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Date: | Thu Jul 26 10:11:49 2007 |
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An interesting fact is that (no doubt with a great deal of effort) we
can train our senses to interpret the Chaplin mask as it actually is and
not in terms of previous biases based on our historical experiences with
faces. This is also true, it seems, of our interpretation of abstract
concepts such as those used in economics.
With regard to the pollution permit problem, my argument was that the
reason Coase had so much trouble persuading the Chicagoans of the
correctness of his approach to external effects (an approach based on
his definition of a resource as a legal right to control others'
actions) is that these economists had "pre-classified" the external
effects problem as a problem in price theory. Their propensity to
pre-classify in this way presumably reflected their experiences as both
students, teachers, and researchers in economics.
Coase, studying practical problems of business and not general
equilibrium models with quantifiable variables, seems to have had weaker
experiences with price theory. One assumes that Demsetz was similar.
One might reasonably ask how much damage we do to clear thinking in
economics by introducing economics with a model of the prices of
homogeneous goods in a spaceless environment.where time is, at best,
artificial and uncertainty is nonexistent.
Could Steve have had this in the back of his mind when he posted the
link to the optical illusion video?
Pat Gunning
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