Lars P. Syll — On the irrelevance of equilibrium economics

All concepts, general statements, and theories are abstractions from experience. However, not all uses of concepts, general statements, and theories relate to experience in the same way. Historical novels are different from history in incorporating fictional. A fictional work is fundamentally different from a non-fictional one, in the that abstraction used is used imaginatively to mimic reality convincingly enough to be credible, rather than intended to represent actual facts and events.

Nicholas Kaldor suggests that equilibrium-based economics is largely imaginary and fictional.

It is generally taken for granted by the great majority of academic economists that the economy always approaches, or is near to, a state of ‘equilibrium'; that equilibrium, and hence the near-actual state of the world, provides goods and services to the maximum degree consistent with available resources, … etc., etc. — all propositions which the pure mathematical economist has shown to be valid only on assumptions that are manifestly unreal — that is to say, directly contrary to experience and not just ‘abstract.’ —Nicholas Kaldor

Lars P. Syll’s Blog
On the irrelevance of equilibrium economicsLars P. Syll | Professor, Malmo University