Tuesday, October 11, 2016

Peter Radford — Blind Leading the Blind

Peter Radford doesn't tell us anything more than we already know and have discussed ad nauseam. Neoclassical microeconomics assumes a possible world that does not exist. However, this world is only "possible" in the logical sense. It is not possible in a practical sense of possible because the assumptions do not accord with actual behavior and don't take culture and institutional arrangements into account. In other words, neoclassical microeconomics is a formal exercise rather than a general description.

As such neoclassical economics cannot microfound a realistic macroeconomics capable of contributing much to policy science in a real world where the challenge is to reconcile the paradoxes of liberalism arising from social, political, and economic liberalism, as well as reconciling individual freedom, egality, and community or, as Europeans call it, "solidarity."

As a logical construct, neoclassical economics is a theory of capitalism as an ideal system of self-organizing system of social, political and economic governance in which economic liberalism dominates, while culture and institutional arrangements are either ignored completely or considered to be irrelevant.

While there is nothing wrong with this as an exercise of the mind, there is a lot wrong with it when it comes to it applying practically, where it is a justification for "free market" capitalism based on unrealistic assumptions. Using an inaccurate map is liable to lead one into a ditch.

The Radford Free Press
Blind Leading the Blind
Peter Radford 

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