History, Evolution, and The Darwin Debate

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“With the onset of postcapitalism will neo-classical economists be taken out and shot?”

May 2nd, 2015 · No Comments

Quick answer: N0!!, don’t shoot…Gallows humor! but the question lingers, in the revenge rage of millions if they knew what was going on, not only as to technocratic authoritariansim, but the deceptive incompetence of economists. The imposition of bad theories any decent economist can see are false is the ideological class warfare of the bourgeois elite of economists….
This passage from Smolin is the ridiculous last straw in my attempt to make sense of current economics.
Now we know: people smart enough to learn advanced math will use that to deceive the public on issues of economics…
I have cited below the section from Smolin’s book.
Actually with or without a little calculus and linear algebra this whole facade could be clearly demonstrated (as true/false) in a form open to most marxists and much of the general public.
There is a marble missing here in the whole game: In my view this kind of mathematics could never be suitable for theories of economics. Calculus doesn’t work here, and the experts can’t figure this out.
Humor or not, the problem will persist into a postcapitalist era of mathematical deceptions used to redeceive the public on policy measures.
Instead of violence, just don’t trust economists.

Quick Scan from Smolin book Time Reborn p. 258

Probably the greatest harm done by the metaphysical view that real-
ity is timeless is through its influence on economics.’ The basic flaw
in the thinking of many economists is that a market is a system with a
single equilibrium state. This is a state where the prices have adjusted
so that the supply of each good exactly meets the demand for it, ac-
cording to the law of supply and demand. Further, such a state is said
to optimize everyone’s satisfaction. There’s even a mathematical theo-
rem holding that in equilibrium no one can be made happier without
making someone else less happy.’ ”

If each market has one and only one such equilibrium point, then
the wise and ethical thing to do is leave the market alone so it can
settle at that point. Market forces (i.e., the way producers and con-
sumers respond to changes in prices) should be sufficient to do this.
A recent version of this idea is the efficient-market hypothesis, which
holds that prices reflect all the information relevant to the market. In
a market with many players contributing their knowledge and views
by means of their bids and asks, it is impossible that any asset is mis-
priced for long. Remarkably, this line of reasoning is supported by el-
egant mathematical models within which are formal proofs that equi-
librium points always exist; that is, there are always choices of prices
such that supply exactly balances demand.

This simple picture, in which the market always acts to restore con-
ditions to equilibrium, depends on the assumption that there’s only
one equilibrium. But this isn’t the case. Economists have known since
the 1970S that their mathematical models of markets have typically
many equilibrium points where supply balances demand. How many?
The number is hard to estimate but certainly grows at least propor-
tionally to the numbers of companies and consumers, if not faster. In a
complex modern economy, with many goods made by many firms and
bought by many consumers, there are a lot of ways to set the prices of
goods so that supply and demand are in balance.’

Because there are many equilibria where market forces balance, they
cannot all be completely stable. The question is, then, how a society
chooses which equilibrium to De in. The choice cannot be explained
solely by market forces, because supply and demand are balanced in
each of the many possible equilibria. Regulations, laws, culture, ethics,
and politics then playa necessary role in deterrriining the evolution of
a market economy.

How is it possible that influential economists have argued for dec-
ades from the premise of a single, unique equilibrium, when results
in their own literature by prominent colleagues showed this to be in-
correct? I believe the reason is the pull of the timeless over the time-
bound. For if there is only a single stable equilibrium, the dynamics by
which the market evolves over time is not of much interest. Whatever
happens, the market will find the equilibrium, and if the market is per-
turbed, it will oscillate around that equilibrium and settle back down
into it. You don’t need to know anything else.

If there is a unique and stable equilibrium, there’s not much scope
for human agency (apart from each firm maximizing its profits and
each consumer maximizing his pleasure) and the best thing to do is
to leave the market alone to achieve that equilibrium. But if there e.
many possible equilibria, and none is completely stable, then human
agency has to participate in and steer the dynamics by which one equi-
librium is chosen out of many possibilities. In the thinking of the eco-
nomic gurus who won the day for deregulation, the role of human
agency was neglected, in deference to an imagined mythical timeless …


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