these resources can be > determined only by the dynamics that operate within this system.< This, on the other hand, seems quite typical of NCE in practice. I don't know if it's a necessary aspect of NCE in theory, however. > * The costs of damage to the external natural environment by economic > activities must be treated as costs that lie outside the closed market system > or as costs that cannot be included in the pricing mechanisms that operate > within the system.< This does not seem typical. If damage to the "external" natural environment changes costs, it has an impact on the market and on prices. Practitioners of NCE would in fact argue that the costs of damage to nature _should_ be treated as costs. Internalizing externalities and all that. > * The external resources of nature are largely inexhaustible, and those > that are not can be replaced by other resources or by technologies that > minimize the use of the exhaustible resources or that rely on other > resources.< This view does not arise from the basic framework of NCE. Instead, it comes from optimism about the efficacy of the price system, something embraced by the (currently-dominant) right wing of NCE as opposed to the left wing of that research program, which sees "market failure" as common if not ubiquitous. (In the latter perspective, the Invisible Hand needs the government's Helping Hand.) The right-wing's optimism, by the way, is based on the political ideology of _laissez-faire_, which is distinct from NCE (though the two sets (NCE and LF) have a big overlap). It also leads to the assumption that exchange-value (price) is the best measure of use-value. > * There are no biophysical limits to the growth of market systems.< I don't know who says this. But it's possible some do. > If the environmental crisis did not exist, the fact that neoclassical > economic theory provides a coherent basis for managing economic activities in > market systems could be viewed as sufficient justification for its widespread > applications. But because the crisis does exist, this theory can no longer be > regarded as useful even in pragmatic or utilitarian terms because it fails to > meet what must now be viewed as a fundamental requirement of any economic > theory—the extent to which this theory allows economic activities to be > coordinated in environmentally responsible ways on a worldwide scale. Because > neoclassical economics does not even acknowledge the costs of environmental > problems and the limits to economic growth, it constitutes one of the > greatest barriers to combating climate change and other threats to the > planet. It is imperative that economists devise new theories that will take > all the realities of our global system into account.< This is much too abstract. If people want to talk about the inadequacy of NCE (as they should!), they must present an alternative. It's not enough to trash a theory, even if one's criticisms are totally valid, if the alternative is the null set, intellectual anarchy, crude empiricism, scholasticism, or religion. BTW, why is it okay to show a picture of a man's butt, but not a woman's? -- Jim Devine / "Segui il tuo corso, e lascia dir le genti." (Go your own way and let people talk.) -- Karl, paraphrasing Dante. _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
