Neoclassical Economics - Still Dead
rv...@dreamscape.com
the Sraffian criticism of long run disaggregated neoclassical general
equilibrium theory. See:
ftp://csf.colorado.edu/econ/authors/Vienneau.Robert/Sraffa3.ps
The point is to show that the neoclassical vision of value and distribution
does not follow from neoclassical premises. This value theory, as I understand
it, includes the idea that higher prices of a good will be associated with
equilibrium positions in which consumers and producers have substituted
away from as much use of that good. Once one accepts the criticism of this
general vision of value theory, one sees that the equilibrium of
supply and demand in interacting markets is unable to account for the
observed stability of income distribution and prices in industrial
economies. Footnotes point to the theories of value and distribution
that Sraffians have generally thought should replace neoclassical theory.
It short, it's a fairly classic argument, although concentrating on the
negative aspects of the controversy.
Robert Vienneau Whether strength of body or of mind, or
rv...@future.dreamscape.com wisdom, or virtue, are always found...in
proportion to the power or wealth of a man
[is] a question fit perhaps to be discussed
by slaves in the hearing of their masters,
but highly unbecoming to reasonable and
free men in search of the truth.
-- Rousseau
Mark Witte
<rv...@dreamscape.com> wrote:
>For what it's worth, I've completed my rewriting of my essay explaining
>the Sraffian criticism of long run disaggregated neoclassical general
>equilibrium theory. See:
Have you established a method by which agents are able to compare
the the utility the gain (or lose) from trade-offs they can make between
periods?
>
> ftp://csf.colorado.edu/econ/authors/Vienneau.Robert/Sraffa3.ps
>
>The point is to show that the neoclassical vision of value and distribution
>does not follow from neoclassical premises. This value theory, as I understand
>it, includes the idea that higher prices of a good will be associated with
>equilibrium positions in which consumers and producers have substituted
>away from as much use of that good.
What the heck are you talking about here? Attempting to disentangle
your grammar, I guess I'd say: sure, with less than perfectly inelastic
Hicksian demand curves, a higher price would, ceteris paribus, lead to
substitution away from the good. [OK, so I'm no grammarian either.]
Are you trying to imply that in the long run demand does not matter?
>Once one accepts the criticism of this
>general vision of value theory, one sees that the equilibrium of
>supply and demand in interacting markets is unable to account for the
>observed stability of income distribution and prices in industrial
By what metric are income distributions and prices stable and
what makes you think that the neoclassical model has anything to say about
the stability of these in stochastic environment?
>economies. Footnotes point to the theories of value and distribution
>that Sraffians have generally thought should replace neoclassical theory.
>It short, it's a fairly classic argument, although concentrating on the
>negative aspects of the controversy.
>
>Robert Vienneau Whether strength of body or of mind, or
>rv...@future.dreamscape.com wisdom, or virtue, are always found...in
> proportion to the power or wealth of a man
> [is] a question fit perhaps to be discussed
> by slaves in the hearing of their masters,
> but highly unbecoming to reasonable and
> free men in search of the truth.
> -- Rousseau
Thanks for the review of Primal Fear. I wish I could make heads or
tails out of that other post.
Markku Stenborg
>>For what it's worth, I've completed my rewriting of my essay explaining
>the Sraffian criticism of long run disaggregated neoclassical general
>equilibrium theory. See:
>
>
>The point is to show that the neoclassical vision of value and distribution
>does not follow from neoclassical premises. This value theory, as I understand
Eh? You mean that Arrow and Debreu had mistakes in their proofs? What is
"the neoclassical vision of value and distribution" anyways?
>it, includes the idea that higher prices of a good will be associated with
>equilibrium positions in which consumers and producers have substituted
>away from as much use of that good. Once one accepts the criticism of this
Eh? You mean to imply that agents do not respond to price changes? Not
even -- especially -- in the long run?
>general vision of value theory, one sees that the equilibrium of
>supply and demand in interacting markets is unable to account for the
>observed stability of income distribution and prices in industrial
>economies. Footnotes point to the theories of value and distribution
What are "the observed stability of income distribution and prices in
industrial economies"? How NC Econ cannot account for this? Or, N^2C Econ?
>that Sraffians have generally thought should replace neoclassical theory.
>It short, it's a fairly classic argument, although concentrating on the
>negative aspects of the controversy.
Markku Stenborg <mar...@utu.fi>
Take my advice, I have no use for it
Key fingerprint = 0C D5 B6 5D E8 9E 01 C0 4C 8F 7A 60 A9 A7 BA B1
rv...@dreamscape.com
>
>> ftp://csf.colorado.edu/econ/authors/Vienneau.Robert/Sraffa3.ps
>>
>>The point is to show that the neoclassical vision of value and distribution
>>does not follow from neoclassical premises. This value theory, as I understand
>
>Eh? You mean that Arrow and Debreu had mistakes in their proofs?
No.
>What is
>"the neoclassical vision of value and distribution" anyways?
Substitution and scarcity.
(I wrote "more" in one place in my paper where I meant "less" or vice versa.)
>>it, includes the idea that higher prices of a good will be associated with
>>equilibrium positions in which consumers and producers have substituted
>>away from as much use of that good. Once one accepts the criticism of this
>
>Eh? You mean to imply that agents do not respond to price changes? Not
>even -- especially -- in the long run?
No. Your reading of that suggests you do have a theory of value, though
perhaps mistaken.
>What are "the observed stability of income distribution and prices in
>industrial economies"? How NC Econ cannot account for this? Or, N^2C Econ?
Notice the scale of Chris Auld's chart, both in X and Y. Some regimes
change abruptly, but they can last for decades. Post Keynesian theory
can provide insights here without relying upon ad hoc conditions on
technology that you cannot even state. It should not need to be said
that assertions that PK theory can provide insights does not imply
that NC or N^C Econ, as Markku may be defining them, has no insights
about anything.
Care to look up this Nicholas Kaldor (RES, 1966) quote and the surrounding
controversy?
"The whole antithesis that *either* marginal productivity "must explain"
pricing and distribution *or else* there must be fixed coefficients, is
neo-classical circular reasoning carried *in extremis.* The proposition
is true but only in the abstract Wonderland of perfect competition, profit
maximization plus the etceteras specified at the beginning [including
no Sraffa effects - RLV]. [Samuelson and Modigliani's] appeal however to
the need to reconcile 'the relatively smooth functioning of behavior and
of share imputation in *observed* economic systems' is an appeal, not to
the Wonderland, but to the Real World. Can't they see that it is possible
for a market economy to be "competitive" without satisfying the
neo-classical equations? Can't they imagine a world in which marginal
productivities are *not* equal to factor prices, and are not in any
definite relationship to factor prices - a world, for example, in which,
with the approach of labor scarcity, the share of wages is falling, not
rising, despite the fact that the marginal productivity of labour is
constant or rising and Capital (in the relevant sense) is redundant in
relation to Labour? Unless they make a more imaginative effort to reconcile
their theoretical framework with the known facts of experience, their
economic theory is bound to remain a barren exercise. One is reminded of
what Clapham wrote 44 years ago: 'I have a fear lest a theory of value
which should prove permanently unable to state of what particular and
individual values some of its more important conclusions were true might
in the long run be neglected by mankind.'"
A note on terminology - as far as I know the first person to talk about
"neo-neo-classical" theory was Joan Robinson in reference to aggregrate
production functions as in Solow. I don't much about it, but some
American economists talk about "Post-Walrasian" or "Post-Classical"
economics. Perhaps this is what Markku means by neo^2 classical economics.
Different attitudes apparently go with the labels though.
Mark Witte asks similar questions, e.g.
> Are you trying to imply that in the long run demand does not matter?
No. My mature understanding of Sraffa is that he did not say that either.
Note that in my paper I specifically claim that my conclusions could result
even though the premises of the "non substitution" theorem are violated.
And since, the rate of interest is determined endogeneously in my example,
I do not assume the "non substitution" theorem either.
Neri Salvadori's "Sraffa on Demand: A Textual Analysis" is interesting on
this question. It's one step up and down from my ftp site. Pasinetti's
treatment of demand in _Structural Economic Dynamics: A Theory of the
Economic Consequences of Human Learning_ I consider to be consistent with
Salvadori's exposition of Sraffa. (Pasinetti's last chapter, on international
trade, is insightful.) Basically, I think of demand as lying outside
the Classical core (See P. Garegnani, "Value and Distribution in the
Classical Economists and Marx," _Oxford Economic Papers_, 1984), but
not therefore unimportant.
Nobody need get upset by the title of this thread. As Mark Witte well
knows, this is a follow-on to my previous thread "The Death of Neoclassical
Economics," which in turn was a joking reference to Paul Ormerod's book
_The Death of Economics_. Although I have some quibbles, I liked this
book. I think as my argument as fitting in Chapter 4 of Ormerod's argument,
although he nowhere mentions the CCC.
Are you sure you meant what you said, Markku, about accepting differences of
opinion?
Mark Witte
<rv...@dreamscape.com> wrote:
>Markku Stenborg writes:
>Mark Witte asks similar questions, e.g.
[SNIP]
>
>> Are you trying to imply that in the long run demand does not matter?
>
>No. My mature understanding of Sraffa is that he did not say that either.
Your mature understanding? So when you were a kid you had other
ideas about Sraffa? What, did your parents used to try to keep you in bed
at night by telling you scary stories about Sraffarian goons who would
come to collect over-due library books?
[SNIP]
>Basically, I think of demand as lying outside
>the Classical core (See P. Garegnani, "Value and Distribution in the
>Classical Economists and Marx," _Oxford Economic Papers_, 1984), but
>not therefore unimportant.
Yes, this was a major failing of the "classical core."
>
>Nobody need get upset by the title of this thread. As Mark Witte well
>knows, this is a follow-on to my previous thread "The Death of Neoclassical
>Economics," which in turn was a joking reference to Paul Ormerod's book
>_The Death of Economics_.
Ah, that classic Vienneauvian (Viennearial?) sense of humor! Tears
still come to my eyes when I think back to the Sraffarian policy advisors
mishandeled the Italian economy...I'm overcome, I'll just have to stop here.
rv...@dreamscape.com
one's ignorance of the literature?
Demand can be treated in Classical economics without it thereby becoming
neo-classical economics. I never made any claims about how "Sraffarian
policy advisors mishandeled the Italian economy." Of course, if one
willfully persists in illiteracy, the literature is not going to help
one learn anything anyway.
Mark Witte
Why push models with no empirical support?
Markku Stenborg
>Markku Stenborg writes:
>>
>>> ftp://csf.colorado.edu/econ/authors/Vienneau.Robert/Sraffa3.ps
>>>
>>>The point is to show that the neoclassical vision of value and distribution
>>>does not follow from neoclassical premises. This value theory, as I understand
>>
>>Eh? You mean that Arrow and Debreu had mistakes in their proofs?
>
>No.
>
>>What is
>>"the neoclassical vision of value and distribution" anyways?
>
>Substitution and scarcity.
I still don't follow your story. True, substitution and scarcity are
central ideas in Econ. You are saying that "substitution and scarcity" do
not follow from individual preference maximation?
>(I wrote "more" in one place in my paper where I meant "less" or vice versa.)
>
>>>it, includes the idea that higher prices of a good will be associated with
>>>equilibrium positions in which consumers and producers have substituted
>>>away from as much use of that good. Once one accepts the criticism of this
>>
>>Eh? You mean to imply that agents do not respond to price changes? Not
>>even -- especially -- in the long run?
>
>No. Your reading of that suggests you do have a theory of value, though
>perhaps mistaken.
All theories are mistaken, more or less.
>>What are "the observed stability of income distribution and prices in
>>industrial economies"? How NC Econ cannot account for this? Or, N^2C Econ?
>
>Notice the scale of Chris Auld's chart, both in X and Y. Some regimes
You mean the one of US wages being quite constant percentage of US GDP? I
fail to see how this is evidence against NC Econ. What in NC Econ
suggests that that share should not be relatively stable?
>change abruptly, but they can last for decades. Post Keynesian theory
>can provide insights here without relying upon ad hoc conditions on
>technology that you cannot even state. It should not need to be said
>that assertions that PK theory can provide insights does not imply
>that NC or N^C Econ, as Markku may be defining them, has no insights
>about anything.
>
>Care to look up this Nicholas Kaldor (RES, 1966) quote and the surrounding
>controversy?
>
> "The whole antithesis that *either* marginal productivity "must explain"
> pricing and distribution *or else* there must be fixed coefficients, is
> neo-classical circular reasoning carried *in extremis.* The proposition
I'm not sure what Nick is talking about, but surely, there are other
alternatives than the two possibilities indicated above: imperfect
competition, asymmetric info, transactions costs, etc. Since 1966, these
ideas have been included in NC Econ. If your barking at this, you're not
only barking at the wrong tree, the tree has been cut replaced with more
fruitfull one.
[rest of Kaldor snipped]
>A note on terminology - as far as I know the first person to talk about
>"neo-neo-classical" theory was Joan Robinson in reference to aggregrate
>production functions as in Solow. I don't much about it, but some
>American economists talk about "Post-Walrasian" or "Post-Classical"
>economics. Perhaps this is what Markku means by neo^2 classical economics.
>Different attitudes apparently go with the labels though.
My use of neo-neo refers to ideas first formally analyzed by Hurwicz and
Mirrlees in 70s; if I recall correctly, an early survey is by Reiter
(1979) AER. The point is to include asymmetric info into GE models.
>Mark Witte asks similar questions, e.g.
>
>> Are you trying to imply that in the long run demand does not matter?
>
>No. My mature understanding of Sraffa is that he did not say that either.
>Note that in my paper I specifically claim that my conclusions could result
>even though the premises of the "non substitution" theorem are violated.
>And since, the rate of interest is determined endogeneously in my example,
>I do not assume the "non substitution" theorem either.
The standard practice is to prove theorems. If you assume stuff that
implies some theorem, I guess, you could state you assume that theorem.
[snips]
>Are you sure you meant what you said, Markku, about accepting differences of
>opinion?
Yes.
rv...@dreamscape.com
>>>What is
>>>"the neoclassical vision of value and distribution" anyways?
>>
>>Substitution and scarcity.
>
>I still don't follow your story. True, substitution and scarcity are
>central ideas in Econ. You are saying that "substitution and scarcity" do
>not follow from individual preference maximation?
I cannot parse this. I am saying long run equilibrium prices are not
scarcity indices. Given technology, a comparison of equilibria may
reveal that more of a factor is demanded at a higher price, and a
technique that uses that factor more intensely may be adopted.
Likewise, firms may choose to produce more of a good when
its price is lower.
This, I thought, was clearly explained in my paper. It is also
explained in Pasinetti (1977).
I assume "individual preference maximization" in my paper
as well as cost minimization by firms.
>>>...Eh? You mean to imply that agents do not respond to price changes? Not
>>>even -- especially -- in the long run?
>>
>>No. Your reading of that suggests you do have a theory of value, though
>>perhaps mistaken.
>
>All theories are mistaken, more or less.
The primary question is one of the logical implications of assumptions, not
the more or less inaccurate fit of theory to observation.
>...You mean the one of US wages being quite constant percentage of US GDP? I
>fail to see how this is evidence against NC Econ. What in NC Econ
>suggests that that share should not be relatively stable?
(Perfectly competitive) NC theory provides no reason to believe that shares
should be stable. This is also explained in my paper Sraffa3.ps, as well as
Garegnani 1990.
>...I'm not sure what Nick is talking about, but surely, there are other
>alternatives than the two possibilities indicated above: imperfect
>competition, asymmetric info, transactions costs, etc. Since 1966, these
>ideas have been included in NC Econ. If your barking at this, you're not
>only barking at the wrong tree, the tree has been cut replaced with more
>fruitfull one.
Well, I have discovered that standard accounts of the Cambridge Capital
Controversy are wrong. Many confine the argument to capital theory and
questions of aggregation. Some suggest disaggregated NC theory is OK.
This position is mistaken, at least in what it claims the CCC to have been
about.
>My use of neo-neo refers to ideas first formally analyzed by Hurwicz and
>Mirrlees in 70s; if I recall correctly, an early survey is by Reiter
>(1979) AER. The point is to include asymmetric info into GE models.
I'm sure all this stuff is interesting - I don't know much about it. But I am
going to adopt the position of the critic who depends on the continued
existence of what he's criticizing for his justification.
I claim there's all sorts of places where NC theory - not NNC theory -
remains dominant. First, textbooks up through intro graduate,
e.g. 2nd edition Varian. Varian's last chapter does survey NNC as you
are using it. Since this is all many see of economics, they get a
deeply misleading impression. Second, microfoundations for macro often
do not take this stuff into account. Have you read Hahn and Solow's new
book on macro? This is one of their criticisms. Third, policy, or so I've
seemed claimed. Fourth, capital theory. I've just finished reading Ahmad's
1991 text. Each chapter is a different (not necessarily) compatible approach,
but they're all set in perfect competition.
Furthermore, I'm not sure neo-neo theory has a general vision to
replace NC's, which I assert is deeply problematic. For example, we
might be able to add imperfect competition, etc. to capital theory. This
will complicate it, but do we then gain something general to say
about prices and distribution?
These terms can be misleading. Neoclassical theory suggests a continuous
development from Classical theory. Sraffians say this is wrong. By
the way the term NC came from Veblen on Marshall; Marshall did his best
to disguise the discontinuities. NNC, besides being rotten English, still
suggests continuity. If your label is accurate, my critique may still
apply, although that needs to be argued. I don't feel I'm the one
to do it. I have seen one Institutionalist claim victory because of the
sorts of developments within mainstream theory that you like.
>The standard practice is to prove theorems. If you assume stuff that
>implies some theorem, I guess, you could state you assume that theorem.
I changed what I had to say about the "nonsubstitution" theorem in my
version of 17 April. Pasinetti's point is that if one assumes the premises
of the theorem are violated, one can get changes in prices, but these
changes need not be substitution.
Mark Witte
In article <v01530500ada59345e502@[206.64.128.160]>,
<rv...@dreamscape.com> wrote:
>Markku Stenborg writes:
>>>>What is
>>>>"the neoclassical vision of value and distribution" anyways?
>>>
>>>Substitution and scarcity.
>>
>>I still don't follow your story. True, substitution and scarcity are
>>central ideas in Econ. You are saying that "substitution and scarcity" do
>>not follow from individual preference maximation?
