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Date: | Fri Mar 31 17:18:53 2006 |
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Dear Lawrence (and John and Roy):
We seem to be talking past each other. Or the thread
seems to be moving in different directions. Of course,
I agree that neoclassical economics can be challenged
on the points you described and on many others. But
this is a history of thought list. We study history of
thought as it is, not the thought that could have been
or that might be if things happened to be different.
We study other thought besides neoclassical economics
but that is not the issue here.
I think that Robin and I are on the same wavelength,
although she does not mention neoclassical economics
by name.
I have already given an answer to the question of why
"neoclassical economists insist on...methodological
individualism." It is mainly because they are
interested in interventionist arguments. From the
viewpoint of those who make the arguments,
intervention is designed to affect individual
incentives. There is a second, related answer that I
have given. Let me restate this also. The neoclassical
economists attribute economic growth and well being to
the actions of individuals. They believe that
interaction under Smith's system of natural liberty
provides incentives to practically everyone to
participate in the specialization and the division of
labor that causes economic growth under normal
circumstances. They also refer to an extra
contribution of human imagination, creativity, and
inventiveness of particular individuals, who do more
than merely respond to incentives. Those who make an
interventionist argument must demonstrate an
appreciation for the way the system works before one
can take their argument seriously.
In the above quote from your email, I omitted the
phrase "the extreme version" because I don't think
that neoclassical economics insists on the extreme
version of methodological individualism. What you seem
to have in mind is neoclassical modeling. It is
simpler to model interaction if one assumes
independence of individuals. But the best of the
neoclassicals do not disregard culture, religion and
biology. They realize that culture, etc. are relevant
to the economic growth claim and to the assumption
that intervention affects incentives. So there is a
place for these "non-economic" factors in the
evaluation of interventionist arguments. But that is
not relevant to your statements.
Pat Gunning
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