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Robert, I agree fully with the line of thought you have expressed.  
Although I did not write that the perfect knowledge assumption is  
merely a simplifying assumption, I agree with Brewer and you that  
it functions in this way also.   
 
Indeed, I would go further and discuss the language that is used to  
express the perfect knowledge assumption after Knight. If the  
simplifying assumption is stated in mathematical form, a whole lot  
of unnecessary effort will go into employing an industry of experts  
to teach the language and to test competency. This has far  
reaching effects, due to the thought processes people use in  
deciding whether to study economics and the costs of supplying  
credentials. Most students of economics give no deeper thought to  
why they are learning "economics" than their bank accounts and  
other immediate interests. For them the purpose of attending the  
university and majoring in economics  is to pass exams and to  
write acceptable theses. On the supply side, the cost of making  
and evaluating exams on whether the simplifying assumptions are  
used wisely is lowest if those exams are about the mathematics.  
Mathematical theses are also easier to evaluate. As a  
consequence, the industry of teaching economists becomes  
biased in the direction of mathematical language learning. This  
leads to a number of side effects. The two major ones, I think, are  
these. First, the teachers and their supervisors give the use of  
mathematics in communicating ideas to peers (i.e., in economics  
journals) undue support. Second, the use of mathematics as a  
language makes it easier to accept the counter-intuitive idea that  
the distinctly human choices of the past can be captured by the  
statistical analysis of numerical data. This, in turn, promotes a spin- 
off industry of econometrics and the accompanying set of journals  
devoted to this field.   
 
Meanwhile the issue of exactly why we use the simplifying  
assumption of perfect knowledge in the first place gets shrouded  
by a haze of mathematical and econometrics subfields. Even most  
of those who intuitively recognize the sterility of these fields are  
unable to identify what went wrong. They find it sufficient to merely  
state the obvious fact that the assumptions made in mathematical  
and econometric models are unrealistic. Moreover, they typically  
express their more realistic assumptions in mathematical form!   
 
The question asked by historians of economics about what  
constitutes "neoclassical economics" has been influenced by the  
historical development of professional economics since the  
mathematical language began to achieve an important position in  
economic education. Some HESers today associate neoclassical  
economics entirely with the mathematical expression of various  
ideas and the econometric models used to test hypotheses.  
Others, like myself, conceive also of a deeper neoclassical  
economics which has been crowded into a relatively small corner of  
the profession but which appears to be undergoing a revival of  
sorts.   
 
To get back to my point in the opening paragraph, the use of the  
perfect knowledge assumption as a counterfactual is, in my view,  
quite different from its use as a simplifying assumption. I think that  
my message stressed its use as a counterfactual, while Brewer's  
message stressed its function as a simplifying assumption. In my  
view, both uses are important in our efforts to understand economic  
interaction.   
 
Pat Gunning, Sultan Qaboos University, Oman 
 
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