My understanding of reading through Posner's stuff [which is a great cure for insomnia btw] is that it claims to be based on neoclassical micro.[esp. "The Economics of Justice"] Am I missing something? It all looks even more ridiculous if you read it alongside Mirowski's "More Heat than Light".
> -----Original Message-----
> From: owner-lbo-talk at lists.panix.com
> [mailto:owner-lbo-talk at lists.panix.com]On Behalf Of Nathan Newman
> Sent: Friday, January 14, 2000 8:06 PM
> To: lbo-talk at lists.panix.com
> Subject: RE: Greenspan on Seattle
> > -----Original Message-----
> > From: owner-lbo-talk at lists.panix.com
> > [mailto:owner-lbo-talk at lists.panix.com]On Behalf Of Rakesh Bhandari
> > One can't imagine a world in which the economist's
> idiosyncratic conception
> > of (perfect) competition applies less and less.
> I do have to say that the one thing law school has done for me is to help
> understand the ideology that promotes all this centralization in
> the name of
> free market competition and it does return us to our friend
> Richard Posner (and
> Coase). The argument is that perfect competition is only the
> ideal model that
> needs to include transaction costs. All the costs of negotiation
> and conflict
> lead to very different needs in the economy that the ideal of
> free competition.
> Once you assume transaction costs, you have to create all sorts
> of authoritarian
> top-down institutions to attain the same efficient results as perfect
> competition would accomplish with no transaction costs.
> So magically, an ideology that bases itself on the ideal of
> competition promotes
> its exact opposite in order to create a simulacra of the results
> of competition.
> It's a lovely theoretical model -- much more attractive than neoclassical
> economics -- with some good analyis admist the rightwing
> ideological dross. But
> it is an ideology of true chutzpah and Orwellian labelling, where state
> repression of ideas becomes a promotion of "intellecual property"
> freedom and
> economic concentration and is the promotion of competition.
> So Greenspan is arguing that the poor slobs in the boonies just
> don't understand
> the harsh needs of competition in this Posnerian world.
> -- Nathan Newman