[Marxism] Science and Pseudoscience

michael perelman michael at ecst.csuchico.edu
Tue Dec 27 14:25:22 MST 2005

Here is a quote from my freshman econ. instructor, an icon of 
conservative economics:

It is a "mistake to confuse the firm of [neoclassical] economic theory 
with its real-world namesake.  The chief mission of neoclassical 
economics is to understand how the price system coordinates the use of 
resources, not the inner workings of real firms." Demsetz, Harold. "The 
Structure of Ownership and the Theory of the Firm." Journal of Law 
andEconomics, 1983, 26: 2, pp. 375-90, p. 377

In other words:  The idea is to "prove that the market works" without 
looking at real markets.  That is, it is pure ideology.

You can estimate real demand curves.  Agricultural economists have been 
doing that for much of the 20th century, but often to figure out how 
much of the crop to divert from the market -- which is why "giant" 
olives are the smallest that you can buy.

Les Schaffer wrote:

> but i stare at supply and demand curves in econ texts and papers and 
> never see so much as a shred of connection with anything measured. if 
> i were an econ student now, i would ask my prof, how do i know 
> supply-and-demand is anything other than a fiction? and i am not a 
> purist, i am ok with non-measureable things in a theory. but i just 
> dont see econ -- as a quantitative, measureable, experimental science 
> -- providing any examples of this.


Michael Perelman
Economics Department
California State University
michael at ecst.csuchico.edu
Chico, CA 95929
fax 530-898-5901

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