--- "Ross B. Emmett" <[log in to unmask]> wrote: > simply assume that the range of demands on resources exceed the resources available.< Yes, if that applies to almost all people in all cultures at all times and for any available technology, which implies that desires necessarily exceed resources no matter how much wealth or resources exist. Such axioms are the foundation for pure economic theory that applies universally to human action, thus if the premise is only for demands given today's technology and resources, it does not serve as a premise for pure (universal) theory. > Also, the simplier assumption allows us to ask questions about how economic organization in > different cultural settings create different > incentive structures for adjudicating the relation between human desires and the resources available.< The broader assumption allows us to first develop pure, universal theory. Then we can apply it to specific cases, such as some culture. Given the universal concept that people respond to incentives, then we can apply it to specific kinds of incentives. > are there axiomatic > structures which are "institution free"? I doubt it. How about the economizing premise, that people seek to maximize benefits given some cost, or minimize costs to obtain some benefit? (Note that it is utility that is maximized, not necessarily money profit.) How is that not institution-free? Without this premise, economics collapses. If you are saying that we need to pay more attention to institutions, that is indeed the case. For example, in teaching principles courses, the model of perfect competition says that all firms are price takers. The instructors and textbooks seldom ask how the price can possibly change if all actors are price takers. For that, we need to get outside the supply and demand box to real world institutions such as commodity exchanges (e.g. the Chicago Board of Trade). But very few do this. Economic theory necessarily involves institutions, but the fundamental axioms cannot be institutional. Fred Foldvary