Yuval P. Yonay concludes her post with: "I aplogize for a too lengthy
message, and being a sociologist I hope I didn't make any awful mistake
in economics." She could have first read the Dixon article from the
site kindly provided by Mat Forstater, just I did, before attempting her
contribution. She also could have endeavored to explain the extent to
which Becker's economic analysis differs from Marshall's strictures on
method, instead of asserting a difference between their work. Only from
such serious effort could she have helped to advance the discussion or
understanding among participants. "Shooting from the hip," which is
what I would describe her response to be, is not helpful.
Thus, Yuval claims: "I don't know Dixon's paper but I assume that he
preferred 21,000 apartments over 23,000 not because of his assumption
that the black entrepreneur is less motivated by profits but rather due
to the positive impact of profits gained by black entrepreneurs (and
assumingly, the more numerous black workers in their firms) on the
overall economic standing of the Afro-American community. Earned income
have a more lasting contribution than public housing."
In the first place, that's not Dixon's excuse for preferring the less
efficient allocation of funds. Rather, his claim is that of a
"collective black preference for having its own productive facilities"
(p. 429n). But surely, people in the white, yellow, brown, or whatever
pigmentation community also would like to have their own "productive
facilities," don't they? And the funds to acquire productive facilities
just don't drop from the sky or grow on trees. They have to be borrowed
from savings (or taken from income earners through taxes). That is why
worrying about the cost of "capital" or funds (or the opportunity cost
of the collected taxes), and employing the funds efficiently to be able
to recover the interest cost, wage expenses, materials in construction,
and earning the developer's own wages (profits) matter in a correct
analysis. And to promote economic growth in a community, efficiency in
the allocation of resources matters. Encouraging a higher-cost
production, which Dixon's article suggests, is not the way to promote
economic well-being among the black or any other community.
Going back to Becker, Yuval writes as if he recommends any particular
family arrangement rather than attempts to explain the choices that
spouses have made. Thus what appears to Yuval as a critique of Becker's
work: "... but the question is what happens if the spouses decide to
separate. In such a case, women are left stranded (and this is just one
problem)," is really little more than asking whether the family utility
function defined over "until death do us part" is the same as one
defined over "until divorce do us part"? The answer is no, and
"neoclassical economics" can handle or model that too. In all this, one
is only following Marshall's point that economics is not a body of
settled conclusions to be applied in all circumstances but a *framework*
or an apparatus of the mind for understanding human behavior in
different circumstances.
James Ahiakpor
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