[OPE-L:3453] Re: assumptions, assumptions, assumptions

Steve Keen (s.keen@uws.edu.au)
Wed, 16 Oct 1996 13:45:49 -0700 (PDT)

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I think it's time that this debate lent on a bit of external wisdom. The
Alan/Jerry dispute here is beginning to read a bit like the early days
of Friedman/Samuelson after Friedman's "the more unrealistic assumptions
are, the better the theory" argument, which Samuelson christened "the

There's an excellent short paper by Musgrave (reproduced in Bruce
Caldwell's book of readings) where he distinguishes between simplifying
assumptions--where you have to be unrealistic to avoid building a map on
a scale of 1:1--, domain assumptions and heuristic assumptions.

A domain assumption is one which says that "this theory works only if
these assumptions hold". For example, the assumption that there are only
2 bodies in a planetary system is needed if Newton's model of
gravitational attraction is to be valid. Bring in 3 bodies, and, of
course, we get chaos.

A heuristic assumption is one which is introduced to enable an initial
model to be constructed, and which will be removed later to achieve
applicability to the issue under consideration.

So is v=0 a simplifying, domain, or heuristic assumption?

No way is it a simplifying assumption, in my opinion--and I suspect in
Jerry's. It's either a domain assumption--in which case what we're
discussing is not capitalism--or it's a heuristic.

If it's the latter, then it can only be a first step on the way to the
more general model. If this is the case, then by all means proceed with
it, but don't expect that any conclusions drawn from it are of any
relevance to capitalism. Relevance comes when the unreality is dropped,
to bring us to the more general case where it applies to the domain we


Gerald Levy wrote:
> I will respond to Alan's [OPE-L:3431] in two parts. In this post I will
> deal with substantive issues related to the "accumulation of capital
> revisited" (and "assumptions, assumptions, assumptions") threads.
> > I know
> > Jerry doesn't rate the distinction between a model and an
> > illustration - but we do.
> Alan -- *you* have *repeatedly* referred to what you were constructing in
> many OPE-L posts as models. Moreover, when others in the Okishio thread
> like Duncan, John, and Fred referred to what we were discussing as a
> "one-sector model", you did not object.
> > I am in no doubt that Jerry considers the assumption V = 0
> > to be wrong. The fact that I haven't replied to him does
> > *not* mean that I haven't heard him. I hear it quite clearly
> > and I've considered it very carefully.
> Read below.
> > Since I'm sure
> > I'll make mistakes, author's corrections to the Freeman
> > interpretation of Levy are welcome. This is:
> > 1)we can only model reality if our assumptions are all
> > realistic.
> I never said that or suggested that. In fact, I have said *over and over
> and over again* that this is not my objection.
> > 2)we can only discuss reality if our assumptions are all
> > realistic.
> I did not say this nor did I suggest it -- as the archives will
> demonstrate.
> > This only follows from (1) if we also assert
> > 3)the only way to discuss reality is to build a model of
> > it.
> Another postulate that I did not advance.
> > I think Jerry is interested in something different from us.
> > His position seems to be, with nuances, a general criticism
> > of nearly all deployment of simplifying assumptions in
> > economic analysis, related to what seems to be the idea that
> > the goal of economic theory is the construction of models.
> I did not say that nor did I imply that. Quite the contrary. What I have
> stated -- what seems like countless times -- is that I object to the
> vacating of fundamental categories related to understanding the subject at
> hand. The assumption of v = 0 is *more than* a simplifying assumption. As
> we have seen, it is also a claim about the category of wage-labour and
> relates to other categories as well such as commodities, money, markets,
> prices, profit, etc..
> I do wish that you would have read my posts more carefully.
> In Solidarity,
> Jerry