Don't let Mark Jones scare you with all his heavy breathing. He is really a pussycat, :-).
What I want to know is the question someone else asked recently: Where are the funky deconstructionists who will pop out of closets chanting nineteenth century romantic poems about kinky sex?
Co-state variables and exchange values? Give me a break! Barkley Rosser On Wed, 13 May 1998 20:07:06 +0100 Mark Jones <Jones_M at netcomuk.co.uk> wrote:
> Brad, before you go any further I should tell you that my doctorate was at the
> LSE with an eminent prof that you at least respect. Don't start me off on Kenneth
> Arrow or Lagrange, unless you are seriously contemplating a different future from
> the one portrayed in your quite incredibly self-satisfied web pages. There is no
> way in the world that you will leave a debate with me, feeling the way you do
> now. You have obviously never met anyone like me, which is a comment on the
> tragedy of US postgrad programmes. But I am your nemesis.
>
> Mark
> You all squared off, now?
> Or about ready to unsub?
>
>
> > Would you be happier if I said that market prices in a competitive economy
> > (that is, "exchange value") are the values of the co-state variables that
> > appear in the Lagrangian for the economic problem of arranging production
> > and distribution so as to maximize the chosen welfare function?*
> >
> > *Where the welfare function is "chosen" by the society's
> > distribution of income and wealth: the greater your income
> > and wealth, the greater weight your preferences have in
> > determining the shape of the welfare function that the
> > competitive market economy tries to maximize. For this
> > reason most--liberal--economists think that if you take
> > care of the distribution of income and wealth (and
> > externalities, and monopoly) that most other economic
> > good things will take care of themselves.)
> >
> > Market prices in a competitive economy ("exchange values") *are* indicators
> > of scarcity: they carry information about the money-metric utility of that
> > particular commodity or resource in its most favorable alternative use.
> > This is one of the two key reasons that markets appear to be very flexible
> > and "efficient" mechanisms for allocating production and distribution (but
> > if the distribution of wealth is wrong, or if externalities or monopoly are
> > rife, then they will flexibly and efficiently carry you to the wrong
> > destination).
> >
> > The second key reason is that the possibility of bankruptcy appears better
> > than alternatives in enforcing "sunset" on inefficient and unproductive
> > organizations. Certainly neither bureaucracy nor politics are very good at
> > closing down organizations that have outlived their usefullness. As former
> > Undersecretary of Commerce Ev Ehrlich once said, "It is a good thing we
> > didn't have the Federal Government around 3,000 years ago. We would still
> > have 4,000 people down on the Mall working in the Department of Hunting and
> > Gathering."
> >
> > But I digress...
> >
> > Brad DeLong
>
>
>
>
-- Rosser Jr, John Barkley rosserjb at jmu.edu