John Medaille wrote:
> I certainly agree that Mises rejected
> equilibrium
although he used a model of equilibrium in his concept
of the "evenly rotating economy" where there is no
change. The real-world economy moves towards the
evenly rotating economy, but as conditions always
change, it is a moving and uncertain target.
>... if equilibrium
> (and hence equity) is not possible even in
> principle
It is not clear how "equity" is linked to equilibrium.
> what rationale remains for the system?
Do you mean a moral rationale?
> the basic assumptions of
> neoclassicism, namely the self-interest
> maximizing, autonomous individual.
"Neoclassicism" as in the predominant models, where
narrow self-interest is a premise for the purpose of
the model, or in its vision of reality where sympathy
for others (in the Smithian sense, i.e. Moral
Sentiments) is recognized as also a motivation?
"Autonomous" means only that an individual thinks and
feels as an independent being, not that he is socially
or economically autonomous.
> Now, the
> existence of such an individual is doubtful
in what sense?
> and
> cannot be confirmed from psychology, from
> anthropology, or from introspection.
Well, I introspect that my thinking and feeling goes
on only in my mind, and not shared by mutual telepathy
with other minds. Is that wrong?
> Hence it
> must be, logically, a pure a priori without any
> empirical foundation.
Can we not empirically verify individual thought and
feeling?
> He had the courage to treat them
> as a priori
It is a priori to any specific economic history, but
not a priori to empirical observation, since the
proposition can only come from induction from reality.
> I do believe that Mises is absolutely right about
> capitalist equilibrium; the system cannot (and
> certainly has not) delivered what it promises.
How can an economic system "promise" anything?
Only individual persons can promise.
> to reach any semblance of equilibrium,
> distributional issues will have to be taken into
> account, and distribution not merely of incomes
> but of wealth-producing assets, such as land,
> tools and education.
In my judgment, equity is orthogonal to equilibrium.
Equity is a moral concept, and any meaningful
judgments about the equity of distribution presumes an
ethic that is universal to humanity, thus independent
of culture, thus eternal and unchanging.
This universal ethic applies to economic dyanamics as
well as to equilibrium concepts.
> Neoclassicism therefore
> promises what it cannot deliver
Where does this promise come from?
Who makes it? What is the ontology?
Fred Foldvary
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