>
>I cannot parse this. I am saying long run equilibrium prices are not
>scarcity indices. Given technology, a comparison of equilibria may
>reveal that more of a factor is demanded at a higher price, and a
>technique that uses that factor more intensely may be adopted.
>Likewise, firms may choose to produce more of a good when
>its price is lower.
Speaking of parsing, what is the definition of scarcity index?
Suppose that you have a model where "a comparison of equilibria may
reveal that more of a factor is demanded at a higher price, and a technique
that uses that factor more intensely may be adopted." Is there any
empirical evidence that such behavior ever occurs? Similarly, is there
any data that supports a case where firms may choose to produced more of a
good simply because the market price has fallen? (I don't think the
discussion here is about price discrimination.)
>
>This, I thought, was clearly explained in my paper.
I guess not.
>It is also
>explained in Pasinetti (1977).
>
>I assume "individual preference maximization" in my paper
>as well as cost minimization by firms.
OK, are the intertemporal preferences of agents modeled?
>
>>>>...Eh? You mean to imply that agents do not respond to price changes? Not
>>>>even -- especially -- in the long run?
>>>
>>>No. Your reading of that suggests you do have a theory of value, though
>>>perhaps mistaken.
>>
>>All theories are mistaken, more or less.
>
>The primary question is one of the logical implications of assumptions, not
>the more or less inaccurate fit of theory to observation.
Oh, I thought from some of Mr. Vienneau's earlier posts, that
he had come around to a view that a model was a good one if it did a
good job of matching the data about the world in which we live. But
here it looks like he's saying that a good model is not one that
matches the data but is instead one that passes his test of purity of
assumptions.
>
>>...You mean the one of US wages being quite constant percentage of US GDP? I
>>fail to see how this is evidence against NC Econ. What in NC Econ
>>suggests that that share should not be relatively stable?
>
>(Perfectly competitive) NC theory provides no reason to believe that shares
>should be stable. This is also explained in my paper Sraffa3.ps, as well as
>Garegnani 1990.
>
>>...I'm not sure what Nick is talking about, but surely, there are other
>>alternatives than the two possibilities indicated above: imperfect
>>competition, asymmetric info, transactions costs, etc. Since 1966, these
>>ideas have been included in NC Econ. If your barking at this, you're not
>>only barking at the wrong tree, the tree has been cut replaced with more
>>fruitfull one.
>
>Well, I have discovered that standard accounts of the Cambridge Capital
>Controversy are wrong. Many confine the argument to capital theory and
>questions of aggregation. Some suggest disaggregated NC theory is OK.
>This position is mistaken, at least in what it claims the CCC to have been
>about.
It would be nice if Mr. Vienneau would cut to the chase. Does he
believe that neo-classical theory is mistaken at its root? Or is it just
a matter of he prefers differing sets of assumptions, assumptions that lead
to a model that seems to have no empirical support?
>
>>My use of neo-neo refers to ideas first formally analyzed by Hurwicz and
>>Mirrlees in 70s; if I recall correctly, an early survey is by Reiter
>>(1979) AER. The point is to include asymmetric info into GE models.
>
>I'm sure all this stuff is interesting - I don't know much about it. But I am
>going to adopt the position of the critic who depends on the continued
>existence of what he's criticizing for his justification.
>
So it seems that Mr. Vienneau has no workable alternative to offer.
An odd thing for someone who claims to have read Thomas Kuhn.
>I claim there's all sorts of places where NC theory - not NNC theory -
>remains dominant. First, textbooks up through intro graduate,
>e.g. 2nd edition Varian. Varian's last chapter does survey NNC as you
>are using it. Since this is all many see of economics, they get a
>deeply misleading impression. Second, microfoundations for macro often
>do not take this stuff into account. Have you read Hahn and Solow's new
>book on macro? This is one of their criticisms. Third, policy, or so I've
>seemed claimed. Fourth, capital theory. I've just finished reading Ahmad's
>1991 text. Each chapter is a different (not necessarily) compatible approach,
>but they're all set in perfect competition.
>
>Furthermore, I'm not sure neo-neo theory has a general vision to
>replace NC's, which I assert is deeply problematic. For example, we
>might be able to add imperfect competition, etc. to capital theory. This
>will complicate it, but do we then gain something general to say
>about prices and distribution?
>
>These terms can be misleading. Neoclassical theory suggests a continuous
>development from Classical theory. Sraffians say this is wrong. By
>the way the term NC came from Veblen on Marshall; Marshall did his best
>to disguise the discontinuities. NNC, besides being rotten English, still
>suggests continuity. If your label is accurate, my critique may still
>apply, although that needs to be argued. I don't feel I'm the one
>to do it. I have seen one Institutionalist claim victory because of the
>sorts of developments within mainstream theory that you like.
It doesn't seem that there's much consideration of empirical work
here. Do recall that Ptolemy's model of the solar system worked fine in
theory.
Mason A. Clark
On 27 Apr 1996 01:03:20 GMT, mwi...@casbah.acns.nwu.edu
(Mark Witte) wrote these paragraphs in a recent post:
Far be it from me to intrude into an esoteric debate between
experts, but some ideas catch my eye.
> Oh, I thought from some of Mr. Vienneau's earlier posts, that
> he had come around to a view that a model was a good one if it did a
> good job of matching the data about the world in which we live. But
> here it looks like he's saying that a good model is not one that
> matches the data but is instead one that passes his test of purity of
> assumptions.
>
It would be a cinch to construct a theory of economics that
fits any given set of data. That's an exercise in curve
fitting. Even I can handle that. Will I get a prize?
But you gotta promise not ask for my axioms; excuse me,
assumptions.
> It would be nice if Mr. Vienneau would cut to the chase. Does he
> believe that neo-classical theory is mistaken at its root? Or is it just
> a matter of he prefers differing sets of assumptions, assumptions that lead
> to a model that seems to have no empirical support?
>
Assumptions that lead to a model that has no empirical
support: step ONE in the development of a science. Now
you work on the assumptions. Can't we try to get both;
real world assumptions, good math, therefore good empirical
support. Where's the economic scientists?
---------
> It doesn't seem that there's much consideration of empirical work
> here. Do recall that Ptolemy's model of the solar system worked fine in
> theory.
>
Yeah, that's what I've been looking for. An
analogy to neoclassical economics. Thank you.
Mason Clark
Hey, would you like to see my new signature, made
up of all the names people have been called by the
literati of sci.econ? With credits of course.
P.S.#2 I wonder why the economists, neoclassical or
otherwise keep posting to an insulting thread title?
Is there a lack of creativity in their ilk?
What a nifty word ilk ilk ilk ilk
rv...@dreamscape.com
Mark Witte blathers:
: <rv...@dreamscape.com> wrote:
[...]
:>I cannot parse this. I am saying long run equilibrium prices are not
:>scarcity indices. Given technology, a comparison of equilibria may
:>reveal that more of a factor is demanded at a higher price, and a
:>technique that uses that factor more intensely may be adopted.
:>Likewise, firms may choose to produce more of a good when
:>its price is lower.
:
: Speaking of parsing, what is the definition of scarcity index?
Perhaps I am being unjust to respond to Mark Witte's posts. Dyslexia and
illiteracy are handicaps. He's not to blame for his dyslexia, at least.
: Suppose that you have a model where "a comparison of equilibria may
:reveal that more of a factor is demanded at a higher price, and a technique
:that uses that factor more intensely may be adopted." Is there any
:empirical evidence that such behavior ever occurs? Similarly, is there
:any data that supports a case where firms may choose to produced more of a
:good simply because the market price has fallen? (I don't think the
:discussion here is about price discrimination.)
At one point, I gave some indication of where to find empirical evidence.
Among Mark Witte's erroneous comments, he suggested that empirical evidence
on this issue is by definition of bad quality and that good journals should
not include it. So if he doesn't think the question worth discussing, why
does he bring it up?
Does Mark Witte still think that empirical work showing that unskilled
labor may be in higher demand at a higher wage is not germane?
:>This, I thought, was clearly explained in my paper.
:
: I guess not.
Normally, if a reader finds something unclear, it *is* unclear, and
the author needs to modify his writing. It seems like this case is an
exception.
:>It is also
:>explained in Pasinetti (1977).
:>
:>I assume "individual preference maximization" in my paper
:>as well as cost minimization by firms.
:
:OK, are the intertemporal preferences of agents modeled?
Yes.
:>>>>...Eh? You mean to imply that agents do not respond to price changes? Not
:>>>>even -- especially -- in the long run?
:>>>
:>>>No. Your reading of that suggests you do have a theory of value, though
:>>>perhaps mistaken.
:>>
:>>All theories are mistaken, more or less.
:>
:>The primary question is one of the logical implications of assumptions, not
:>the more or less inaccurate fit of theory to observation.
:
: Oh, I thought from some of Mr. Vienneau's earlier posts, that
:he had come around to a view that a model was a good one if it did a
:good job of matching the data about the world in which we live.
Wrong in any implication about any views I have ever held.
:But
:here it looks like he's saying that a good model is not one that
:matches the data but is instead one that passes his test of purity of
:assumptions.
Wrong, if Mark Witte means anything about the realism of assumptions
or their ideological properties. Correct, if Mark Witte means that a
good formal model should have conclusions that follow from the
assumptions, something often untrue of neoclassical economics.
[...]
:>Well, I have discovered that standard accounts of the Cambridge Capital
:>Controversy are wrong. Many confine the argument to capital theory and
:>questions of aggregation. Some suggest disaggregated NC theory is OK.
:>This position is mistaken, at least in what it claims the CCC to have been
:>about.
:
: It would be nice if Mr. Vienneau would cut to the chase. Does he
:believe that neo-classical theory is mistaken at its root? Or is it just
:a matter of he prefers differing sets of assumptions, assumptions that lead
:to a model that seems to have no empirical support?
It would be nice if Mark Witte could for once explicitly state where I
adopt non-neoclassical assumptions in the paper under debate, e.g. where
have I made a non-neoclassical assumption on technology? Even if Mark
Witte were competent, he could not do so because I do not.
[...]
:>I'm sure all this stuff is interesting - I don't know much about it. But I am
:>going to adopt the position of the critic who depends on the continued
:>existence of what he's criticizing for his justification.
:
: So it seems that Mr. Vienneau has no workable alternative to offer.
Wrong, and showing that Mr. Witte has no perception of irony. And an odd
thing to write for somebody who has read my remarks on PK theory, read
footnotes 1, 15, and 32 in my paper Sraffa3.ps, and occassionally
browses the Cambridge Journal of Economics, for example.
:An odd thing for someone who claims to have read Thomas Kuhn.
Wrong. Kuhn never intended the existence of a paradigm to be used as
a mechanism of social pressure to cut off debate and to defend logical
error.
[...]
: It doesn't seem that there's much consideration of empirical work
:here. Do recall that Ptolemy's model of the solar system worked fine in
:theory.
It is true that neoclassical theory was not developed based on empirical
work. It is arguably not held onto today because of empirical support.
And finally, my criticism in this thread is about logic, not empirical
work. It is not true that Post Keynesian economists, for example, do not
do empirical work or ever argue against neoclassical theorists based on
the empirical superiority of PK. It is not even true that Sraffian
models have not been used in empirical work.
It is the case that, according to Kuhn, Ptolemy's model worked fine in
practice. Copernicus did not offer any simplification of the day-to-day
calculations of astronomers, as they perceived their work for the most
part. Also, Copernicus did not offer any improvement in prediction.
See Kuhn's essay on objectivity and theory choice in his
collection _The Essential Tension_. Kuhn's essay contrasting his
views with Popper's is also interesting.
(Mason, I do not consider the thread title an insult.)
Wing Luk
Mason A. Clark (mas...@ix.netcom.com) wrote:
: On 27 Apr 1996 01:03:20 GMT, mwi...@casbah.acns.nwu.edu
: (Mark Witte) wrote these paragraphs in a recent post:
:
: Far be it from me to intrude into an esoteric debate between
: experts, but some ideas catch my eye.
: > Oh, I thought from some of Mr. Vienneau's earlier posts, that
: > good job of matching the data about the world in which we live. But
: > here it looks like he's saying that a good model is not one that
: > matches the data but is instead one that passes his test of purity of
: > assumptions.
: It would be a cinch to construct a theory of economics that
: fits any given set of data. That's an exercise in curve
: fitting. Even I can handle that. Will I get a prize?
No, you won't get a prize. Assuming the curve illustrates the path of the
economy moving towards equilibrium. Will that path be the one the economy
travels through every single time. No, of course. People are intelligent
beings and they discover, identify and change course to reach the
'equilibrium' faster and easier if there is one.
Just like streams flowing down the hill, you cannot chart its precise
course every single time. The course does change a little bit from time to
time when certain obstacles are removed. Even for rivers flowing down in
well defined course, occasionally there will be flooding because the
course it travels changes. Not to mention about our intelligent human
beings as defined in an econometric model.
Conclusion is that the study of human economic behavior has to go beyond
the neo-classical model no matter how goods it fits the past economic
data.
Mark Witte
In article <v01530501ada8bd29f75a@[206.64.128.155]>,
<rv...@dreamscape.com> wrote:
>Mark Witte blathers:
>
>: <rv...@dreamscape.com> wrote:
>[...]
>:>I cannot parse this. I am saying long run equilibrium prices
>:>are not scarcity indices. Given technology, a comparison of
>:>equilibria may reveal that more of a factor is demanded at a
>:>higher price, and a technique that uses that factor more
>:>intensely may be adopted.
>:>Likewise, firms may choose to produce more of a good when
>:>its price is lower.
>:
>: Speaking of parsing, what is the definition of scarcity
>: index?
>
>Perhaps I am being unjust to respond to Mark Witte's posts.
>Dyslexia and illiteracy are handicaps. He's not to blame for his
>dyslexia, at least.
I'm not really sure how to "parse" this. Is it just an
example of rather unoriginal 'net insults that I just shrug off
and Mason puts on his list? I am glad I've not had to try to
overcome adult illiteracy nor have I been much exposed to it. I
have had family members, students, and professors who had
difficult struggles to overcome their dyslexia but who managed to
triumph over their afflictions. From such people I have drawn
inspiration, Mr. Vienneau evidently draws some sort of mirth.
Getting back to my question, which I wouldn't put to either
dyslexia or illiteracy (or any other tragedy that Mr. Vienneau
might find amusing), I would like to see Mr. Vienneau carefully
spell out what he means by "scarcity index." By observation, it
would seem to be an invitation for him to rain down cheap shots
but I had thought it would involve some sort of ceteris paribus
comparison of opportunity costs and ways in which agents would
allocate their budgets. I would also like to see Mr. Vienneau's
definition of "long run" and what he thinks is the neoclassical
definition.
>: Suppose that you have a model where "a comparison of
>:equilibria may reveal that more of a factor is demanded at a
>:higher price, and a technique that uses that factor more
>:intensely may be adopted." Is there any empirical evidence
>:that such behavior ever occurs? Similarly, is there any data
>:that supports a case where firms may choose to produced more of
>:a good simply because the market price has fallen? (I don't
>:think the discussion here is about price discrimination.)
>
>At one point, I gave some indication of where to find empirical
>evidence. Among Mark Witte's erroneous comments, he suggested
>that empirical evidence on this issue is by definition of bad
>quality and that good journals should not include it. So if he
>doesn't think the question worth discussing, why does he bring
>it up?
Had Mr. Vienneau been anything other than vague, perhaps
intentionally so, in his previous reply, I would have pursued his
long awaited empirical references eagerly.
>
>Does Mark Witte still think that empirical work showing that
>unskilled labor may be in higher demand at a higher wage is not
>germane?
Did I mention that Mr. Vienneau is sometimes exceedingly
vague, especially when it seems to suit his purposes? Is this a
reference to the work of Card and Krueger? Or to the efficiency
wage literature? And what does this have to do with the
Sraffarian/Post Keynesian stuff Mr. Vienneau is always flogging?
Ah, vagueness.
>
>:>This, I thought, was clearly explained in my paper.
>:
>: I guess not.
>
>Normally, if a reader finds something unclear, it *is* unclear,
>and the author needs to modify his writing. It seems like this
>case is an exception.
So Sraffa3.ps is unaltered?
>
>:>It is also explained in Pasinetti (1977).
>:>
>:>I assume "individual preference maximization" in my paper
>:>as well as cost minimization by firms.
>:
>:OK, are the intertemporal preferences of agents modeled?
>
>Yes.
Just like in the "Sraffian Critique of Neoclassical Theory"
I read earlier this year?
>
>:>>>>...Eh? You mean to imply that agents do not respond to
>:>>>>price changes? Not even -- especially -- in the long run?
>:>>>
>:>>>No. Your reading of that suggests you do have a theory of
>:>>>value, though perhaps mistaken.
>:>>
>:>>All theories are mistaken, more or less.
>:>
>:>The primary question is one of the logical implications of
>:>assumptions, not the more or less inaccurate fit of theory to
>:>observation.
>:
>: Oh, I thought from some of Mr. Vienneau's earlier
>:posts, that he had come around to a view that a model was a
>:good one if it did a good job of matching the data about the
>:world in which we live.
>
>Wrong in any implication about any views I have ever held.
I apologize for making it seem that Mr. Vienneau was of the
impression that a valuable model was one that actually described
the world we see around us. Perhaps I was mislead by his
statements about how the labor theory of value provided a useful
empirical regularity and some other comments about how some model
or other matched the data. I suppose that I am now under the
impression that when Mr. Vienneau is faced with the choice of two
models, one of which that fits the data well and the other of
which does not, he will not allow these comparisons to distract
him from choose the one that most closely matches his ideological
priors.
>
>:But here it looks like he's saying that a good model is not
>:one that matches the data but is instead one that passes his
>:test of purity of assumptions.
>
>Wrong, if Mark Witte means anything about the realism of
>assumptions or their ideological properties.
Ah yes, it is not by a model's ability to explain the data
that it should be judged, but instead by whether its assumptions
appear on the approved list of "realistic" assumptions compiled
by the Grand Poobah of Methodology.
>Correct, if Mark
>Witte means that a good formal model should have conclusions
>that follow from the assumptions, something often untrue of
>neoclassical economics.
I think I recall downloading a paper that attempted to
establish just such a thing. I recall the author's name had a
familiar ring to it and that it failed in its attempt.
