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I don't think we got very far looking for a language to distinguish among 
the different types of economics that are jointly labeled "neoclassical" 
or, if you wish, mainstream.  You can make clear distinctions between 
"neoclassical" and the various schools that together are termed  
heterodox economics -- and in that case, you have to be careful when you 
talk about "mainstream" economics because outsiders don't understand that 
there are heterodox economists employed with tenure at what they think are 
mainsream departments.  I personally tend to use the word "mainstream" 
when referring to that-which-is-taught-today. 
 
But the distinctions I wish to find names for come from within the single 
school of neoclassical economics today.  Why name them?  so you can talk 
about them -- if you do not name them, then the fiction remains that all 
economists speak with a single voice -- so instead of saying, "we 
disagree", 
they say, "he's wrong and I'm right."   
 
As an outsider-insider (I must confess to those who don't know that my 
father was an economist; my husband has a Ph.D. in economics but shifted 
into finance almost immediately upon graduation; focuses on financial 
institutions and regulation; and I have had thirty hours of graduate 
economics, unfortunately at two different schools so I don't have a 
degree -- but the advantage is that I had graduate macro and micro 
TWICE, in two completely different versions, at two different 
universities.) 
-- to repeat, as an outsider-insider, I have observed an unrecognized 
tension between the fruits of applied microeconomic theory and The 
Theory as a whole. 
 
I have tried to express this for a different discussion list concerned 
with the boundaries between "science" and "humanities" -- and in some 
unfinished research (on economics and history, some of which is at  
http://pw1.netcom.com/~schweit2/history.html) -- but ultimately 
this is very much a history of economic thought topic, so I would like 
to float this here and see what the reaction is.   
 
Much more of the development of the discipline of economics takes place  
in the arena of applied microeconomic research today than most economists 
will admit.  Practically speaking, a department can only have so many 
"pure" theorists -- MOST economists specialize in a subfield and concern 
themselves with the specialized literature/ideas in that area. 
 
Whereas "pure" theory must concern itself with metanarrative, with 
the grand story and its many simplifications, applied research is 
more concerned with the absence of simplicity.  Economists maintain 
the controlled lab fiction (or, more positively, the advantages of 
trying to mimic the controlled lab) by trying to "control" for most  
variables while letting just a few float -- but it is my observation  
that in each of the various applied subdisciplines they are quite  
used to accepting that certain ones do indeed float -- that you 
cannnot possibly comprehend contemporary models in various  
applied microeconomic subdisciplines without accepting that a few 
particular assumptions don't hold -- EVER. 
 
What economists have not been able to do is pull that back together -- 
admit to that.  Research over here deals with the violation of 
free flows of information; research over there deals with the violation 
of instantaneous adjustment (take urban economics as a good example) -- 
what happens when you pull all that together?  Economists can handle a 
model where PART of it floats, but not where ALL of it floats. 
 
The LANGUAGE of "neoclassical economics" as a metanarrative simply 
does not permit ALL the assumptions to float ALL the time. 
 
A major contradiction occurs in the way economics is defined as 
the study of individual behavior, yet the objects of analysis are 
not individuals.  In THEORY, demand begins with the individual 
maximizing utility subject to constraints; in practice the unit 
of decision-making is the HOUSEHOLD, an institution.  In THEORY, 
supply begins with the individual minimizing costs subject to 
constraints, in PRACTICE the unit of decision-making is the firm. 
 
Economists finesse those differences by peceiving of the household 
as having a major decision-maker with regard to the external  
economy (the head of the household) -- a fiction easier to maintain 
in an era where the concept of "head of the household" was strongly 
embedded in both culture and law.  Not so easy today. 
 
The fiction of the firm as an "individual" -- supported in this case 
by law -- is maintained by various efforts to assert that the  
even if the individuals who make decisions within the firm are 
maximizing their own personal utility, if it is in their personal 
interests to maximize profit (or rather minimize costs), then it doesn't 
matter - the results are the same.  Or by invoking the concept of 
market discipline -- that whatever the individual personal preferences 
of actors within the firm, the market will weed out those firms that 
fail to operate as a firm should; hence the institution of the firm 
has survived to the extent that it serves to induce individuals to  
act in the firm's interests (as a particular firm will survive only 
if the human beings within it are successful in making the firm behave 
as a profit-maximizing individual). 
 
This is very different from the world Marshall actually wrote about; 
it is also very different from the vision Samuelson had at the time 
of his classic textbook -- "as if it were" is not quite the same as 
"it is". 
 
