--- "Ross B. Emmett" <[log in to unmask]> wrote:  
  
> simply assume that the range of demands on resources  
exceed the resources available.<  
  
Yes, if that applies to almost all people in all  
cultures at all times and for any available  
technology, which implies that desires necessarily  
exceed resources no matter how much wealth or  
resources exist.  
  
Such axioms are the foundation for pure economic  
theory that applies universally to human action, thus  
if the premise is only for demands given today's  
technology and resources, it does not serve as a  
premise for pure (universal) theory.  
  
> Also, the simplier assumption allows us to ask  
questions about how economic organization in  
> different cultural settings create different  
> incentive structures for adjudicating the relation  
between human desires and the resources available.<  
  
The broader assumption allows us to first develop  
pure, universal theory.  Then we can apply it to  
specific cases, such as some culture.    
Given the universal concept that people respond to  
incentives, then we can apply it to specific kinds of  
incentives.  
  
> are there axiomatic  
> structures which are "institution free"? I doubt it.  
  
How about the economizing premise, that people seek to  
maximize benefits given some cost, or minimize costs  
to obtain some benefit?  (Note that it is utility that  
is maximized, not necessarily money profit.) How is  
that not institution-free?  
Without this premise, economics collapses.  
  
If you are saying that we need to pay more attention  
to institutions, that is indeed the case.  
For example, in teaching principles courses, the model  
of perfect competition says that all firms are price  
takers.  The instructors and textbooks seldom ask how  
the price can possibly change if all actors are price  
takers.  For that, we need to get outside the supply  
and demand box to real world institutions such as  
commodity exchanges (e.g. the Chicago Board of Trade).  
 But very few do this.  Economic theory necessarily  
involves institutions, but the fundamental axioms  
cannot be institutional.  
  
Fred Foldvary