>
>[...]
>:>Well, I have discovered that standard accounts of the
>:>Cambridge Capital Controversy are wrong. Many confine the
>:>argument to capital theory and questions of aggregation.
>:>Some suggest disaggregated NC theory is OK.
>:>This position is mistaken, at least in what it claims the CCC
>:>to have been about.
>:
>: It would be nice if Mr. Vienneau would cut to the
>:chase. Does he believe that neo-classical theory is mistaken
>:at its root? Or is it just a matter of he prefers differing
>:sets of assumptions, assumptions that lead to a model that
>:seems to have no empirical support?
>
>It would be nice if Mark Witte could for once explicitly state
>where I adopt non-neoclassical assumptions in the paper under
>debate, e.g. where have I made a non-neoclassical assumption on
>technology? Even if Mark Witte were competent, he could not do
>so because I do not.
I believe I specified a long list of such problems when I
reviewed Mr. Vienneau's last paper. The principle problem was
that an agent's production possibilities in a given period
depended upon that agent's start of period "endowment" which was
left over from the agent's actions in the previous period, yet
no method was specified to give the agent any incentive not to
consume all the next period's endowment at the end of the
previous period.
>
>[...]
>:>I'm sure all this stuff is interesting - I don't know much
>:>about it. But I am going to adopt the position of the critic
>:>who depends on the continued existence of what he's
>:>criticizing for his justification.
>:
>: So it seems that Mr. Vienneau has no workable
>:alternative to offer.
>
>Wrong, and showing that Mr. Witte has no perception of irony.
>And an odd thing to write for somebody who has read my remarks
>on PK theory, read footnotes 1, 15, and 32 in my paper
>Sraffa3.ps, and occassionally browses the Cambridge Journal of
>Economics, for example.
If Mr. Vienneau is serious about his belief that the
PK/Sraffarian approach has something to offer to those who desire
to understand our world, it would be good if he would stop
playing such games and explicitly state what aspects of the
observed world match the predictions of his models.
>
>:An odd thing for someone who claims to have read Thomas Kuhn.
>
>Wrong. Kuhn never intended the existence of a paradigm to be
>used as a mechanism of social pressure to cut off debate and
>to defend logical error.
Kuhn recognizes the limitations to the scientific approach
to gaining knowledge but is a deep believer in the importance of
empirical testing. If Mr. Vienneau's models are unable to
explain any of the observed anomalies of the neoclassical model,
then he really has very little to say.
>
>[...]
>: It doesn't seem that there's much consideration of
>:empirical work here. Do recall that Ptolemy's model of the
>:solar system worked fine in theory.
>
>It is true that neoclassical theory was not developed based on
>empirical work.
This is foolish. It was developed by many practioners who
were looking to explain what they observed about the world around
them.
>It is arguably not held onto today because of empirical support.
Well, it certainly is not challenged by empirical support
for anything Mr. Vienneau seeks to advance.
>And finally, my criticism in this thread is about logic, not
>empirical work.
When coherent paradigms are compared, the one with the
greatest empirical support wins the followers. Hence the demise
of the Sraffarian school.
>It is not true that Post
>Keynesian economists, for example, do not do empirical work or
>ever argue against neoclassical theorists based on the empirical
>superiority of PK. It is not even true that Sraffian models have
>not been used in empirical work.
And so the findings that attracted Mr. Vienneau to this
approach are...? (Or is his fervent belief in PK/Sraffarian
economics not based upon data but upon some higher intuition?)
>
>It is the case that, according to Kuhn, Ptolemy's model worked
>fine in practice. Copernicus did not offer any simplification of
>the day-to-day calculations of astronomers, as they perceived
>their work for the most part. Also, Copernicus did not offer any
>improvement in prediction. See Kuhn's essay on objectivity and
>theory choice in his collection _The Essential Tension_. Kuhn's
>essay contrasting his views with Popper's is also interesting.
It is good of a devout PK/Sraffarian to jump to the defense
of the Ptolemaic model of the solar system. However, Ptolemy's
model had some glaring empirical failings which left it ripe for
challenge. It is true that Copernicus' concentric orbit model
did not do as good a job of matching many aspects of the data as
did Ptolemy's, but it did better on others. It was not until
Kepler's ellipse model and Newton's work on gravity that the
nails were driven into the coffin of Ptolemism, not that
Ptolemy's work did not continue to be a useful guide for many
purposes. Still, it was the ability of Copernicus to construct a
model that had internal cohesion and was able to match some
transit aspects of the data that Ptolemy's did not that gained
Copernicus followers. It is clear that Mr. Vienneau prefers the
approach taken by the PK/Sraffarians, but what empirical aspect
can they claim as their own to make anyone think that their work
describes the real world?
>
>(Mason, I do not consider the thread title an insult.)
Mason, I guess you'll make up your own mind concerning jokes
about learning disabilities and neurological disorders.
>
>Robert Vienneau
>rv...@future.dreamscape.com
Robert Vienneau
Can anybody take Mark Witte seriously? This continual misrepresentation
of his debaters views is annoying (and not confined to me).
If Markku, for instance, were to say that the issue of the empirical
superiority of Post Keynesian or Neoclassical theory were a difference
of opinion - I emphasize this is just a postulation - I would not
hound him through many posts demanding empirical demonstration for
his alleged belief in the superiority of PK. So why does Mark Witte
ask me to support my supposed belief in the labor theory of value
based on my comment that holding it as an empirical regularity is
"not absurd?" Can he not read, much less do his own research?
I have never agreed that Sraffian economics, as I have been using it
in these discussions with Mark Witte, and Neoclassical economics are
two coherent non-nested "models," must less that the decision between
these models must be based on realism of assumptions or solely on
data.
But I'll confine myself in this post to one Witte fantasy:
> >At one point, I gave some indication of where to find empirical
> >evidence. Among Mark Witte's erroneous comments, he suggested
> >that empirical evidence on this issue is by definition of bad
> >quality and that good journals should not include it. So if he
> >doesn't think the question worth discussing, why does he bring
> >it up?
>
> Had Mr. Vienneau been anything other than vague, perhaps
> intentionally so, in his previous reply, I would have pursued his
> long awaited empirical references eagerly.
Actually, I was quite specific about the following reference, which
Mark Witte ignored:
Peter Albin, "Reswitching: An Empirical Observation," _Kylos_, 1975,
Number 1, 28, pp. 149-54.
Furthermore I suggested that we need to learn Italian (based on this
quote which I did not bothering giving):
"...since I have gathered that the most active discussion, both theoretical
and empirical, on how probable the occurrence of reswitching is, has
recently been taking place in the Italian language journals - one estimate
puts the number of such papers in recent years to around seventy! I did
not have access to any of them."
-- Syed Ahmad, _Capital in Economic Theory: Neo-classical, Cambridge and
Chaos_, Edward Elgar, 1991, p. 250
I wrote:
RV> Supposedly over 50 articles in Italian journals over the last
RV>ten years.
This provoked this non-serious and bigoted reply:
MW> My Italian economist friends assure me that much quality
MW> work goes on in economics journals but that the[y] can't state with
MW> assurance that the work Mr. Vienneau cites does not also get in
MW> somewhere.
I can now produce some applied and empirical references in English
based on:
"...This possibility has been used by Hartwick (1976), Schweizer and
Varaiya (1977), Scott (1979), and Barnes and Sheppard (1984) to argue for
the possibility of "reswitching" of land uses occurring across space, that
is of one use appearing for one zone, disappearing for another, and then
reappearing at a further out location. Such reswitching could arise if
transportation costs are wage-intensive. In such a case the rent-distance
profile will be discontinuous at the switch points. If the intermediate
land use is agricultural, then there will be a discontinuous pattern of
development from the urban perspective."
-- J. Barkley Rosser, Jr., _From Catastrophe to Chaos: A General Theory
of Economic Discontinuities_, Kluwer Academic, 1991, p. 190
Barkley Rosser is referring to
John Hartwick, "Intermediate Goods and the Spatial Integration of Land
Use," _Regional Science and Urban Economics_, V. 6, pp. 127-145, 1976.
U. Schweizer and P. Varaiya, "The Spatial Structure of Production with a
Leontief Technology-II: Substitute Techniques," Regional Science and
_Urban Economics_, V. 7, pp. 293-320, 1977.
A. J. Scott, "Commodity Production and the Dynamics of Land-Use
Differentiation," _Urban Studies_, V. 16, pp. 95-104, 1979.
Trevor Barnes and Eric Sheppard, "Technical Choice and Reswitching in
Space Economies," _Regional Science and Urban Economics_, V. 14,
pp. 345-352, 1984.
Elsewhere in the same book, Barkley Rosser references:
Geir B. Asheim, "The Occurrence of Paradoxical Behavior in a Model
where Economic Activity has Environmental Effects," Norwegian School
of Economics and Business Administration Discussion Papers, 1980.
Raymond Prince and J. Barkley Rosser, Jr., "Environment Costs and
Reswitching Between Food and Energy Production in the Western United
States," mimeo, James Madison University, 1984.
Raymond Prince and J. Barkley Rosser, Jr., "Some Implications of
Delayed Environmental Costs for Benefit Cost Analysis: A Study of
Reswitching in the Western Coal Lands, _Growth and Change_, V. 16,
18-25, 1985.
So now we know that there's support by applied economists for reswitching,
can we count on Mark Witte to discard neoclassical economics?
> >Does Mark Witte still think that empirical work showing that
> >unskilled labor may be in higher demand at a higher wage is not
> >germane?
>
> Did I mention that Mr. Vienneau is sometimes exceedingly
> vague, especially when it seems to suit his purposes? Is this a
> reference to the work of Card and Krueger? Or to the efficiency
> wage literature? And what does this have to do with the
> Sraffarian/Post Keynesian stuff Mr. Vienneau is always flogging?
> Ah, vagueness.
Asked and answered many times. "Vagueness" as Mark Witte uses it
seems to be an excuse for refusing to address the question and for
disguising his finding economic theory incomprehensible
--
Robert Vienneau Whether strength of body or of mind, or
rv...@dreamscape.com wisdom, or virtue, are always found...in
proportion to the power or wealth of a
Try my Mac econ simulation man is a question fit perhaps to be
game, Bukharin, at discussed by slaves in the hearing of
ftp://csf.colorado.edu/ their masters, but highly unbecoming
econ/authors/ to reasonable and free men in search
Vienneau.Robert of the truth. -- Rousseau
Mark Witte
In article <rvien-01059...@ua19.dreamscape.com>,
Robert Vienneau <rv...@dreamscape.com> wrote:
>Can anybody take Mark Witte seriously? This continual
>misrepresentation of his debaters views is annoying (and not
>confined to me).
It is hard for some to take me seriously. I don't even set
a goal of building models that "depict the economy as having
multiple centers of power" and "an element of class struggle in
the determination of income."
Not that there is anything wrong with such goals, but it is
tiresome to see Mr. Vienneau's repeated attacks on the integrity
of mainstream economists, especially when, as in moments of
candor, he admits that is motivation is primarily ideological in
character, as noted above and elsewhere. Can Mr. Vienneau put
his finger on some aspect that what we observe about our world
that does not conform to the neoclassical model in an important
way? After a year of asking, it seems he cannot. So what
bothers him about mainstream economics? Could it be that he
feels that "that mainstream economics reflects a certain
apologetic political vision?"
So his problem with mainstream economics is not about its
failure to explain the data our world generates. It's about
ideology, but he recognizes that he won't be taken seriously if
he pushes that approach, so he must use another tactic. He
claims that modern mainstream models are logically flawed at
their root yet his attempts to demonstrate the generality of his
accusations repeatedly fall flat. As shown in the work of
economists like Burmeister (who's work I've typed out at length
on sci.econ) the internal consistency of modern neoclassical
models is well founded. Further, Mr. Vienneau seems to mistake
models for the real world (hence his failure to understand the
role of assumptions in modeling). As such, models are tools for
simplifying or abstracting what is too complicated to understand
otherwise. As such, models may be internally consistent yet
still be wrong in that they fail to do a good job of explaining
our actual world. And a failure "to do a good job" means in
comparison to alternative models. As such, it's hard to take Mr.
Vienneau seriously when his objections are based on mistaken
theoretical challenges and comparisons with models for which he
builds no compelling real world case.
>
>If Markku, for instance, were to say that the issue of the
>empirical superiority of Post Keynesian or Neoclassical theory
>were a difference of opinion - I emphasize this is just a
>postulation - I would not hound him through many posts demanding
>empirical demonstration for his alleged belief in the
>superiority of PK.
Mr. Vienneau has occasionally made references to the works
of Thomas Kuhn. I don't doubt that he's read them. However,
perhaps with more readings will come understanding about how
competing paradigms can exist and explain differing aspects of
the observed world. One paradigm's empirical regularities can be
among another paradigm's anomalies. I have merely asked what
empirical regularities attracted Mr. Vienneau to the
PK/Sraffarian schools? His non-answers lead me to think that
there aren't any and that his motivation for supporting these
other approaches does not stem from empirical or (as demonstrated
by the likes of Burmeister) theoretical objections and so must
come from some other factor. Perhaps ideology?
>So why does Mark Witte ask me to support my
>supposed belief in the labor theory of value based on my comment
>that holding it as an empirical regularity is "not absurd?" Can
>he not read, much less do his own research?
In a discussion of empirical issues concerning the relation
to productivity and wages, Mr. Vienneau suggested that the labor
theory of value was "an empirical regularity." I asked "How so?"
I'm sorry if asking Mr. Vienneau to explain his remarks
constitutes hounding.
>
>I have never agreed that Sraffian economics, as I have been
>using it in these discussions with Mark Witte, and Neoclassical
>economics are two coherent non-nested "models," must less that
>the decision between these models must be based on realism of
>assumptions or solely on data.
I tried to give Mr. Vienneau the benefit of the doubt that
the models he advances don't contain fatal internal flaws
(although careful analysis of some of his models have revealed
just such problems). Anyway, suppose that his models were
internally consistent, do they match the data in an interesting
way and a way that improves upon the match that mainstream models
give? If so, that's interesting. If not, then he's really not
got much to say. Among the losses Mr. Vienneau has suffered by
forsaking serious training in economics is his lack of education
about issues in methodology.
>
>But I'll confine myself in this post to one Witte fantasy:
>
>> >At one point, I gave some indication of where to find
>> >empirical evidence. Among Mark Witte's erroneous comments, he
>> >suggested that empirical evidence on this issue is by
>> >definition of bad quality and that good journals should not
>> >include it. So if he doesn't think the question worth
>> >discussing, why does he bring it up?
>>
>> Had Mr. Vienneau been anything other than vague, perhaps
>> intentionally so, in his previous reply, I would have pursued
>> his long awaited empirical references eagerly.
>>
>
>Actually, I was quite specific about the following reference,
>which Mark Witte ignored:
When Mr. Vienneau begins to discuss empirical issues, things
can get very strange. Watch carefully.
>
> Peter Albin, "Reswitching: An Empirical Observation," _Kylos_,
> 1975, Number 1, 28, pp. 149-54.
A citation in a widely circulated journal. Good. So is
this the "apple falling from the tree" that brought Mr. Vienneau
to his views on economics? Did he see a lot of reswitching going
on and think, "Why, we need a theory where this is a central
factor?" Not likely. How does a possible case of observed
reswitching overturn the useful of mainstream models? How would
an observed example of a Giffen good lead us to throw our
economics texts in the recycling bin? Mr. Vienneau seems to feel
that this paper is some sort of talisman that needs no
explanation. However, I'm sure I'll enjoy reading it.
>
>Furthermore I suggested that we need to learn Italian (based on
>this quote which I did not bothering giving):
>
> "...since I have gathered that the most active discussion,
> both theoretical and empirical, on how probable the occurrence
> of reswitching is, has recently been taking place in the
> Italian language journals - one estimate puts the number of
> such papers in recent years to around seventy! I did
> not have access to any of them."
> -- Syed Ahmad, _Capital in Economic Theory: Neo-classical,
> Cambridge and Chaos_, Edward Elgar, 1991, p. 250
>
>I wrote:
>
>RV> Supposedly over 50 articles in Italian journals over the
>RV>last ten years.
>
>This provoked this non-serious and bigoted reply:
>
>MW> My Italian economist friends assure me that much quality
>MW> work goes on in economics journals but that the[y] can't
>MW> state with assurance that the work Mr. Vienneau cites does
>MW> not also get in somewhere.
Whew, thanks for catching that typo. At last my true
meaning can be interpreted. So these blockbuster empirical
articles are in Italian and Mr. Vienneau admits that he has not
read them. So the real world evidence that they may contain is
clearly not what brought Mr. Vienneau to follow their paradigm.
So what did bring him to their camp? Maybe ideology?
>
>I can now produce some applied and empirical references in
>English based on:
>
> "...This possibility has been used by Hartwick (1976),
> Schweizer and Varaiya (1977), Scott (1979), and Barnes and
> Sheppard (1984) to argue for the possibility of "reswitching"
> of land uses occurring across space, that is of one use
> appearing for one zone, disappearing for another, and then
> reappearing at a further out location. Such reswitching could
> arise if transportation costs are wage-intensive. In such a
> case the rent-distance profile will be discontinuous at the
> switch points. If the intermediate land use is agricultural,
> then there will be a discontinuous pattern of development from
> the urban perspective."
> -- J. Barkley Rosser, Jr., _From Catastrophe to Chaos: A
> General Theory of Economic Discontinuities_, Kluwer Academic,
> 1991, p. 190
Ah, so in 1991, Mr. Vienneau was reading this Rosser book,
came across this passage, slapped himself across his forehead and
exclaimed, "Gad Zooks! Mainstream economics is crap!"
>
>Barkley Rosser is referring to
>
> John Hartwick, "Intermediate Goods and the Spatial Integration
> of Land Use," _Regional Science and Urban Economics_, V. 6,
> pp. 127-145, 1976.
>
> U. Schweizer and P. Varaiya, "The Spatial Structure of
> Production with a Leontief Technology-II: Substitute
> Techniques," Regional Science and _Urban Economics_, V. 7,
> pp. 293-320, 1977.
>
> A. J. Scott, "Commodity Production and the Dynamics of
> Land-Use Differentiation," _Urban Studies_, V. 16, pp. 95-104,
> 1979.
