April 12, 2015

Bygones are bygones

Comment on ‘On the irrelevance of general equilibrium theory’


The student of economics either understands in his first course of Econ 101 that neoclassical economics is unrealistic, irrelevant, absurd, consumptive of time, senseless, dilettantish, logically defective, methodologically unacceptable, useless, etcetera etcetera, or he self-selects out of science.

When we take this mass phenomenon of adverse self-selection simply as a fact what follows? Telling people who cannot see this for themselves that equilibrium is a nonentity and that general equilibrium is zombie economics (Quiggin, 2010) is Sisyphean.

The alternative is to focus on developing the correct theory of market interaction and to fully replace the unacceptable supply-demand-equilibrium gadget (see 2015).

General equilibrium is gone. It is against the economic principle to spend more than these four words on it.*

Egmont Kakarot-Handtke

Kakarot-Handtke, E. (2015). Essentials of Constructive Heterodoxy: The Market. SSRN Working Paper Series, 2547098: 1–10. URL
Quiggin, J. (2010). Zombie Economics. How Dead Ideas Still Walk Among Us. Princeton, NJ, Oxford: Princeton University Press.

* See also here and here