Comment on Peter Radford on 'Coase and Reality’
Blog-Reference
“Criticizing the bulk of modern economics for its extraordinary lack of realism has become a tiring and unproductive exercise.” (See intro)
Really? It seems that the protagonists show no signs of tiredness. On the contrary. The Heterodox ridicule utility maximization, the Orthodox escalate with even more ridiculous rational expectations. The Heterodox point to uncertainty, the Orthodox escalate with ergodicity. The Heterodox say equilibrium is impossible, the Orthodox escalate with the outer-worldly fixpoint theorem. In the course of a lively debate, the distance from reality grows in fact exponentially. What goes wrong?
“The moral of the story is simply this: it takes a new theory, and not just the destructive exposure of assumptions or the collection of new facts, to beat an old theory.” (Blaug, 1998, p. 703)
And exactly at this crucial juncture, the differences between Orthodoxy and Heterodoxy vanish.
“... most economists neither seek alternative theories nor believe that they can be found.” (Hausman, 1992, p. 248)
Thus, the funny game goes on, with occasional regrets. “Whether it is what the rest of us need to know as we grapple with our economic issues is another matter entirely.” (See intro)
High time that ‘the rest of us’ simply leaves traditional Orthodoxy and Heterodoxy behind in their conjoint proto-scientific cul-de-sac.
Egmont Kakarot-Handtke
References
Blaug, M. (1998). Economic Theory in Retrospect. Cambridge: Cambridge University Press, 5th edition.
Hausman, D. M. (1992). The Inexact and Separate Science of Economics. Cambridge: Cambridge University Press.