>
> Trevor Barnes and Eric Sheppard, "Technical Choice and
> Reswitching in Space Economies," _Regional Science and Urban
> Economics_, V. 14, pp. 345-352, 1984.
I think one of my neighbors even has these journals on his
office shelves. I may take the time to check them out. However,
even if they are empirical pieces, since Mr. Vienneau has not
read them, I'm not sure how he can say that they are the
compelling empirical regularities that drive his faith in the
PK/Sraffarian models.
>
>Elsewhere in the same book, Barkley Rosser references:
>
> Geir B. Asheim, "The Occurrence of Paradoxical Behavior in a
> Model where Economic Activity has Environmental Effects,"
> Norwegian School of Economics and Business Administration
> Discussion Papers, 1980.
Whoa, a 16 year old unpublished discussion paper! Well,
that's the last time I ever accept something from the mainstream!
>
> Raymond Prince and J. Barkley Rosser, Jr., "Environment Costs
> and Reswitching Between Food and Energy Production in the
> Western United States," mimeo, James Madison University, 1984.
An unpublished mimeo! And from only 12 years ago! Well,
could there be any stronger evidence?
>
> Raymond Prince and J. Barkley Rosser, Jr., "Some Implications
> of Delayed Environmental Costs for Benefit Cost Analysis: A
> Study of Reswitching in the Western Coal Lands, _Growth and
> Change_, V. 16, 18-25, 1985.
>
>So now we know that there's support by applied economists for
>reswitching, can we count on Mark Witte to discard neoclassical
>economics?
I'll have to check these out. It could be that reswitching
is more important than I thought. However, like Giffen goods,
the existence of reswitching is a theoretical possibility that
seems to be of minor importance in understanding the world around
us. Is it important for supporting the models that are close to
Mr. Vienneau's heart? If so, how so?
And as usual, requests that Mr. Vienneau support his
positions with some sort of data only result in oddness.
>
>> >Does Mark Witte still think that empirical work showing that
>> >unskilled labor may be in higher demand at a higher wage is
>> >not germane?
>>
>> Did I mention that Mr. Vienneau is sometimes exceedingly
>> vague, especially when it seems to suit his purposes? Is this
>> a reference to the work of Card and Krueger? Or to the
>> efficiency wage literature? And what does this have to do
>> with the Sraffarian/Post Keynesian stuff Mr. Vienneau is
>> always flogging? Ah, vagueness.
>
>Asked and answered many times. "Vagueness" as Mark Witte uses it
>seems to be an excuse for refusing to address the question and
>for disguising his finding economic theory incomprehensible
So, is this a reference to the work of Card and Krueger? Or
to the efficiency wage literature? And what does this have to do
with the Sraffarian/Post Keynesian stuff Mr. Vienneau is always
flogging? Ah, vagueness.
In conclusion, after reading a number of Mr. Vienneau's
models, it is clear that his objection to mainstream economics is
not based upon valid theoretical concerns nor is it based upon
some empirical success of alternative approaches. Instead, I'm
left to think that Mr. Vienneau's frequent attacks on mainstream
economists are motivated by his ideological beliefs. There's
nothing wrong with having such beliefs and they can be a valuable
guide and source of inspiration when exploring new approaches.
However, to disguise this motive and to launch unsupported
attacks on careful scholars is reprehensible. Robert Vienneau
should not take this as an attempt to squelch ideological debate,
just a request that Mr. Vienneau motivate his attacks on
mainstream economics with something beyond mere ideology.
Robert Vienneau
Despite my sig and whatever deliberately misleading statements of
opinion I have made, Mark Witte has managed to figure out my ideology.
Damn! Consistent with his Methodology, he knows that the personal
motivations of researchers are the major determining factor in deciding
whether to follow one paradigm or another. Who would ever think the
context of justification could be discussed politely and independently
of the context of discovery?
So perhaps I better stick to questions of arithmetic. Here's one for
Mark Witte:
How are wages and labor intensity related at a switch point exhibiting
capital perversity?
Frank Palmer,
If you think the "still dead" part of the thread title is insulting
and want to participate, I have no objection to changing the title. I
do object to just dropping the "still dead" because the resulting title
is already taken.
Robert Vienneau
In article <4m76rh$7...@news.acns.nwu.edu>, mwi...@casbah.acns.nwu.edu
(Mark Witte) wrote:
> >:>I cannot parse this. I am saying long run equilibrium prices
> >:>are not scarcity indices. Given technology, a comparison of
> >:>equilibria may reveal that more of a factor is demanded at a
> >:>higher price, and a technique that uses that factor more
> >:>intensely may be adopted.
> >:>Likewise, firms may choose to produce more of a good when
> >:>its price is lower.
> >:
> >: Speaking of parsing, what is the definition of scarcity
> >: index?
> >
[...]
> I would like to see Mr. Vienneau carefully
> spell out what he means by "scarcity index."
Asked and already answered.
However, I will take pity on Mark Witte.
It has been shown in the capital theoretic literature that in a
comparison of long run equilibria with the same technological
choices,
A lower rate of interest may be associated with a lower
value of capital per head.
A lower rate of interest may be associated with a lower
capital-output ratio.
A lower rate of interest may be associated with a lower
value of output per head.
The literature suggests this possibility indicates that the rate
of interest is not a scarcity index. If one thinks of interest
as the price of a factor of production called "capital" - a
position I think mistaken - this means the rate of interest is
not necessarily a scarcity index for capital. And that's how the
terminology is used in the literature.
Generalize to other factors. Then generalize to consumption.
> ...I would also like to see Mr. Vienneau's
> definition of "long run" and what he thinks is the neoclassical
> definition.
I don't need a definition as long as I confine myself to examples
that everybody accepts as "long run" positions. I do this in my
paper at my ftp site. This paper compares stationary states in
which physical flows reproduce themselves from time period to time
period. This is also true about the population, since I now confine
myself to an overlapping generations approach. Relative spot prices
are stationary. No pure economic profits exist. The rate of
interest/profit is the same in all production processes actually
in use. Thus, the composition of the capital stock is determined
within the model. No other cost-minimizing techniques exist at
the equilibrium rate of interest/profit than those employed.
[...]
> >:>This, I thought, was clearly explained in my paper.
> >:
> >: I guess not.
> >
> >Normally, if a reader finds something unclear, it *is* unclear,
> >and the author needs to modify his writing. It seems like this
> >case is an exception.
>
> So Sraffa3.ps is unaltered?
Ambiguous about dates. However, generally no. Mark Witte claimed
to have read "A Sraffian Critique of Disaggregated General
Equilibrium Theory," which is currently there now. I changed a
line or two, but I believe that my 17 April 1996 version will
stand.
> >
> >:>It is also explained in Pasinetti (1977).
> >:>
> >:>I assume "individual preference maximization" in my paper
> >:>as well as cost minimization by firms.
> >:
> >:OK, are the intertemporal preferences of agents modeled?
> >
> >Yes.
>
> Just like in the "Sraffian Critique of Neoclassical Theory"
> I read earlier this year?
No.
[...]
> >Correct, if Mark
> >Witte means that a good formal model should have conclusions
> >that follow from the assumptions, something often untrue of
> >neoclassical economics.
>
> I think I recall downloading a paper that attempted to
> establish just such a thing. I recall the author's name had a
> familiar ring to it and that it failed in its attempt.
Whatever. I now have succeeded.
> >[...]
> >:>Well, I have discovered that standard accounts of the
> >:>Cambridge Capital Controversy are wrong. Many confine the
> >:>argument to capital theory and questions of aggregation.
> >:>Some suggest disaggregated NC theory is OK.
> >:>This position is mistaken, at least in what it claims the CCC
> >:>to have been about.
I want to modify this claim that it understandable why somebody
writing about, say, 1970 might claim that the Cambridge theorists
were solely attacking aggregated capital theory. The undercurrents
I am emphasizing, however, were always there.
> >: It would be nice if Mr. Vienneau would cut to the
> >:chase. Does he believe that neo-classical theory is mistaken
> >:at its root? Or is it just a matter of he prefers differing
> >:sets of assumptions, assumptions that lead to a model that
> >:seems to have no empirical support?
> >
> >It would be nice if Mark Witte could for once explicitly state
> >where I adopt non-neoclassical assumptions in the paper under
> >debate, e.g. where have I made a non-neoclassical assumption on
> >technology? Even if Mark Witte were competent, he could not do
> >so because I do not.
>
> I believe I specified a long list of such problems when I
> reviewed Mr. Vienneau's last paper. The principle problem was
> that an agent's production possibilities in a given period
> depended upon that agent's start of period "endowment" which was
> left over from the agent's actions in the previous period, yet
> no method was specified to give the agent any incentive not to
> consume all the next period's endowment at the end of the
> previous period.
Most of the problems you found were non-existent. You did find a
glaring error in my treatment of utility theory which resulted in
my claim to be considering long run equilibria to be mistaken. So
I changed that.
So my challenge stands. Name a non-neoclassical assumption in the
current paper.
If you continue to focus on utility instead of production, I will
continue to believe you don't understand the structure of the model.
The current order of presentation in the paper is meant to emphasize
that the conceptual problems with long run neoclassical theory uncovered
by reswitching and perverse switches are not driven by assumptions on
utility.
Overlapping generations models can give rise to their own problems
with the stability of equilibria, but I deliberately do not emphasize
them.
Mark's discovery of my an error in my previous version has led me to
think that Frank Hahn's paper, "The Neo-Ricardians" is even more
misconceived than I had thought. Since treating the capital stock
as endogeneously determined is not enough to convert that model
into a long run equilibrium model, his approach has even less to
do with "Neo-Ricardism" than I had previously believed.
> If Mr. Vienneau is serious about his belief that the
> PK/Sraffarian approach has something to offer to those who desire
> to understand our world, it would be good if he would stop
> playing such games and explicitly state what aspects of the
> observed world match the predictions of his models.
The ability of capitalism to reproduce itself through time is not
explained by the bare-bones competitive neoclassical model. Similarly
the relative immobility of income distribution through long periods
of time is not explained.
I doubt I have ever referred to a Post Keynesian/Sraffian approach,
and that's deliberate.
> >It is true that neoclassical theory was not developed based on
> >empirical work.
>
> This is foolish. It was developed by many practioners who
> were looking to explain what they observed about the world around
> them.
I meant more than this, as readers of Philip Mirowski and William
Jaffe may suspect. However, here is a partial expansion of my claim:
Neoclassical economists between 1870 and, say, 1960 thought they were
drawing out the logical implications of optimizing behavior. L. Robbins
mid-thirties book on methodology is a good example. One might deny
the applicability of neoclassical theory by denying agents optimize.
But given the assumptions, substitution - a technical term - was
thought to follow.
Is this a correct summary of the history? Is the logic sound? What are
the necessary assumptions?
(Notice that Mason Clark has correctly seen that the last is a question
I have been raising.)
--
Robert Vienneau Whether strength of body or of mind, or
rv...@dreamscape.com wisdom, or virtue, are always found...in
proportion to the power or wealth of a
Try my Mac econ simulation man is a question fit perhaps to be
game, Bukharin, at discussed by slaves in the hearing of
ftp://csf.colorado.edu/ their masters, but highly unbecoming
econ/authors/ to reasonable and free men in search
Vienneau.Robert of the truth. -- Rousseau
Mark Witte
In article <rvien-02059...@ua5.dreamscape.com>,
Robert Vienneau <rv...@dreamscape.com> wrote:
>Despite my sig and whatever deliberately misleading statements of
>opinion I have made, Mark Witte has managed to figure out my ideology.
>Damn! Consistent with his Methodology, he knows that the personal
>motivations of researchers are the major determining factor in deciding
>whether to follow one paradigm or another. Who would ever think the
>context of justification could be discussed politely and independently
>of the context of discovery?
And who would think that serious economic researchers (Lucas being
one example of Mr. Vienneau's targets) would have their integrity attacted
for doing neoclassical research.
>
>So perhaps I better stick to questions of arithmetic. Here's one for
>Mark Witte:
>
> How are wages and labor intensity related at a switch point exhibiting
> capital perversity?
I'll work on it, after I figure out if it matters and after I come
up with a way to aggregate labor so that the term "labor intensity" has some
meaning.
>
>Frank Palmer,
> If you think the "still dead" part of the thread title is insulting
>and want to participate, I have no objection to changing the title. I
>do object to just dropping the "still dead" because the resulting title
>is already taken.
>
Mark Witte
>(Mark Witte) wrote:
>
>> >:>I cannot parse this. I am saying long run equilibrium prices
>> >:>are not scarcity indices. Given technology, a comparison of
>> >:>equilibria may reveal that more of a factor is demanded at a
>> >:>higher price, and a technique that uses that factor more
>> >:>intensely may be adopted.
>> >:>Likewise, firms may choose to produce more of a good when
>> >:>its price is lower.
>> >:
>> >: Speaking of parsing, what is the definition of scarcity
>> >: index?
>> >
>[...]
>> dyslexia or illiteracy (or any other tragedy that Mr. Vienneau might
>> find amusing), I would like to see Mr. Vienneau carefully
>> spell out what he means by "scarcity index." By observation, it
>> would seem to be an invitation for him to rain down cheap shots
>> but I had thought it would involve some sort of ceteris paribus
>> comparison of opportunity costs and ways in which agents would
>> allocate their budgets.
>
>
>However, I will take pity on Mark Witte.
Hmm, it looks like rain.
>It has been shown in the capital theoretic literature that in a
>comparison of long run equilibria with the same technological
>choices,
>
> A lower rate of interest may be associated with a lower
> value of capital per head.
>
> A lower rate of interest may be associated with a lower
> capital-output ratio.
>
> A lower rate of interest may be associated with a lower
> value of output per head.
>
>The literature suggests this possibility indicates that the rate
>of interest is not a scarcity index. If one thinks of interest
>as the price of a factor of production called "capital" - a
>position I think mistaken - this means the rate of interest is
>not necessarily a scarcity index for capital. And that's how the
>terminology is used in the literature.
I figured that Mr. Vienneau was thinking of this example (big
jump there) but I was hoping he would grace us with a definition. I
guess I hoped in vain. I guess I'd also like to know why this is a
more important challenge to mainstream practice that is the concept of
Giffen goods.
>
>Generalize to other factors. Then generalize to consumption.
>
>> ...I would also like to see Mr. Vienneau's
>> definition of "long run" and what he thinks is the neoclassical
>> definition.
>
>I don't need a definition as long as I confine myself to examples
So by "long run" you just mean steady state equilibrium?
>that everybody accepts as "long run" positions. I do this in my
>paper at my ftp site. This paper compares stationary states in
>which physical flows reproduce themselves from time period to time
>period. This is also true about the population, since I now confine
>myself to an overlapping generations approach. Relative spot prices
>are stationary. No pure economic profits exist. The rate of
>interest/profit is the same in all production processes actually
>in use. Thus, the composition of the capital stock is determined
>within the model. No other cost-minimizing techniques exist at
>the equilibrium rate of interest/profit than those employed.
>
>[...]
>> >:>This, I thought, was clearly explained in my paper.
>> >:
>> >: I guess not.
>> >
>> >Normally, if a reader finds something unclear, it *is* unclear,
>> >and the author needs to modify his writing. It seems like this
>> >case is an exception.
>>
>> So Sraffa3.ps is unaltered?
>
>Ambiguous about dates. However, generally no. Mark Witte claimed
>to have read "A Sraffian Critique of Disaggregated General
>Equilibrium Theory," which is currently there now. I changed a
>line or two, but I believe that my 17 April 1996 version will
>stand.
OK, the paper I read was the late December version. (My review
was posted on sci.econ in various forms under the titles "Death of
Neoclassical Economics Again" and "Sraffa3 Repost." When he titles his
posts things like "Death of Neoclassical Economics", should Mr. Vienneau
be surprised when he is derided for being unable to offer adequate support
for his positions?) Anyway, I'll probably get around to his new offering
this summer. Fun, fun, fun!
>
>> >
>> >:>It is also explained in Pasinetti (1977).
>> >:>
>> >:>I assume "individual preference maximization" in my paper
>> >:>as well as cost minimization by firms.
>> >:
>> >:OK, are the intertemporal preferences of agents modeled?
>> >
>> >Yes.
>>
>> Just like in the "Sraffian Critique of Neoclassical Theory"
>> I read earlier this year?
>
>No.
Thank God!
>
>[...]
>> >Correct, if Mark
>> >Witte means that a good formal model should have conclusions
>> >that follow from the assumptions, something often untrue of
>> >neoclassical economics.
>>
>> I think I recall downloading a paper that attempted to
>> establish just such a thing. I recall the author's name had a
>> familiar ring to it and that it failed in its attempt.
>
>Whatever. I now have succeeded.
I believe I have heard that before. Will readers of this essay
also be able to "reject with a clear conscience the claim that economics
is the study of the allocation of scarce resources among alternative uses?"
If this is claimed but again fails, I hope Mr. Vienneau will come to see
why I find his attacks on mainstream practice tiresome and driven not by
any sort of reasonable evidence but instead by his ideology.
The economic logic of the analysis was not-existent. Does
Mr. Vienneau need to have the review re-posted?
>glaring error in my treatment of utility theory which resulted in
>my claim to be considering long run equilibria to be mistaken. So
>I changed that.
>
>So my challenge stands. Name a non-neoclassical assumption in the
>current paper.
I'm sure it will make good beach reading.
>
>If you continue to focus on utility instead of production, I will
>continue to believe you don't understand the structure of the model.
>The current order of presentation in the paper is meant to emphasize
>that the conceptual problems with long run neoclassical theory uncovered
>by reswitching and perverse switches are not driven by assumptions on
>utility.
And if Mr. Vienneau continues to make fatal errors in modelling
the primary decision maker in the general equilibrium analysis, his paper
will continue to fail on this point, although this failure in no way
assures us that there are not equally serious failures elsewhere. I
do hope that this new paper will be more than just an alternative
specification or that if it is, it will give some explanation about
why this specification should be of any interest to social scientists
who endeavor to understand our world.
>
>Overlapping generations models can give rise to their own problems
>with the stability of equilibria, but I deliberately do not emphasize
>them.
>
>Mark's discovery of my an error in my previous version has led me to
>think that Frank Hahn's paper, "The Neo-Ricardians" is even more
>misconceived than I had thought. Since treating the capital stock
>as endogeneously determined is not enough to convert that model
>into a long run equilibrium model, his approach has even less to
>do with "Neo-Ricardism" than I had previously believed.