The model operates AS IF supply and demand comes together in a single 
identifiable place -- but many (most?) cutting-edge applied economists  
work today instead with the concept of packages of attributes -- no  
single one of which can be maximized or minimized -- and a resulting  
RANGE of optimal results (in terms of low costs/greater utility).   
 
Which leaves room for a judgment call as to how large that range is,  
and leaves room for political, cultural, social determinants affecting  
where in that range one lands. 
 
I see economists uncomfortable, particularly with this last -- and 
responding by denigrating it as "too mathematical", as historians 
and other non-math fluent scholars used to deride Marshalleanism. 
 
The easy wave of the hand and toss-off comment -- this is a sign of 
an internal tension within the discpline of economics that is not 
resolving.  Where can you begin to see this crack in the wall of 
neoclassicism?  Arrow?  Akerlof's "Lemons" article -- which one portion 
of the discipline thinks is a classic and the other despises?   
(I can think of other examples -- but would first want to know if 
you would accept these AS examples.) 
 
At the same time as some of this literature is dismissed as "too 
mathematical", other research in the same vein is dismissed as "not 
theoretical enough".  Either way, the economist can withone 
sentence dismiss an entire range of reputable research conducted 
by reputable economists -- and the intellectual CONSEQUENCES of 
that research. 
 
If you combine ALL of these packages of attributes that are 
studied in EACH of the different applied micro fields, all of the 
bending of assumptions, where do you end up for macro policy making  
decisions?  Someplace very different than you would thihk to hear  
macro policy economists speak. 
 
So there is a very strong internal tension between the demands of the 
Marshallean/Samuelson model -- and the mounting evidence from two 
generations of post-war economists chipping away at a specialized 
practical economic problem. 
 
And this can lead to arbitrary application of the Mantra of the Model 
(if I may call it that) when cornered, or when asked to apply what 
an economist "knows" to a larger problem.  And a tendency (I think) 
to brusquely shove aside anything that threatens the hegemony of the 
Marshall/Samuelson market model -- NOT the hegemony of Capitalism, 
but the hegemony of a very usable, useful, easy, powerful idea 
system.  Encouraged externally by those who have something to gain, 
perhaps, by the continuation of academic authorization for their 
own agendas -- but the internal tension surrounding the Model derives 
from the sociology of the Academy, I think. 
 
One might find a similar set of tensions radiating from those who 
USE linguistic theory or Marxist theory in the context of other ways  
of knowing, and those who NEED theory for purposes of wielding local 
power and attaining local status. 
 
Imagine a set of research programs set in motion about a century ago,  
institutionalized in the artifact of the "department", and four generations 
of people whose livelihoods depended upon adding something to the specialty 
defined and contained within that "department" -- without much regard to  
whatever was going on in the next department over -- where are we now?  The 
metanarratives were "modern" in the sense of such strong conviction that  
knowledge could be contained in this way; that knowledge attained through  
the appropriate methodology could safely be set aside as "known" while we 
proceed to the more "unknown."  It is the sense of certainty that makes 
it modern. 
 
But it is also the institutional need to retain the concept of The 
Discipline itself, with fixed boundaries. 
 
How does one justify "The Discipline" without a metanarrative?  But what 
would happen to academics -- to what is productive in academics -- 
without a sense of "disciplines"? 
 
Economics claimed to focus on an "object" -- not individuals, but THINGS 
-- the production, distribution, and consumption of THINGS over time -- 
then shifted to studying BEHAVIORS, including the "behavior" of the 
market.  Many economists will tell you today that what they "do" as a 
specialty is a form of problem-solving not taught elsewhere. 
 
That you can use that model with ANYTHING. 
 
I don't think you can understand this outside of the context of the 
current problems OF the Academy (in terms of financing and an increasing 
requirement to market itself) -- or, again, the irresistible desire to 
"own" the hegemonic model. 
 
If the focus is on "individual behavior" rather than institutions, 
then theory of individual behavior is appropriate for ALL social 
disciplines.  And economists can claim to "possess" the most usable 
theory for analyzing behavior. 
 
And -- one might also suggest -- pretending that institutional and 
power structures are irrelevent is of great use to those who do not want 
to see any changes in either.  Hence the external reinforcement of what 
is essentially an internal problem. 
 
Perhaps it is as the outsider-insider that this seems obvious to me, 
and fascinating (I hear the sound of a paradigm cracking). 
 
Comments? 
-- 
Mary M. Schweitzer , Assoc. Prof., Dept. of History 
Villanova University (on medical leave since January 1995) 
Email:  <[log in to unmask]> 
URL:  http://www2.netcom.com/~schweit2/history.html 
 
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