RE: [OPE] constant returns to scale

From: Anders Ekeland <>
Date: Thu Oct 02 2008 - 05:42:39 EDT

Hi Michael,

I do not think it is arbitrary - as you explain
yourself - cost curves are long term downward
sloping, and as a consequence they are mostly
interested in "wizard wheezes for avoiding
competition". But again - real competition is
equal to avoiding "perfect competition" (this
static, stagnant, no-competition hell).

The word competition has completely absurd
meaning in neo-classical economics as pointed out
by f.ex Morgenstern in 1972, "Thirteen critical challenges..."

Most of economic theory is concerned with
introducing real life problems into a model
(perfect competition that cannot be made to
incorporate these phenomena without loosing the
optimal (ideological) properties of the
Arrow-Debreu construction. That is the
fundamental reason why main-stream economics is
overly mathematical and mostly very irrelevant,
cfr. the current financial crisis.


At 09:56 02.10.2008, you wrote:
>OK, but it seems arbitrary to exclude these
>applied branches since what they apply is highly
>orthodox economics, and indeed industrial economics is not very applied.
>Dr Michael Williams, BA, MSc, PhD
>Mob +447906172655
>Home tel +4423 80768641
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>-----Original Message-----
>[] On Behalf Of Anders Ekeland
>Sent: 02 October 2008 07:29
>To: Outline on Political Economy mailing list
>Subject: RE: [OPE] constant returns to scale
>At 22:33 01.10.2008, you wrote:
> >It is just wrong to say that IRS are not dealt with in current
> >orthodox economics. Industrial/managerial/business economics are
> >replete with tales of long-run average cost curves sloping down,
> >perhaps to the full extent of the market, the implications of a
> >minimum efficient scale large relative to the maximum extent of the
> >market and so on, and the strategic implications of this.
>Hi Michael,
>This is just a question what one calls "orthodox economics", I do not
>include ind/manag/biz economics in that concept, precisely because
>they are concerned with real profit maximising and not ideological
>exercises a la Samuelson, Arrow, Debreu and Hahn. And as you point
>out these two schools of thought are worlds apart.
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