I'm sure Frank will be glad to hear that.
>> If Mr. Vienneau is serious about his belief that the
>> PK/Sraffarian approach has something to offer to those who desire
>> to understand our world, it would be good if he would stop
>> playing such games and explicitly state what aspects of the
>> observed world match the predictions of his models.
>
>The ability of capitalism to reproduce itself through time is not
>explained by the bare-bones competitive neoclassical model. Similarly
>the relative immobility of income distribution through long periods
>of time is not explained.
And these questions are explained by this alternative approach?
>
>I doubt I have ever referred to a Post Keynesian/Sraffian approach,
>and that's deliberate.
My usage was intended as the union of the two sets, not an
indication that they are the same.
>
>> >It is true that neoclassical theory was not developed based on
>> >empirical work.
>>
>> This is foolish. It was developed by many practioners who
>> were looking to explain what they observed about the world around
>> them.
>
>I meant more than this, as readers of Philip Mirowski and William
>Jaffe may suspect. However, here is a partial expansion of my claim:
>
>Neoclassical economists between 1870 and, say, 1960 thought they were
>drawing out the logical implications of optimizing behavior. L. Robbins
>mid-thirties book on methodology is a good example. One might deny
>the applicability of neoclassical theory by denying agents optimize.
>But given the assumptions, substitution - a technical term - was
>thought to follow.
>
>Is this a correct summary of the history? Is the logic sound? What are
>the necessary assumptions?
Many neoclassical economists where guided by both casual and formal
emprical work.
Markku Stenborg
In article <rvien-02059...@ua5.dreamscape.com> Robert Vienneau,
rv...@dreamscape.com writes:
[snip]
>It has been shown in the capital theoretic literature that in a
>comparison of long run equilibria with the same technological
>choices,
>
> A lower rate of interest may be associated with a lower
> value of capital per head.
>
> A lower rate of interest may be associated with a lower
> capital-output ratio.
>
> A lower rate of interest may be associated with a lower
> value of output per head.
>
>The literature suggests this possibility indicates that the rate
>of interest is not a scarcity index. If one thinks of interest
>as the price of a factor of production called "capital" - a
>position I think mistaken - this means the rate of interest is
>not necessarily a scarcity index for capital. And that's how the
>terminology is used in the literature.
>
>Generalize to other factors. Then generalize to consumption.
If I read this correctly, you are stating the following. Consider two
equilibria, A and B, of some (std. neoclassical) GE model. It can be the
case that
(1) P_ia > P_ib and Q_ia > Q_ib,
where P_ij is the price of good Q_i in equil j, and Q_ij the
corresponding equil amount consumed. Right? If so, you are right. This is
std. in neo-classical GE; no Sraffian stuff is required. Hildenbrand and
Kirman "Equilibrium Analysis" is std. GE exposition, you might want to
check that out.
We can rule this out by requiring that all goods are gross substitutes
which guarantees a unique equil. As far as I understand, there are no
economically meaningfull and realistic restrictions that could rule (1)
out; the sufficient math assumptions are easy (?) to state, but their
econ interpretation is nil.
In any event, in GE sense, prices are "scarcity indexes" relative to some
equilibrium, not accross different equil. That is, if we perturb the
chosen stable equil slightly, the "law of demand" applies, you substitute
away from more expensive good.
[snip]
Mark Witte
In article <4m9t69$c...@news.acns.nwu.edu>,
Mark Witte <mwi...@casbah.acns.nwu.edu> wrote:
>In article <rvien-01059...@ua19.dreamscape.com>,
>Robert Vienneau <rv...@dreamscape.com> wrote:
The readers of sci.econ have surely become familiar with Robert
Vienneau's frequent attacks on mainstream economics and and researchers
who do work in this area. He has commonly suggested that such researchers,
given the failings he suggests are pervasive in their approach, are
motivated only by ideology. However, Vienneau's theoretical critiques
have been repeatedly been exposed for their errors, and even when not
internally flawed represent not contradictions to the methodologies of
mainstream economics but instead alternative approaches, weak ones at
that. How so? Well, do they have anything to do with the real world?
When asked to present empirical evidence to support his preferred models,
Mr. Vienneau tends to reply in ways that can only be described as a bit
strange to those who are familiar with empirical work.
In a recent post, Mr. Vienneau claimed to have come up with
a list of "some applied and empirical references" which would support
his models. I happened to spend a little time this afternoon following
these references up and it has become clear that not only do none of
these papers provide any serious empirical support for the importance
or even the existence of reswitching but also that Robert Vienneau
couldn't tell an empirical paper from _The Daily Worker_.
Consider:
>>But I'll confine myself in this post to one Witte fantasy:
>>
>>> >At one point, I gave some indication of where to find
>>> >empirical evidence. Among Mark Witte's erroneous comments, he
>>> >suggested that empirical evidence on this issue is by
>>> >definition of bad quality and that good journals should not
>>> >include it. So if he doesn't think the question worth
>>> >discussing, why does he bring it up?
>>>
>>> Had Mr. Vienneau been anything other than vague, perhaps
>>> intentionally so, in his previous reply, I would have pursued
>>> his long awaited empirical references eagerly.
>>
>>Actually, I was quite specific about the following reference,
>>which Mark Witte ignored:
>
> When Mr. Vienneau begins to discuss empirical issues, things
>can get very strange. Watch carefully.
>
>> Peter Albin, "Reswitching: An Empirical Observation," _Kylos_,
>> 1975, Number 1, 28, pp. 149-54.
This paper has the word "empirical" in the title, but that's about it.
He presents a little model of how reswitching might occur in the lumber
industry in the choice of tractors and horses where environmental repair is
a concern. Then he gets to the section entitled "Empirical Notes."
I quote: "A check with the officers at a major lumbering company produced
evidence in support of the interpretations given here...." That's basically
it, no numbers, no statisical tests, just a discussion of the relative
merits of using bulldozers verses "(shades of Montgolfier)...balloons."
With empirical support like this, no wonder Mr. Vienneau is such
a firm believer.
[By the way, for an avid 'net spell checker like Mr. Vienneau, it should
be noted that the title of the journal is _Kyklos_.]
Right, applied and empirical references. Let's go.
>>English based on:
>>
>> "...This possibility has been used by Hartwick (1976),
>> Schweizer and Varaiya (1977), Scott (1979), and Barnes and
>> Sheppard (1984) to argue for the possibility of "reswitching"
>> of land uses occurring across space, that is of one use
>> appearing for one zone, disappearing for another, and then
>> reappearing at a further out location. Such reswitching could
>> arise if transportation costs are wage-intensive. In such a
>> case the rent-distance profile will be discontinuous at the
>> switch points. If the intermediate land use is agricultural,
>> then there will be a discontinuous pattern of development from
>> the urban perspective."
>> -- J. Barkley Rosser, Jr., _From Catastrophe to Chaos: A
>> General Theory of Economic Discontinuities_, Kluwer Academic,
>> 1991, p. 190
>
> Ah, so in 1991, Mr. Vienneau was reading this Rosser book,
>came across this passage, slapped himself across his forehead and
>exclaimed, "Gad Zooks! Mainstream economics is crap!"
>
>>
>>Barkley Rosser is referring to
>>
>> John Hartwick, "Intermediate Goods and the Spatial Integration
>> of Land Use," _Regional Science and Urban Economics_, V. 6,
>> pp. 127-145, 1976.
This article contains a story about 19th century US and
European population densities and land use, but no real empirical
work. It's basically a von Thunen type model with land used in
the usual place of capital in reswitching models.
>>
>> U. Schweizer and P. Varaiya, "The Spatial Structure of
>> Production with a Leontief Technology-II: Substitute
>> Techniques," Regional Science and _Urban Economics_, V. 7,
>> pp. 293-320, 1977.
Zero empirical content.
>>
>> A. J. Scott, "Commodity Production and the Dynamics of
>> Land-Use Differentiation," _Urban Studies_, V. 16, pp. 95-104,
>> 1979.
Zero empirical content.
>>
>> Trevor Barnes and Eric Sheppard, "Technical Choice and
>> Reswitching in Space Economies," _Regional Science and Urban
>> Economics_, V. 14, pp. 345-352, 1984.
>
Zero empirical content. And like the rest, basically a von Thunen
model with land instead of capital.
>
>>
>>Elsewhere in the same book, Barkley Rosser references:
>>
>> Geir B. Asheim, "The Occurrence of Paradoxical Behavior in a
>> Model where Economic Activity has Environmental Effects,"
>> Norwegian School of Economics and Business Administration
>> Discussion Papers, 1980.
>
> Whoa, a 16 year old unpublished discussion paper! Well,
>that's the last time I ever accept something from the mainstream!
>
>>
>> Raymond Prince and J. Barkley Rosser, Jr., "Environment Costs
>> and Reswitching Between Food and Energy Production in the
>> Western United States," mimeo, James Madison University, 1984.
>
> An unpublished mimeo! And from only 12 years ago! Well,
>could there be any stronger evidence?
>
>> Raymond Prince and J. Barkley Rosser, Jr., "Some Implications
>> of Delayed Environmental Costs for Benefit Cost Analysis: A
>> Study of Reswitching in the Western Coal Lands, _Growth and
>> Change_, V. 16, 18-25, 1985.
Whew, this weak piece is basically just a replay of Samuelson's
present value model of reswitching of labor without capital. And again,
zero empirical content.
>>So now we know that there's support by applied economists for
>>reswitching, can we count on Mark Witte to discard neoclassical
>>economics?
So now we know that there's zero emprical support even where
Mr. Vienneau claims there is, should be send him an autographed copy
of _Capitalism and Freedom_?
Robert Vienneau
> In article <rvien-02059...@ua5.dreamscape.com> Robert Vienneau,
> rv...@dreamscape.com writes:
>
> [snip]
>
> >It has been shown in the capital theoretic literature that in a
> >comparison of long run equilibria with the same technological
> >choices,
> >
> > A lower rate of interest may be associated with a lower
> > value of capital per head.
> >
> > A lower rate of interest may be associated with a lower
> > capital-output ratio.
> >
> > A lower rate of interest may be associated with a lower
> > value of output per head.
> >
> >[...]this means the rate of interest is
> >not necessarily a scarcity index for capital.
> >
> >Generalize to other factors. Then generalize to consumption.
>
> If I read this correctly, you are stating the following. Consider two
> equilibria, A and B, of some (std. neoclassical) GE model. It can be the
> case that
>
> (1) P_ia > P_ib and Q_ia > Q_ib,
>
> where P_ij is the price of good Q_i in equil j, and Q_ij the
> corresponding equil amount consumed. Right?
I think I'm saying something more, although I'm not clear what. For
example, I think what you are talking about can arise in pure exchange
models. I'm talking about the theory of production. The Sraffian model
of production has important connections in the history of thought to
Classical economics. But whether from a purely analytical neoclassical
point of view, production is a unneeded complication might be questioned.
> If so, you are right. This is
> std. in neo-classical GE; no Sraffian stuff is required. Hildenbrand and
> Kirman "Equilibrium Analysis" is std. GE exposition, you might want to
> check that out.
I think it remains a research question what the connections are between
Sraffian economics and the stuff you are talking about. Sraffians can
at least claim priority. I haven't even read Hahn and Arrow yet, but I'll
add yours to my to do list.
> We can rule this out by requiring that all goods are gross substitutes
> which guarantees a unique equil. As far as I understand, there are no
> economically meaningfull and realistic restrictions that could rule (1)
> out; the sufficient math assumptions are easy (?) to state, but their
> econ interpretation is nil.
I think they took a couple decades to state, or at least to understand
how strong they were. E.g. one can create realistic counterexamples
by just slightly relaxing some of the assumptions. This is really
beyond me. I've seen English language presentations close to yours,
but have not yet bothered to wade through the incomprehensible
version.
One neoclassical economist, (Hatta 1976), argues that capital perversity
is related to complementarity across time in production, but I am unsure
of the relation of this use of "complementarity" to violations of
your "gross substitutability." Hatta's article is tough sledding as
well.
An example of reswitching and therefore capital perversity might arise
as follows. In software, the testing phase follows design and
implementation, which follows requirements. Some testing methodologies
are related to requirements. I.e. it might be the case that the
application of a specific testing methodology requires more person-hours
to be expended in both testing and requirements. There might be another
method of producing a software product of the same quality and functionality
that requires more effort to be expended in design and implementation.
(I cannot point to any actual empirical data, this is a plausible
just-so story.) Then it could be the case that one method is cheaper
at high and low interest rates, while the other method is cheaper at
intermediate rates.
> In any event, in GE sense, prices are "scarcity indexes" relative to some
> equilibrium, not accross different equil. That is, if we perturb the
> chosen stable equil slightly, the "law of demand" applies, you substitute
> away from more expensive good.
I do know that there's disagreement here. I deny the law of demand
follows. The best reference, and more general than my discussion, is:
(Pasinetti 1977a) --, "On 'Non-substitution' in Production Models,"
Cambridge Journal of Economics, V. 1, pp. 389-394, 1977 (reprinted in
Steedman 1988).
If you look at my paper,
ftp://csf.colorado.edu/econ/authors/Vienneau.Robert/Sraffa3.ps
though, you will find that my example is argued not to be a stable
equilibrium. I think it an open question whether a switch point exhibiting
"capital perversity" - my three conditions above - can be stable in a long
run neoclassical equilibrium. Here's what I had to say about this:
So this example shows a neoclassical model in which an equilibrium exists
in which neither wages nor rates of interest act as scarcity indices. The
failure of the rate of interest to act as a scarcity index seems to be
related to an analogous failure for wages. In the multiple equilibria
example, the equilibrium at the perverse switch point...seems unstable. A
slightly lower rate of profits will be associated with more saving than
investment. A fortiori, slightly higher wages will be associated with more
demand for labor than supply. A disequilibrium fall in the rate of profits
and rise in wages seems likely to result, although a complete stability
analysis can not be performed with only the analytical techniques used
here (19). It is not clear that all perverse switches will be unobservable
because of stability considerations (20). The example in Footnote 5 in
Pasinetti (1966) suggests that some perverse switches can in fact be stable.
(19) Neither short run considerations nor Keynesian effective demand
questions have been examined, for example. Garegnani (1990) discusses the
stability implications of reswitching and capital reversing for short run
general equilibrium models.
(20) Ahmad (1991) briefly reviews some arguments about this question.
The references consist of:
(Ahmad 1991) Syed Ahmad, Capital in Economic Theory: Neoclassical,
Cambridge, and Chaos, Edward Elgar, 1991.
(Garegnani 1990) --, "Quantity of Capital," in The New Palgrave: Capital
Theory, edited by John Eatwell, Murray Milgate, and Peter Newman,
Macmillan, 1990.
(Hatta 1976) Tatsuo Hatta, "The Paradox in Capital Theory and
Complementarity of Inputs," Review of Economic Studies, V. 43,
pp.127-42, 1976.
(Pasinetti 1966) Luigi L. Pasinetti, "Changes in the Rate of Profit and
Switches of Technique," Quarterly Journal of Economics, V. 80, pp.503-17,
1966 (reprinted in Steedman 1988).
Pasinetti (1966) presents a diagram illustrating a succession of switch
points at different rates of interest of which only the first is not
perverse. He doesn't give data generating these wage-rate of profits
frontiers, alough the possibility of their existence seems pretty obvious
to me. I do not see how only the first switch point can be stable, but
then there are dimensions not obvious in the diagrams. Perhaps saddle
points work into it somehow.
Ahmad references a tentative Burmeister claim about the (in)stability
of perverse switch points.
I hope you're clear on the differences between intertemporal equilibria
(Debreu 1959), which I believe is the standard framework used for the
sort of stability analysis which you are talking about, and long-run
equilibria, which was the standard framework for the Cambridge
Capital Controversy.
Anyway, I am considering perturbations in the model parameters defining
the equilibrium. E.g. I keep technology the same, but perturb a parameter
in the utility functions. I have thought that it might be interesting
to simulate the short-run response in my example to a perturbation of the
variables defined by equilibrium, e.g. the labor supply. The problem is
I know overlapping generations models can be unstable anyway, so I'm not
sure how to detect the influence of the perverse switch.
Anyways, I think the following might be publishable:
(A) The creation of a complete and simple example of a neoclassical
model with a stable and perverse switch point.
Or
(B) A definitive proof that (A) is impossible.
And
(C) A clear exposition of the relationships, if any, between the
Cambridge Capital Controversy and stability analysis of GE
models.
If you want, Markku, go to it.
Robert Vienneau
In his usual surreal fashion, Mark Witte wrote:
> I think one of my neighbors even has these journals on his
> office shelves. I may take the time to check them out. However,
> even if they are empirical pieces, since Mr. Vienneau has not
> read them, I'm not sure how he can say that they are the
> compelling empirical regularities that drive his faith in the
> PK/Sraffarian models.
Of course, I did not claim that empirical evidence for the
existence of reswitching or capital perversity "is the compelling
empirical regularit[y]" that should decide whether or not Sraffian
economics has anything to say about anything. I have always asserted
that the interesting empirical questions about Post Keynesian and
Neoclassical economics lie in different issues about savings and
investments.
Of course, once Mark Witte thought he might be confronted with
the evidence of applied economists he immediately rejected empiricalism:
> A citation in a widely circulated journal. Good. So is
> this the "apple falling from the tree" that brought Mr. Vienneau
> to his views on economics? Did he see a lot of reswitching going
> on and think, "Why, we need a theory where this is a central
> factor?" Not likely. How does a possible case of observed
> reswitching overturn the useful of mainstream models? How would
> an observed example of a Giffen good lead us to throw our
> economics texts in the recycling bin?
As I have pointed out before, the analogy to Giffen goods fails.
Competent economists can explain how Giffen goods arise, why one
might look for them among staple foodstuffs in diets among
less developed nations, and why they should be rare. Reswitching
cannot be explained so easily. If labor and capital were too
exhibit those perversities whose possibility is shown in
Cambridge models, economists would not be justified in refusing
to modify their theories
Given Mark Witte's weak abilities with language - he can never
summarize my posts accurately and I have often found his accounts
of published literature bizarre - I cannot trust his account of any
papers I have not read. Since I explicitly stated I had not read the
work of applied economists I referred him too - I don't have ready
access to the journals even if I could spell them - I have difficulty
for understanding any rational justification for this ad hominem:
> I happened to spend a little time this afternoon following
> these references up and it has become clear that not only do none of
> these papers provide any serious empirical support for the importance
> or even the existence of reswitching but also that Robert Vienneau
> couldn't tell an empirical paper from _The Daily Worker_.
