Tuesday, December 21, 2010

Supply and Demand

The iconic analysis of the economic textbook since the 19th century has been Marshall's Cross: the sloping supply and demand curves, intersecting to determine price and quantity sold, in a (metaphoric) market.

A witty geometrician might observe that the Economist has overturned Euclid, in drawing this familiar graph: instead of two points determining a line, two lines determine a point.  The joke is actually profoundly important: this economic analysis is overdetermined.  Whatever price and quantity transacted, there are always two available explanations:  supply and demand.

What one can actually observe is the price and quantity transacted.  The rest of the supply or demand curve is a counterfactual supposition: an act of imagination tempered by subjective assessments of plausibility.

The result is arguments between economists, over whose counterfactual is better.

Monday, December 20, 2010

Steve Keen

I haven't read Steve Keen's Debunking Economics, but, maybe I will, now that I am writing this blog.

Steve Keen is an Economist, and writes as an iconoclast and heretic, as much as a critic.  He advocates for the out-party Heterodox against the in-group, Orthodox.  It's a dispute I don't care about, to be honest.

Professor Keen does take seriously the fundamentals of economics, and especially the fundamentals as represented in the textbooks, particular the introductory, "Econ 101" textbooks.  That's where my critique and his may intersect, since many economic arguments in the public political discourse derive their intuition and authority from Econ 101.  The extent to which Econ 101 theory is faulty, or commonly misunderstood and misconstrued, is a real problem for the quality of the public discourse, as well as for Economics as a programme of academic research and teaching.

The simple fact that Economics can have a division between the "Orthodox" and the "Heterodox" may indicate that something is seriously wrong in the Academy.  No academic discipline can usefully admit dogma to its doctrine.  It may be useful, later, to explore a bit the epistemology of religion and science.

First Post: Purposes and Themes

I am not an economist, and really have no business writing a blog, where I pontificate on what is wrong with economics, but . . . here I am and here I blog, nevertheless.

I have great respect for the importance of economics as a subject of study and a guide to politics and policy.  Of the academic profession, I have more doubts.  I decided to write this blog, because I keep having ideas for posts that might fit on such a blog.  Maybe, the ideas will run out on me, now that I have a place to put them. 

I am going to try to maintain some reasonable standard of respect for the business of seriously considered economic ideas, and not be a complete philistine.  I intend to be a Critic, not a Crank.  It has been said that those, who cannot do, teach; and those, who will not teach, criticize.  That may well be true of me.