Re: [OPE-L] an ad hominem response

From: Rakesh Bhandari (bhandari@BERKELEY.EDU)
Date: Mon Apr 17 2006 - 23:15:42 EDT

>Isn't it also a huge discussion precisely what kind of logic we are
>talking about, especially in economics? Where the mainstream
>neo-classical "logic" is static equilibrium, and everything else is
>regarded as "verbal" (ad hominem)?
>The same static logic of Sraffa and Bortkiewicz also has fundamental
>effects on what is regarded as logical, consistent, cf. the
>discussion about the transformation problem.
>If you then go to dynamic systems, cybernetics, chaos theory, this
>logic (these mathematical tools) is much less restrictive regarding
>what is regarded as "logical". Quite other "stories" can be told
>using this kind of "logic".
>My answer to Mike L. would be that is not a mere question of
>integrating some divine "logic" with "verbal persuasion". We need to
>discuss what kind of logic is at the basis of economics. No argument
>is convincing if it is not logical.
>Concretely what we need more than ever is to continue the fight
>against the static equilibrium logic in economics. IMHO no argument,
>no theoretical result, that builds on static equilibrium should be
>accepted unless stability is proven, i.e. what happens if we are not
>in equilibrium.

I think we should also ask why within Marx's own theory
simple reproduction is not an equilibrium situation or a very unstable
condition. It also does not seem to me that Marx would have thought
it possible for capital to remain in a situation of stable Keynesian
equilibrium or a Sweezy-ian permanent stagnation.


>This is a task that the Arrow-Debreu school still
>faces, their Achilles heel indeed, not "logic" on their chosen terrain.
>Because capitalism is never in static equilibrium, the same forces
>that drives towards equalization of profits also creates vastly
>different profit rates - endlessly. Just to mention one aspect of
>this faulty "logic".
>Before radical economist call "perfect competition" by its right
>name, that is "perfect stagnation" - this fight is not over. There is
>not an iota of competition in "perfect competition" - only utter
>stagnation. From a welfare maximizing point of view "perfect
>competition" is definitely not a place we want to be.
>To me dynamic systems - and computers that can solve complex equation
>systems numerically - makes it possible to formulate many "verbal" -
>"ad hominem" arguments in mathematical, i.e. "logical" terms. This
>makes it possible to express common sense economic reasoning - which
>is always dynamic, non-linear, having a lot of interaction
>(feed-back) among the various processes it describes.
>Most people - even some radical economists - do not realize how
>utterly static "perfect competition" is. They no not realize that
>there is no theory on how we get there and stay there, given the
>improbable case that we should happen have such perverse utility
>functions as to wanting to to be in such a dismal state.
>Anders Ekeland
>At 21:26 16.04.2006, glevy@PRATT.EDU wrote:
>>  >          Back to my not-so-whimsical question--- do we need more
>>>  abstract theory or more attempts at persuading and developing a new
>>>  common sense these days?
>>Hi Mike L,
>>It shouldn't be an 'either - or' type of question.  The question should
>>be how the two can best be integrated.  Easily said, of course, ....
>>In solidarity, Jerry
>>PS: beware cherries that are picked from a poisoned field.

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