[...]
> So now we know that there's zero emprical support even where
> Mr. Vienneau claims there is, should be send him an autographed copy
> of _Capitalism and Freedom_?
Thank you, if you want. But I already have a well-read copy of
_Capitalism and Freedom_ on my shelves and an autographed letter from
Milton Friedman to me. It's one of my prize possessions.
Robert Vienneau
I wrote:
>> So perhaps I better stick to questions of arithmetic. Here's one for
>> Mark Witte:
>>
>> How are wages and labor intensity related at a switch point exhibiting
>> capital perversity?
Mark Witte refused to answer what I thought was a rather simple question.
One sees how this works. When I use the vernacular, I am "vague" and it
is not clear what this has "to do with the Sraffarian/Post Keynesian stuff
Mr. Vienneau is always flogging." When I investigate a technical question
Mr. Witte cannot comprehend. Instead, despite all his pronouncements on
Methodology, he can somehow determine what questions are important a priori
before doing the arithmetic. Despite this inability or refusal, he thinks
himself competent to make laughable pronouncements such as "Vienneau's
theoretical critiques have been repeatedly been exposed for their errors,"
"it's hard to take Mr. Vienneau seriously when his objections are based on
mistaken theoretical challenges and comparisons with models for which he
builds no compelling real world case," and "He claims that modern
mainstream models are logically flawed at their root yet his attempts to
demonstrate the generality of his accusations repeatedly fall flat." I
think Mr. Witte exemplifies John McCarthy's sig.
So I'll answer my own trivial question:
Higher wages may be associated with the selection of a more
labor-intensive technique.
I think the analogy between questions of labor aggregation and the questions
about the meaning of "capital" raised by the Cambridge critics fails.
Even if one does not accept this belief, Mark Witte's objection that
the question presumes an ability to construct an aggregate measure of
labor intensity is, as one might expect, incorrect.
It is certainly simpler to deal with homogeneous labor, but inessential
for Cambridge models.
Suppose n types or qualities of labor exist. Then, given certain technical
assumptions, the wage-rate of profits frontier becomes an n dimensional
surface in an n+1 dimensional space. Given wages for all kinds
of labor but one, say, unskilled labor, one obtains a slice of that
surface looking something like the usual 2-D wage-rate of profits frontier.
This frontier can exhibit reswitching and the usual perverse switches.
Thus, a higher wage for unskilled labor may be associated with a switch
to a choice of technique which uses unskilled labor more intensely.
That is, - note this Frank Palmer - more unskilled labor may be demanded
at a higher wage.
It is left as an exercise to those readers who believe equilibria comparisons
apply directly to the world to determine how this relates to the empirical
literature.
I do not recall ever attacking the "intellectual integrity" of Robert Lucas.
I do recall Mark Witte pointing me to Burmeister's answers to the Cambridge
critique and Mark Witte quoting various Burmeister polemics. But I recall
it was myself that explained Burmeister's regularity condition in intuitive
terms. To this day, Mark Witte cannot explain the technical content of
Burmeister's work, despite his fantasies.
Another Mark Witte post left me drop-jawwed. I began this thread with:
> >For what it's worth, I've completed my rewriting of my essay explaining
> >the Sraffian criticism of long run disaggregated neoclassical general
> >equilibrium theory. See:
> >
> > ftp://csf.colorado.edu/econ/authors/Vienneau.Robert/Sraffa3.ps
> >
Mark Witte responded to this original post and told me in another thread
that he had read my rewrite, even to the extent of getting its changed
title correct. Now he tells me he hasn't.
What am I to make of this? That Mark Witte suffers amnesia? That he is
a collective using a single account? Of course, this is not the first time
that he has gone into lenghtly discussions about why some piece is
mistaken, and then revealed that he had not read the piece and had no idea
of what he was talking about.
Mark Witte
In article <rvien-04059...@ua7.dreamscape.com>,
Robert Vienneau <rv...@dreamscape.com> wrote:
>I wrote:
>
>>> So perhaps I better stick to questions of arithmetic. Here's
>>> one for Mark Witte:
>>>
>>> How are wages and labor intensity related at a switch point
>>> exhibiting capital perversity?
>
>Mark Witte refused to answer what I thought was a rather simple
>question.
I certainly did not refuse to answer the question and the
fact that Mr. Vienneau chose to delete my reply is highly
instructive of his tactics. So as to cut short his usual reply
to being caught at his "delete and mischaracterize" game, my
reaction to his challenge was only three lines long, so Mr.
Vienneau cannot claim he deleted it only to keep posts from
growing to some great length. When Mr. Vienneau complains about
something that he has deleted from the thread, readers can be
assured that he is at his games.
My reply was fairly contemptuous of Mr. Vienneau's attempt
to shift the debate away from whether his preferred methodology
had any merit for explaining the world in a way that mainstream
analysis does not. I said I would work on it and then mimicked
the sorts of generally irrelevant caveats that Mr. Vienneau
delights in raising when other are discussing applied economic
issues on this group. My exact words:
I'll work on it, after I figure out if it matters and
after I come up with a way to aggregate labor so that
the term "labor intensity" has some meaning.
Given Mr. Vienneau's diversionary tactic here, and given the
problem that this game he has set up certainly has a flexible
standard for solution where the flexibility is all his as the
questioner, my intention was to compose a tight answer that would
stand up to any silly side issues he would wish to raise (recall
the way he tried to wriggle out of positions expressed in his
Sraffa3.ps paper when their errors were exposed). The answer Mr.
Vienneau did give was the simple:
Higher wages may be associated with the selection of a
more labor-intensive technique.
What would he have said if I had posted this? Who knows?
He probably would have pointed out that he prefaced the question
with "So perhaps I better stick to questions of arithmetic" and
them pronounced me as unable to read or as unfamiliar with the
term "arithmetic."
Getting back to the subject of this thread, "Neoclassical
Economics - Still Dead", are there any well documented examples
from our world where higher real wages lead to more labor
intensive techniques? Or is Mr. Vienneau just trying to waste
our time?
[I am aware that Mr. Vienneau wishes to deflect criticism that he
is being insulting and too negative by his choice of this title
for the thread and that he just picked it as a joke and a play
off of a book title. Wacky guy, he must great at parties.]
>
>One sees how this works. When I use the vernacular, I am
>"vague"
No, when Mr. Vienneau doesn't give references or when he
doesn't define his terms after being asked to do so, he is being
vague. I hope that is clear enough.
Speaking of Mr. Vienneau being vague, I have several times
asked him to define his terms when he makes is frequent claim
that "long run equilibrium prices are not scarcity indices." On
more than one occasion I've asked him to explain himself in an
economic sense that "would involve some sort of ceteris paribus
comparison of opportunity costs and ways in which agents would
allocate their budgets." If he wishes to continue to avoid
attaching defined meaning to his worlds, I can well understand
why, but then he cannot complain when it is pointed out that he
is vague.
In stead of definitions, he gives examples of capital
perversity and fends off queries on his meaning of long run (as
something differentiated presumably from some short run) with
statements like:
I don't need a definition as long as I confine myself
to examples that everybody accepts as "long run"
positions.
Great, huh?
>and it is not clear what this has "to do with the
>Sraffarian/Post Keynesian stuff Mr. Vienneau is always
>flogging."
As it often is not.
>When I investigate a technical question Mr. Witte cannot
>comprehend.
Certainly comprehension is often lacking. As an example,
when I pointed out a purely conceptual failing in Mr. Vienneau's
"A Sraffian Critique of Neoclassical Theory", his reply was that
my math was wrong. Since math never came into either his error
or my critique, his answer was a complete non sequitor and showed
his utter lack of understanding of basic issues in constructing a
model. This wasn't even something as simple as failing to
understand that the tools of continuous calculus don't apply at
the kink in a Leontief function, there really was no math in the
matter at all.
[Note: Mr. Vienneau's above quote appears truncated. I assure
the reader that the sentence is in its original form.]
>Instead, despite all his
>pronouncements on Methodology, he can somehow determine what
>questions are important a priori before doing the arithmetic.
>Despite this inability or refusal, he thinks himself competent
>to make laughable pronouncements such as "Vienneau's
>theoretical critiques have been repeatedly been exposed for
>their errors,"
Reference: Vienneau, Robert L. "A Sraffian Critique of
Neoclassical Theory", 23 December 1995.
>"it's hard to take Mr. Vienneau seriously when
>his objections are based on mistaken theoretical challenges and
>comparisons with models for which he builds no compelling real
>world case,"
Speaking of which, is there a smidgen of evidence that the
models Mr. Vienneau advocates match any interesting aspects of
the data? I don't really expect him to actually come up with any
such exmaples, but in the past the failures of his attempts have
at least generated some mirth.
>and "He claims that modern mainstream models are
>logically flawed at their root yet his attempts to demonstrate
>the generality of his accusations repeatedly fall flat." I
>think Mr. Witte exemplifies John McCarthy's sig.
>
>So I'll answer my own trivial question:
>
> Higher wages may be associated with the selection of a more
> labor-intensive technique.
>
>I think the analogy between questions of labor aggregation and
>the questions about the meaning of "capital" raised by the
>Cambridge critics fails.
>
>Even if one does not accept this belief, Mark Witte's objection
>that the question presumes an ability to construct an aggregate
>measure of labor intensity is, as one might expect, incorrect.
>
>It is certainly simpler to deal with homogeneous labor, but
>inessential for Cambridge models.
>
>Suppose n types or qualities of labor exist. Then, given certain
>technical assumptions, the wage-rate of profits frontier becomes
>an n dimensional surface in an n+1 dimensional space. Given
>wages for all kinds of labor but one, say, unskilled labor, one
>obtains a slice of that surface looking something like the usual
>2-D wage-rate of profits frontier.
Ah, but does this account for the substituability of
differing forms of labor for one another in the same technology?
>
>This frontier can exhibit reswitching and the usual perverse
>switches. Thus, a higher wage for unskilled labor may be
>associated with a switch to a choice of technique which uses
>unskilled labor more intensely.
>
>That is, - note this Frank Palmer - more unskilled labor may be
>demanded at a higher wage.
>
>It is left as an exercise to those readers who believe
>equilibria comparisons apply directly to the world to determine
>how this relates to the empirical literature.
>
>I do not recall ever attacking the "intellectual integrity" of
>Robert Lucas.
Reference: The sci.econ thread on "Do High Interest Rates
Cause Inflation."
>I do recall Mark Witte pointing me to Burmeister's answers to
>the Cambridge critique and Mark Witte quoting various Burmeister
>polemics.
Mr. Vienneau accuses Burmeister of launching polemics? Does
he recall the name of this thread? "Neoclassical Economics -
Still Dead."
>But I recall it was myself that explained Burmeister's
>regularity condition in intuitive terms. To this day, Mark Witte
>cannot explain the technical content of Burmeister's work,
>despite his fantasies.
Here and in many other places, Mr. Vienneau holds to strong
views that run counter to reality. Well, if they help him get to
sleep at night, then who's to blame him for his bad habits?
>
>Another Mark Witte post left me drop-jawwed. I began this thread
That's interesting, I sort of imagine Mr. Vienneau going
about slack-jawed most of the time.
>with:
>
>> >For what it's worth, I've completed my rewriting of my essay
>> > explaining the Sraffian criticism of long run disaggregated
>> > neoclassical general equilibrium theory. See:
>> >
>ftp://csf.colorado.edu/econ/authors/Vienneau.Robert/Sraffa3.ps
>> >
>
>Mark Witte responded to this original post and told me in
>another thread that he had read my rewrite, even to the extent
>of getting its changed title correct. Now he tells me he hasn't.
This is a fabrication on the part of Mr. Vienneau. I made
is perfectly clear that I had read the 23 December 1995 version
of his Sraffa3.ps, entitled "A Sraffian Critique of Neoclassical
Theory." It's errors were grave as I explained in my review of
it posted on sci.econ. I cannot make a guess as to what Mr.
Vienneau means about getting titles correct.
>
>What am I to make of this? That Mark Witte suffers amnesia? That
>he is a collective using a single account? Of course, this is
>not the first time that he has gone into lenghtly discussions
>about why some piece is mistaken, and then revealed that he had
>not read the piece and had no idea of what he was talking about.
This is yet another fabrication on the part of Mr. Vienneau.
And an ironic one at that considering how on this thread his
recent claims about the the empirical content of various
references were exposed to be empty.
Having read the 23 December 1995 version and spotting a
laundry list of errors in it, it would be remarkable if Mr.
Vienneau had now come to have any idea what he himself is talking
about in his new paper. But summer is coming and I will soon
find out. Don't worry, I won't keep the results to myself.
In the mean time, given the theoretical soundness of
mainstream models, does Mr. Vienneau have any reason to think
that the Sraffarian and Post-Keynesian boilerplate he likes to
drop on sci.econ has any support in terms of what we see in the
world around us? And if not, is there nothing we can do to be
spared his purely idiologically driven haranges?
Mark Witte
In article <rvien-04059...@ua7.dreamscape.com>,
Robert Vienneau <rv...@dreamscape.com> wrote:
What does Robert Vienneau say about neoclassical economics
and those who work with it? Well, he does like launching threads
with names like "Neoclassical Economics - Still Dead" and "The
Death of Neoclassical Economics." Further, he likes to make
statements like the following:
"There is neither theoretical nor empirical foundation for
the claim that the interest rate is equal to the marginal
product of capital. This has been known for over two
decades."
"So why do many economists continue to use aggregate
production functions with value measures of capital? Why do
they continue to teach, develop, and believe models that
have been shown to be nonsense?"
"One possible answer is ideological. This theory was
developed and accepted in its early days explicitly to
justify income distribution, as determined under
capitalism...."
"If economists were serious, they would long ago sought
alternatives to aggregate production function models.
Plenty of interesting work exists in other directions."
"The point of this example is to show why the interest rate
is generally not equal to the marginal product of capital."
Given this background, it is fairly clear to understand his
intentions in the following post.
>In his usual surreal fashion, Mark Witte wrote:
>
>> I think one of my neighbors even has these journals on his
>> office shelves. I may take the time to check them out.
>> However, even if they are empirical pieces, since Mr. Vienneau
>> has not read them, I'm not sure how he can say that they are
>> the compelling empirical regularities that drive his faith in
>> the PK/Sraffarian models.
>
>Of course, I did not claim that empirical evidence for the
>existence of reswitching or capital perversity "is the
>compelling empirical regularit[y]" that should decide whether or
>not Sraffian economics has anything to say about anything. I
>have always asserted that the interesting empirical questions
>about Post Keynesian and Neoclassical economics lie in different
>issues about savings and investments.
OK, well Mr. Vienneau doesn't think reswitching and capital
perversity are compelling empirical regularities then let's be
done with them then. And let's see the empirical support of the
Post Keynesian approach from issues about savings and
investments. (However, given his above admission, it is odd that
Mr. Vienneau chose to give the references he did.)
>
>Of course, once Mark Witte thought he might be confronted with
>the evidence of applied economists he immediately rejected
>empiricalism:
Not at all, I was just expressing skepticism in two forms.
One, I had asked what compelling evidence from the world in which
we live drew Mr. Vienneau to the models he likes? Was it this
paper (a reference he wisely deletes here)? It is likely it did
not and his motivation for working so hard to back these models
is in no way related to anything observed in the real world but
is instead solely motivated by ideology. Secondly, if the paper
did succeed in documenting "An Empirical Observation" of
reswitching (which it did not), this would hardly be evidence
that the issue was important any more than would the discovery of
an actual Giffen good overturn demand theory.
My (evidently justified) skepticism about this article Mr.
Vienneau brought up was based upon the suspicion that it really
had nothing to do with why Mr. Vienneau feels such opposition to
mainstream economics and the fact that he doesn't understand why
even the success of the article would achieve his ends.
>
>> A citation in a widely circulated journal. Good. So is
>> this the "apple falling from the tree" that brought Mr.
>> Vienneau to his views on economics? Did he see a lot of
>> reswitching going on and think, "Why, we need a theory where
>> this is a central factor?" Not likely. How does a possible
>> case of observed reswitching overturn the useful of mainstream
>> models? How would an observed example of a Giffen good lead
>> us to throw our economics texts in the recycling bin?
>
>As I have pointed out before, the analogy to Giffen goods fails.
But he was wrong then, and he is wrong now.
>Competent economists can explain how Giffen goods arise, why one
>might look for them among staple foodstuffs in diets among
>less developed nations, and why they should be rare.
>Reswitching cannot be explained so easily. If labor and capital
>were too exhibit those perversities whose possibility is shown
>in Cambridge models, economists would not be justified in
>refusing to modify their theories
Mr. Vienneau is correct in pointing out that reswitching and
factor perversity are more farfetched than Giffen goods.
Further, his misunderstanding of the necessary conditions for a
good to display Giffen behavior is noted. The blame for this
cannot fall too heavily on Mr. Vienneau since as he frequently
admits, his training in economics is minimal, he has trouble
getting at many of the journals, and he has had to rely upon
whatever books came his way. This last point leaves him
vulnerable to swallowing the mistakes of someone like Geoff
Harcourt who mistakes the exception for the rule. And is there
some evidence of labor and capital exhibiting such perversities?
No?
>
>Given Mark Witte's weak abilities with language - he can never
>summarize my posts accurately
Well, I'm never as good at hiding Mr. Vienneau's errors as
is the master himself. (And of course I'm not the one deleting
what I cannot answer.)
>and I have often found his accounts of published literature
>bizarre
This is not too surprising. Mr. Vienneau seems to find
rather basic concepts in economics and modelling bizarre and
unfamiliar, and let's not even get into his problems with
empirical work.
> - I cannot trust his account of any papers I have not read.
And evidently we cannot trust Mr. Vienneau's claims of
empirical support for his positions.
>Since I explicitly stated I had not read the work of applied
>economists I referred him too
"I can now produce some applied and empirical references,"
said an overly optimistic Robert Vienneau.
>- I don't have ready access to the journals even if I could
> spell them -
Oh well, if Mr. Vienneau doesn't even have access to the
journals he gives as references, we can hardly blame him if
they fail to live up to his claims for them.
> I have difficulty for understanding any rational justification
> for this ad hominem:
>
>> I happened to spend a little time this afternoon following
>> these references up and it has become clear that not only do
>> none of these papers provide any serious empirical support for
>> the importance or even the existence of reswitching but also
>> that Robert Vienneau couldn't tell an empirical paper from
>> _The Daily Worker_.
I can't understand why Mr. Vienneau would claim empirical
support for his position and the come up with a batch of articles
that so completely failed in this. [I takes me back to some work
I read from McGlade and Allen on another thread.]
Further, it is odd that Mr. Vienneau seems in no way abashed
for making claims of real world support that so thoroughly
collapsed.
>
>[...]
>
>> So now we know that there's zero empirical support
even
>>where Mr. Vienneau claims there is, should be send him an
>>autographed copy of _Capitalism and Freedom_?
>
>Thank you, if you want. But I already have a well-read copy of
>_Capitalism and Freedom_ on my shelves and an autographed letter
>from Milton Friedman to me. It's one of my prize possessions.
That's nice. However it's a puzzle why Mr. Vienneau chose
to delete the challenge he submitted that lead to my above quote.
It was,
"So now we know that there's support by applied
economists for reswitching, can we count on Mark Witte
to discard neoclassical economics?"
Methodological problems with his statement aside, Mr. Vienneau
seems remarkably untroubled by his favored approach's complete
failure to find real world support on this aspect that he so
promoted. Ah, the sturdy faith of the true believer!
What is the basic problem with Mr. Vienneau? It is that he
offers nothing. His posts do not attempt to create new
understanding of our world, but instead to discredit a fruitful
line of research. The authors he cites do construct alternative
models, but the empirical support for this work is just about
nil. So to paraphrase Mr. Vienneau, "why does [he] continue to
[advocate] and believe models that have been shown to be
nonsense?" "One possible answer is ideological." If Mr.
Vienneau "were serious, [he] would long ago [have] sought
alternatives" that had some basis in what actually goes on in our
world.
It's fine to have an ideology, but the way to advance it is
not by negation of other approaches but instead by making
positive advances that explain something that the conventional
theory does not. The failure to do so dooms a body of work to
history's dustbin.
Robert Vienneau
Mark Witte writes:
> In article <rvien-04059...@ua7.dreamscape.com>,
> Robert Vienneau <rv...@dreamscape.com> wrote:
> >I wrote:
> >
> >>> So perhaps I better stick to questions of arithmetic. Here's
> >>> one for Mark Witte:
> >>>
> >>> How are wages and labor intensity related at a switch point
> >>> exhibiting capital perversity?
> >
> >Mark Witte refused to answer what I thought was a rather simple
> >question.
>
> I certainly did not refuse to answer the question and the
> fact that Mr. Vienneau chose to delete my reply is highly
> instructive of his tactics.
Actually, Mark Witte did refuse to answer the question.
If he had the understanding of the technical content necessary to
support his judgements on the Cambridge Capital Controversy, it would
have been a simple question to answer.
[...]
> I'll work on it, after I figure out if it matters and
> after I come up with a way to aggregate labor so that
> the term "labor intensity" has some meaning.
> ...The answer Mr.
> Vienneau did give was the simple:
>
> Higher wages may be associated with the selection of a
> more labor-intensive technique.
>
> What would he have said if I had posted this? Who knows?
Probably, "correct."
[...]
> Getting back to the subject of this thread, "Neoclassical
> Economics - Still Dead", are there any well documented examples
> from our world where higher real wages lead to more labor
> intensive techniques?
Since I started the thread, one might suspect my judgement about what's
on topic rules. However, is there empirical evidence that higher
real wages are not associated with less demand for labor?
It's very difficult to find empirical evidence for how a change in
wages affects technological choices from a *given* technology. That's
a question of logic that doesn't seem to apply to the real world.
[...]
> This wasn't even something as simple as failing to
> understand that the tools of continuous calculus don't apply at
> the kink in a Leontief function, there really was no math in the
> matter at all.
It would be nice if Mark Witte would drop points where he has been
shown to be mistaken. I never differentiated the kink in a Leontief
production function. I did differentiate the wage-rate of profits
curve arising from a technique that Mr. Witte seems to have believed
must be associated with a Leontief technology. Of course, that's
perfectly legal. The point was to show that tangents to a wage rate
of profit frontier may have different slopes than the corresponding
secant leading to the intercept with the wage axis. Thus, the
marginal product of value capital in a stationary state need not be
equal to the rate of interest. This argument - although incomprehensible
to those who do not understand the needed math, which is explained
in Burmeister or Pasinetti - is correct.
As a further point, if reswitching occurs, Burmeister's chain index
of capital cannot justify the tradional Neoclassical aggregate
parable.
[...]
> Speaking of which, is there a smidgen of evidence that the
> models Mr. Vienneau advocates match any interesting aspects of
> the data? I don't really expect him to actually come up with any
> such exmaples, but in the past the failures of his attempts have
> at least generated some mirth.
It would be nice if Mark Witte would occassionally argue for his
premises, especially when they are contradicted by other neoclassical
economists. E.g. why does he think Cambridge models of *production*
are an alternative to neoclassical models, such as the MIT linear
programming approach?
[...]
> >Suppose n types or qualities of labor exist. Then, given certain
> >technical assumptions, the wage-rate of profits frontier becomes
> >an n dimensional surface in an n+1 dimensional space. Given
> >wages for all kinds of labor but one, say, unskilled labor, one
> >obtains a slice of that surface looking something like the usual
> >2-D wage-rate of profits frontier.
>
> Ah, but does this account for the substituability of
> differing forms of labor for one another in the same technology?
This seems a weird question to ask for one who has presumably just
read how to handle more than one non-produced means of production
in Cambridge models of production. However, this approach can
be used to determine the cost-minimizing technique at different
combinations of wages and rate of profits. Whether one wants to
call that "substituability" is anotehr question.
[...]
> >I do not recall ever attacking the "intellectual integrity" of
> >Robert Lucas.
>
> Reference: The sci.econ thread on "Do High Interest Rates
> Cause Inflation."
I certainly phrased some of my complaints in a romantic fashion.
However, I still do not see that I attacked the "intellectual
integrity" of Robert Lucas.
> >I do recall Mark Witte pointing me to Burmeister's answers to
> >the Cambridge critique and Mark Witte quoting various Burmeister
> >polemics.
>
> Mr. Vienneau accuses Burmeister of launching polemics? Does
> he recall the name of this thread? "Neoclassical Economics -
> Still Dead."
No, Mr. Vienneau does not "accuse" Burmeister of anything and is
amused by reading polemics. Mr. Vienneau would like polemics to be
backed up by argument and substance, though.
(Since Mr. Vienneau has started referring to himself in the third
person, perhaps he is thinking of running for president on the
Republican ticket.)
[...]
> >Mark Witte responded to this original post and told me in
> >another thread that he had read my rewrite, even to the extent
> >of getting its changed title correct. Now he tells me he hasn't.
>
> This is a fabrication on the part of Mr. Vienneau. I made
> is perfectly clear that I had read the 23 December 1995 version
> of his Sraffa3.ps, entitled "A Sraffian Critique of Neoclassical
> Theory." It's errors were grave as I explained in my review of
> it posted on sci.econ. I cannot make a guess as to what Mr.
> Vienneau means about getting titles correct.
Well, a quick DejaNews search did not allow me to find the post
where Mark Witte announced he had read my rewrite. However, his
behavior on this thread is still fairly incomprehensible if judged
by rational standards.
Robert Vienneau
Mark Witte writes:
> In article <rvien-04059...@ua7.dreamscape.com>,
> Robert Vienneau <rv...@dreamscape.com> wrote:
>
> [...]
> >Of course, I did not claim that empirical evidence for the
> >existence of reswitching or capital perversity "is the
> >compelling empirical regularit[y]" that should decide whether or
> >not Sraffian economics has anything to say about anything. I
> >have always asserted that the interesting empirical questions
> >about Post Keynesian and Neoclassical economics lie in different
> >issues about savings and investments.
>
> OK, well Mr. Vienneau doesn't think reswitching and capital
> perversity are compelling empirical regularities then let's be
> done with them then.
No, they are part of the basis for a logical criticism of
neoclassical economics. Certainly if one wants to understand the
logic of the Cambridge Capital Controversy, one has to understand
them.
And I am undecided about their empirical applicability.
> And let's see the empirical support of the
> Post Keynesian approach from issues about savings and
> investments.
It's silly to criticize one argument for not being another. It seems
to me that serious scholars should at least be aware of competing
approaches for attacking the problems in which they are interested.
If they have not examined the empirical literature on the topic,
they have no basis to claim one approach has empirical superiority
over another. On the other hand, I do not feel obligated to present
any specific argument on sci.econ.
> (However, given his above admission, it is odd that
> Mr. Vienneau chose to give the references he did.)
No. I can respond to Mark Witte's view without adopting it.
[...]
> >As I have pointed out before, the analogy [of reswitching and
> >capital perversity] to Giffen goods fails.
> But he was wrong then, and he is wrong now.
Mark Witte seems utterly unaware of how to present an argument or
even if he has one.
> >Competent economists can explain how Giffen goods arise, why one
> >might look for them among staple foodstuffs in diets among
> >less developed nations, and why they should be rare.
> >Reswitching cannot be explained so easily. If labor and capital
> >were too exhibit those perversities whose possibility is shown
> >in Cambridge models, economists would not be justified in
> >refusing to modify their theories
> Mr. Vienneau is correct in pointing out that reswitching and
> factor perversity are more farfetched than Giffen goods.
> Further, his misunderstanding of the necessary conditions for a
> good to display Giffen behavior is noted.
Since I was not summarizing either necessary or sufficient conditions,
the criticism seems misplaced. Where is the mistake in my statements
on Giffen goods? Nor do I "point... out that reswitching and
factor perversity are more farfetched than Giffen goods."
[...]
> Further, it is odd that Mr. Vienneau seems in no way abashed
> for making claims of real world support that so thoroughly
> collapsed.
Since Mark Witte's judgement is unreliable, why should I feel abshed?
[...]
> That's nice. However it's a puzzle why Mr. Vienneau chose
> to delete the challenge he submitted that lead to my above quote.
> It was,
>
> "So now we know that there's support by applied
> economists for reswitching, can we count on Mark Witte
> to discard neoclassical economics?"
>
> Methodological problems with his statement aside, Mr. Vienneau
> seems remarkably untroubled by his favored approach's complete
> failure to find real world support on this aspect that he so
> promoted. Ah, the sturdy faith of the true believer!
Whatever. If Mark Witte says, "I will believe p until shown empirical
work shows otherwise," it is entirely appropriate to point out
empirical work, even if one has not accepted the question is to
be finally decided by empirical work.
Dan Parker
Robert
I take it you are well read on Milton Friedman. Did he propose a
negative income tax scheme and if so could you tell me the basics in
language for a non-economist? I would like to compare this with
Buckminster Fuller's ideas on the Socred National Dividend idea for a
project I am doing about metatransitions (big changes).
War Hate NOT
Dan Parker
Mark Witte
In article <rvien-06059...@ua16.dreamscape.com>,
Robert Vienneau <rv...@dreamscape.com> wrote:
>
>Mark Witte writes:
>> In article <rvien-04059...@ua7.dreamscape.com>,
>> Robert Vienneau <rv...@dreamscape.com> wrote:
>> >I wrote:
>> >
>> >>> So perhaps I better stick to questions of arithmetic.
>> >>> Here's one for Mark Witte:
>> >>>
>> >>> How are wages and labor intensity related at a switch
>> >>> point exhibiting capital perversity?
>> >
>> >Mark Witte refused to answer what I thought was a rather
>> >simple question.
>>
>> I certainly did not refuse to answer the question and the
>> fact that Mr. Vienneau chose to delete my reply is highly
>> instructive of his tactics.
>
>Actually, Mark Witte did refuse to answer the question.
>
>If he had the understanding of the technical content necessary
>to support his judgements on the Cambridge Capital Controversy,
>it would have been a simple question to answer.
Well, if this isn't classic Vienneau. Note that response
doesn't seem to make it through in Mr. Vienneau's posts. In
fact, where he cut my remarks above, the actual text continued as
follows:
So as to cut short his usual reply to being caught at
his "delete and mischaracterize" game, my reaction to
his challenge was only three lines long, so Mr.
Vienneau cannot claim he deleted it only to keep posts
from growing to some great length. When Mr. Vienneau
complains about something that he has deleted from the
thread, readers can be assured that he is at his games.
I guess when one really has nothing to contribute on a
theoretical or empirical dimension, and realized that ideology
alone won't win an argument, it is necessary to rely upon such
silly games. Not particularly amusing.
>
>[...]
>> Given Mr. Vienneau's diversionary tactic here, and given
>> the problem that this game he has set up certainly has a
>> flexible standard for solution where the flexibility is all
>> his as the questioner, my intention was to compose a tight
>> answer that would stand up to any silly side issues he would
>> wish to raise (recall the way he tried to wriggle out of
>> positions expressed in his Sraffa3.ps paper when their errors
>> were exposed). The answer Mr. Vienneau did give was the
>> simple:
>>
>> Higher wages may be associated with the selection of a more
>> labor-intensive technique.
>>
>> What would he have said if I had posted this? Who knows?
>
>Probably, "correct."
>
>> He probably would have pointed out that he prefaced the
>> question with "So perhaps I better stick to questions of
>> arithmetic" and them pronounced me as unable to read or as
>> unfamiliar with the term "arithmetic."
Right, who could doubt that Mr. Vienneau would have said
"correct?" And if he were caught red handed slandering Chris
Auld, he would apologize. And if he accused me of claiming to
have read his latest paper and then found that I had not, he
would apologize to me. And if he were to post up a list of
papers that he claimed gave empirical support to his point of
view and they did not, he would apologize to the readers of
sci.econ in general (or at the very least, come up with some
better references). Yes, Mr. Vienneau has certainly established
a record on playing straight.
>
>
>> Getting back to the subject of this thread, "Neoclassical
>> Economics - Still Dead", are there any well documented
>> examples from our world where higher real wages lead to more
>> labor intensive techniques?
>>
>> [I am aware that Mr. Vienneau wishes to deflect criticism that
>> he is being insulting and too negative by his choice of this
>> title for the thread and that he just picked it as a joke and
>> a play off of a book title. Wacky guy, he must be great at
>> parties.]
>
>Since I started the thread, one might suspect my judgement about
>what's on topic rules.
Since Mr. Vienneau started the thread with a bold assertion,
it would be hoped that he would be able to respond with
questioned on it.
>However, is there empirical evidence that
>higher real wages are not associated with less demand for labor?
Is Mr. Vienneau joking? Sure. Plenty. If I had to pick
the most even handed empirical work here, I'd go with Coen and
Hickman, various papers (i.e. Empirical 1995, AER 1988, Brookings
PEA 1987).
>
>It's very difficult to find empirical evidence for how a change
>in wages affects technological choices from a *given*
>technology. That's a question of logic that doesn't seem to
>apply to the real world.
However, it is an applied question that seems to be very
important in a variety of fields, particularly development
economics. Is this just more entertainment from Mr. Vienneau
on the subject of empirical work?
>>>
>>>One sees how this works. When I use the vernacular, I am
>>>"vague"
>>
>> No, when Mr. Vienneau doesn't give references or when he
>> doesn't define his terms after being asked to do so, he is
>> being vague. I hope that is clear enough.
>>
>> Speaking of Mr. Vienneau being vague, I have several times
>> asked him to define his terms when he makes is frequent claim
>> that "long run equilibrium prices are not scarcity indices."
>> On more than one occasion I've asked him to explain himself in
>> an economic sense that "would involve some sort of ceteris
>> paribus comparison of opportunity costs and ways in which
>> agents would allocate their budgets." If he wishes to
>> continue to avoid attaching defined meaning to his worlds, I
>> can well understand why, but then he cannot complain when it
>> is pointed out that he is vague.
>>
>> Instead of definitions, he gives examples of capital
>> perversity and fends off queries on his meaning of long run
>> (as something differentiated presumably from some short run)
>> with statements like:
>>
>> I don't need a definition as long as I confine
>> myself to examples that everybody accepts as "long
>> run" positions.
>>
>> Great, huh?
I guess no reply is better than a vague reply.
>>
>>>and it is not clear what this has "to do with the
>>>Sraffarian/Post Keynesian stuff Mr. Vienneau is always
>>>flogging."
>>
>> As it often is not.
>>
>>>When I investigate a technical question Mr. Witte cannot
>>>comprehend.
>>
>> Certainly comprehension is often lacking. As an example,
>> when I pointed out a purely conceptual failing in Mr.
>> Vienneau's "A Sraffian Critique of Neoclassical Theory", his
>> reply was that my math was wrong. Since math never came into
>> either his error or my critique, his answer was a complete non
>> sequitur and showed his utter lack of understanding of basic
>> issues in constructing a model. This wasn't even something as
>> simple as failing to understand that the tools of continuous
>> calculus don't apply at the kink in a Leontief function, there
>> really was no math in the matter at all.
>
>It would be nice if Mark Witte would drop points where he has
>been shown to be mistaken. I never differentiated the kink in a
>Leontief production function.
It would be instructive if Mr. Vienneau would review his
posts on the "Do High Interest Rates Cause Inflation" thread. Or
check the recollections of Misters Auld, Millard, or some others
who had good chuckles over this gaffe.
At a more serious level, Mr. Vienneau's habit of deleting
what he cannot answer and then claiming that it said something
different does him no credit, however much he thinks it is a
clever tactic (displayed again here).
>I did differentiate the wage-rate
>of profits curve arising from a technique that Mr. Witte seems
>to have believed must be associated with a Leontief technology.
>Of course, that's perfectly legal. The point was to show that
>tangents to a wage rate of profit frontier may have different
>slopes than the corresponding secant leading to the intercept
>with the wage axis. Thus, the marginal product of value capital
>in a stationary state need not be equal to the rate of interest.
>This argument - although incomprehensible to those who do not
>understand the needed math, which is explained in Burmeister or
>Pasinetti - is correct.
This is not the model where Mr. Vienneau made that error.
However, when he did make this error (not for the first time
either), it was pointed out to him and he (wisely) chose not to
respond. Perhaps this is just an "investigat[ion] of a technical
question Mr. [Vienneau] cannot comprehend." It might be good for
Mr. Vienneau's blood pressure if he stuck to making substantive
replies when asked to justify the usefulness of his positions
rather than ducking the question.
>
>As a further point, if reswitching occurs, Burmeister's chain
>index of capital cannot justify the tradional Neoclassical
>aggregate parable.
And the evidence of the occurrence of reswitching? Oh
that's right, that's on another branch of this thread. All those
great applied and empirical papers Mr. Vienneau supplied us with
(which were just more "empirical free zones").
>>>Instead, despite all his
>>>pronouncements on Methodology, he can somehow determine what
>>>questions are important a priori before doing the arithmetic.
>>>Despite this inability or refusal, he thinks himself competent
>>>to make laughable pronouncements such as "Vienneau's
>>>theoretical critiques have been repeatedly been exposed for
>>>their errors,"
>>
>> Reference: Vienneau, Robert L. "A Sraffian Critique of
>> Neoclassical Theory", 23 December 1995.
>>
>>>"it's hard to take Mr. Vienneau seriously when
>>>his objections are based on mistaken theoretical challenges
>>>and comparisons with models for which he builds no compelling
>>>real world case,"
>>
>> Speaking of which, is there a smidgen of evidence that
>> the models Mr. Vienneau advocates match any interesting
>> aspects of the data? I don't really expect him to actually
>> come up with any such examples, but in the past the failures
>> of his attempts have at least generated some mirth.
>
>It would be nice if Mark Witte would occassionally argue for his
>premises, especially when they are contradicted by other
>neoclassical economists. E.g. why does he think Cambridge models
>of *production* are an alternative to neoclassical models, such
>as the MIT linear programming approach?
Mr. Vienneau's misunderstanding of basic methodology has
already been thoroughly explored on other threads and need not be
reviewed here.
And, since Mr. Vienneau has pointed out that this is his
tread, the improvement of the Post Keynesian or Sraffarian or
Kaldorian or any other methodology over any major flavor of
neoclassical practice is reflected in what observation about our
world? [Mr. Vienneau will likely shrug this off because he does
not understand that arguing assumptions is pointless and that it
is positive contributions to understanding the world that wins
believers to the usefulness of a methodology.]
>
>[...]
>> >Suppose n types or qualities of labor exist. Then, given
>> >certain technical assumptions, the wage-rate of profits
>> >frontier becomes an n dimensional surface in an n+1
>> >dimensional space. Given wages for all kinds of labor but
>> >one, say, unskilled labor, one obtains a slice of that
>> >surface looking something like the usual 2-D wage-rate of
>> >profits frontier.
>>
>> Ah, but does this account for the substitutability of
>> differing forms of labor for one another in the same
>> technology?
>
>This seems a weird question to ask for one who has presumably
>just read how to handle more than one non-produced means of
>production in Cambridge models of production. However, this
>approach can be used to determine the cost-minimizing technique
>at different combinations of wages and rate of profits. Whether
>one wants to call that "substitutability" is anotehr question.
Mr. Vienneau misses the point of the question. It is not a
weird question at all to anyone who has studied labor economics.
>[...]
>> >I do not recall ever attacking the "intellectual integrity"
>> >of Robert Lucas.
>>
>> Reference: The sci.econ thread on "Do High Interest
>> Rates Cause Inflation."
>
>I certainly phrased some of my complaints in a romantic fashion.
>However, I still do not see that I attacked the "intellectual
>integrity" of Robert Lucas.
Romantic? Sure. [It is to be hoped that Mr. Vienneau will
contract for the services of a modern-day Cyrano De Bergerac to
assist him with his courting.]
>
>> >I do recall Mark Witte pointing me to Burmeister's answers to
>> >the Cambridge critique and Mark Witte quoting various
>> >Burmeister polemics.
>>
>> Mr. Vienneau accuses Burmeister of launching polemics?
>> Does he recall the name of this thread? "Neoclassical
>> Economics - Still Dead."
>
>No, Mr. Vienneau does not "accuse" Burmeister of anything and is
>amused by reading polemics. Mr. Vienneau would like polemics to
>be backed up by argument and substance, though.
Maybe, one day, one of Mr. Vienneau's will be. It would be
good if he would start with "Neoclassical Economics - Still
Dead."
>
>(Since Mr. Vienneau has started referring to himself in the
>third person, perhaps he is thinking of running for president on
>the Republican ticket.)
I mean how much could it be for Mr. Vienneau to hire someone
to help him with his "romantic" writings? Heck, I'm sure for a
few extra bucks, this person could even write some humorous
asides that Mr. Vienneau could throw into his posts.
>
>[...]
>> >Mark Witte responded to this original post and told me in
>> >another thread that he had read my rewrite, even to the
>> >extent of getting its changed title correct. Now he tells me
>> >he hasn't.
>>
>> This is a fabrication on the part of Mr. Vienneau. I
>> made it perfectly clear that I had read the 23 December 1995
>> version of his Sraffa3.ps, entitled "A Sraffian Critique of
>> Neoclassical Theory." It's errors were grave as I explained
>> in my review of it posted on sci.econ. I cannot make a guess
>> as to what Mr. Vienneau means about getting titles correct.
>
>Well, a quick DejaNews search did not allow me to find the post
>where Mark Witte announced he had read my rewrite. However, his
>behavior on this thread is still fairly incomprehensible if
>judged by rational standards.
Mr. Vienneau's apologies are of the same quality as his
economics.
>>>
>>>What am I to make of this? That Mark Witte suffers amnesia?
>>>That he is a collective using a single account? Of course,
>>>this is not the first time that he has gone into lenghtly
>>>discussions about why some piece is mistaken, and then
>>>revealed that he had not read the piece and had no idea of
>>>what he was talking about.
>>
>> This is yet another fabrication on the part of Mr. Vienneau.
>>And an ironic one at that considering how on this thread his
>>recent claims about the empirical content of various
>>references were exposed to be empty.
Ditto. [This thread seems to parallel some aspects of the
"Assumptions by dlj" thread.]
>>
>> Having read the 23 December 1995 version and spotting a
>> laundry list of errors in it, it would be remarkable if Mr.
>> Vienneau had now come to have any idea what he himself is
>> talking about in his new paper. But summer is coming and I
>> will soon find out. Don't worry, I won't keep the results to
>> myself.
>>
>> In the meantime, given the theoretical soundness of
>> mainstream models, does Mr. Vienneau have any reason to think
>> that the Sraffarian and Post-Keynesian boilerplate he likes to
>> drop on sci.econ has any support in terms of what we see in
>> the world around us? And if not, is there nothing we can do
>> to be spared his purely ideologically driven harangues?
I guess not.
Mark Witte
In article <rvien-06059...@ua16.dreamscape.com>,
Robert Vienneau <rv...@dreamscape.com> wrote:
>> In article <rvien-04059...@ua7.dreamscape.com>,
>> Robert Vienneau <rv...@dreamscape.com> wrote:
>>
>> What does Robert Vienneau say about neoclassical economics
>> like "Neoclassical Economics - Still Dead" and "The Death of
>> Neoclassical Economics." Further, he likes to make statements
>> like the following:
>>
>> "There is neither theoretical nor empirical foundation for
>> the claim that the interest rate is equal to the marginal
>> product of capital. This has been known for over two
>> decades."
Ah, Mr. Vienneau on the subject of empirical work. What,
is it sweeps week already?
>>
>> "So why do many economists continue to use aggregate
>> production functions with value measures of capital?
>> Why do they continue to teach, develop, and believe
>> models that have been shown to be nonsense?"
If only economists used Sraffarian analysis, the world
would be so much better understood.
>>
>> "One possible answer is ideological. This theory was
>> developed and accepted in its early days explicitly to
>> justify income distribution, as determined under
>> capitalism...."
Thank heavens for a voice of reason amidst all the ideological
babble of the empirical economists!
>>
>> "If economists were serious, they would long ago sought
>> alternatives to aggregate production function models.
>> Plenty of interesting work exists in other directions."
Oh, if only economists were as "serious" as Mr. Vienneau.
>>
>> "The point of this example is to show why the interest rate
>> is generally not equal to the marginal product of capital."
>>
>> Given this background, it is fairly clear to understand
>> his intentions in the following post.
>>
>>>In his usual surreal fashion, Mark Witte wrote:
>>>
>>>> I think one of my neighbors even has these journals on
>>>> his office shelves. I may take the time to check them out.
>>>> However, even if they are empirical pieces, since Mr.
>>>> Vienneau has not read them, I'm not sure how he can say
>>>> that they are the compelling empirical regularities that
>>>> drive his faith in the PK/Sraffarian models.
Whoa, now that's surreal! It must be a quote stolen from
Dali.
>> >Of course, I did not claim that empirical evidence for the
>> >existence of reswitching or capital perversity "is the
>> >compelling empirical regularit[y]" that should decide whether
>> >or not Sraffian economics has anything to say about anything.
>> >I have always asserted that the interesting empirical
>> >questions about Post Keynesian and Neoclassical economics lie
>> >in different issues about savings and investments.
>>
>> OK, well Mr. Vienneau doesn't think reswitching and
>> capital perversity are compelling empirical regularities then
>> let's be done with them then.
>
>No, they are part of the basis for a logical criticism of
>neoclassical economics. Certainly if one wants to understand the
>logic of the Cambridge Capital Controversy, one has to
>understand them.
As even Mr. Vienneau seems to admit, reswitching and capital
perversity are examples of special cases with no observed
application to the world in which we live. I find people like
Mr. Vienneau quite odd in that they devote themselves to sterile
pursuits and care nothing about understanding the lives of
ordinary people.
>
>And I am undecided about their empirical applicability.
Why? What scintilla of evidence can Mr. Vienneau have to
hold on to any figment of hope that these things actually matter?
Is it just that they so nicely serve his ideological desires?
>
>> And let's see the empirical support of the
>> Post Keynesian approach from issues about savings and
>> investments.
>
>It's silly to criticize one argument for not being another.
It's silly to pretend to have a superior alternative to neo-
classical economics when what one advocates has no theoretical
advantage and is a complete empirical failure. I would hope that
Robert Vienneau would stop being silly.
For instance, he just finished the following remark.
I have always asserted that the interesting empirical
questions about Post Keynesian and Neoclassical
economics lie in different issues about savings and
investments.
If he asserts this, then let's see why. What empirical questions
does the PK approach answer that the neoclassical one does not?
If he really thinks that neoclassical economics is dead (in which
case he's delusional) or even suffering from athlete's foot, it
would be good if he would support his position with more than
mere references to sterile alternative GE specifications. If he
really believes his own words, then support them! What empirical
issues do Post Keynesian models explain better than neoclassical
ones?
>It seems to me that serious scholars should at least be aware
>of competing approaches for attacking the problems in which
>they are interested.
And the problems that Mr. Vienneau finds interesting are...?
>If they have not examined the empirical
>literature on the topic, they have no basis to claim one
>approach has empirical superiority over another.
I would again like to thank Mr. Vienneau for giving a
listing of the empirical work on the topic that is so close to
his heart. It would have been somewhat better (although far less
amusing) is this work had actually been empirical in nature.
>On the other
>hand, I do not feel obligated to present any specific argument
>on sci.econ.
Mr. Vienneau launches threads like "Neoclassical Economics -
Still Dead" but then feels all put out when asked to come up with
some approach that does a better job of accomplishing the goals
of neoclassical economics, namely explaining our world.
>
>> (However, given his above admission, it is odd that
>> Mr. Vienneau chose to give the references he did.)
>
>No. I can respond to Mark Witte's view without adopting it.
>
Mr. Vienneau can claim to have a better model to explain our
world but does not feel the need to justify it. I feel some
sympathy for members of school boards who must defend evolution
against the faithful followers of Creationism.
>>>Of course, once Mark Witte thought he might be confronted with
>>>the evidence of applied economists he immediately rejected
>>>empiricalism:
>>
>> Not at all, I was just expressing skepticism in two forms.
>> One, I had asked what compelling evidence from the world in
>> which we live drew Mr. Vienneau to the models he likes? Was
>> it this paper (a reference he wisely deletes here)? It is
>> likely it did not and his motivation for working so hard to
>> back these models is in no way related to anything observed in
>> the real world but is instead solely motivated by ideology.
>> Secondly, if the paper did succeed in documenting "An
>> Empirical Observation" of reswitching (which it did not), this
>> would hardly be evidence that the issue was important any more
>> than would the discovery of an actual Giffen good overturn
>> demand theory.
>>
>> My (evidently justified) skepticism about this article Mr.
>> Vienneau brought up was based upon the suspicion that it
>> really had nothing to do with why Mr. Vienneau feels such
>> opposition to mainstream economics and the fact that he
>> doesn't understand why even the success of the article would
>> achieve his ends.
>
>> >As I have pointed out before, the analogy [of reswitching and
>> >capital perversity] to Giffen goods fails.
>
>> But he was wrong then, and he is wrong now.
>
>Mark Witte seems utterly unaware of how to present an argument
>or even if he has one.
Just wait, it's coming.
>> >Competent economists can explain how Giffen goods arise, why
>> >one might look for them among staple foodstuffs in diets
>> >among less developed nations, and why they should be rare.
>> >Reswitching cannot be explained so easily. If labor and
>> >capital were too exhibit those perversities whose
>> >possibility is shown in Cambridge models, economists
>> >would not be justified in refusing to modify their theories
>
>> Mr. Vienneau is correct in pointing out that reswitching
>> and factor perversity are more farfetched than Giffen goods.
>> Further, his misunderstanding of the necessary conditions for
>> a good to display Giffen behavior is noted. The blame for
>> this cannot fall too heavily on Mr. Vienneau since as he
>> frequently admits, his training in economics is minimal, he
>> has trouble getting at many of the journals, and he has had to
>> rely upon whatever books came his way. This last point leaves
>> him vulnerable to swallowing the mistakes of someone like
>> Geoff Harcourt who mistakes the exception for the rule. And
>> is there some evidence of labor and capital exhibiting such
>> perversities? No?
>
>
>Since I was not summarizing either necessary or sufficient
>conditions, the criticism seems misplaced. Where is the mistake
>in my statements on Giffen goods?
I will leave it to the other readers on sci.econ to judge if
Mr. Vienneau is trying to worm out of yet another position.
>Nor do I "point...out that reswitching and factor perversity are
>more farfetched than Giffen goods."
Mr. Vienneau says that unlike Giffen goods, there really
aren't even any good stories about why we would ever hope to see
reswitching or factor perversity in our lifetimes.
>
>>>Given Mark Witte's weak abilities with language - he can never
>>>summarize my posts accurately
>>
>> Well, I'm never as good at hiding Mr. Vienneau's errors as
>> is the master himself. (And of course I'm not the one
>> deleting what I cannot answer.)
Did I mention that Mr. Vienneau is a master of selective
editing? It's odd that I had to re-insert this quote, it seemed
to fall out of his reply, along with a lot of other rather
important points.
>>
>>>and I have often found his accounts of published literature
>>>bizarre
>>
>> This is not too surprising. Mr. Vienneau seems to find
>> rather basic concepts in economics and modelling bizarre and
>> unfamiliar, and let's not even get into his problems with
>> empirical work.
>>
>>> - I cannot trust his account of any papers I have not read.
>>
>> And evidently we cannot trust Mr. Vienneau's claims of
>> empirical support for his positions.
>>
>>>Since I explicitly stated I had not read the work of applied
>>>economists I referred him too
>>
>> "I can now produce some applied and empirical references,"
>> said an overly optimistic Robert Vienneau.
>>
>>>- I don't have ready access to the journals even if I could
>>> spell them -
>>
>> Oh well, if Mr. Vienneau doesn't even have access to the
>> journals he gives as references, we can hardly blame him if
>> they fail to live up to his claims for them.
>>
>>> I have difficulty for understanding any rational
>>> justification for this ad hominem:
Well, I hope that Mr. Vienneau can shrug off these ad
hominem attacks as just the words of a "bizarre", "surreal"
fellow known for his "weak abilities with language" who suffers
from "ignorance or dyslexia" and even "amnesia."
>>>
>>>> I happened to spend a little time this afternoon following
>>>> these references up and it has become clear that not only do
>>>> none of these papers provide any serious empirical support
>>>> for the importance or even the existence of reswitching but
>>>> also that Robert Vienneau couldn't tell an empirical paper
>>>> from _The Daily Worker_.
>>
>> I can't understand why Mr. Vienneau would claim empirical
>> support for his position and the come up with a batch of
>> articles that so completely failed in this. [I takes me back
>> to some work I read from McGlade and Allen on another thread.]
>>
>> Further, it is odd that Mr. Vienneau seems in no way
>> abashed for making claims of real world support that so
>> thoroughly collapsed.
>
>Since Mark Witte's judgement is unreliable, why should I feel
>abshed?
"I can now produce some applied and empirical references,"
said an overly optimistic Robert Vienneau. However, these
references proved to have no empirical content. But this does
not seem to bother Mr. Vienneau at all since his love of his
models is not based upon evidence but... maybe... ideology?
>
>>>> So now we know that there's zero empirical support
>>>> even where Mr. Vienneau claims there is, should be send
>>>> him an autographed copy of _Capitalism and Freedom_?
>>>
>>>Thank you, if you want. But I already have a well-read copy
>>>of _Capitalism and Freedom_ on my shelves and an autographed
>>>letter from Milton Friedman to me. It's one of my prize
>>>possessions.
>>
>> That's nice. However it's a puzzle why Mr. Vienneau
>> chose to delete the challenge he submitted that lead to my
>> above quote. It was,
>>
>> "So now we know that there's support by applied
>> economists for reswitching, can we count on Mark Witte
>> to discard neoclassical economics?"
>>
>> Methodological problems with his statement aside, Mr. Vienneau
>> seems remarkably untroubled by his favored approach's complete
>> failure to find real world support on this aspect that he so
>> promoted. Ah, the sturdy faith of the true believer!
>
>Whatever. If Mark Witte says, "I will believe p until shown
>empirical work shows otherwise," it is entirely appropriate
>to point out empirical work, even if one has not accepted the
>question is to be finally decided by empirical work.
Given competing valid frameworks, the one with better
empirical support is the one that is more convincing. This is
the was science works, even if one's ideology makes one wish it
didn't.