the positive critique

Wojtek Sokolowski sokol at jhu.edu
Fri May 5 08:10:11 PDT 2000


At 03:52 PM 5/4/00 -0400, Max S. wrote:
>I don't quite agree, but I have to throw in Joan Robinson's
>line re: marginal utility, which goes roughly like this . . .
>A child picking and eating berries continues until the effort
>in picking the last berry offsets the satisfaction he gains
>from picking and eating the berry . . . in other words, when
>he feels inclined to stop.

The point is not that the concpet of marginal utility is useless, but that what the Chicago boys do with it is. That is, the pojnt is not to model the hypothetical utility function with elegant equations, but being able to identify conditions that determine different levels of satisfaction derived from the berry and the levels of dissatisfaction produced by physical effort to pick it.

To illustrate that with a simple example - fishing or olympic sports require a lot "picking" effort and very uncertain and meager payoff - so according to the neoclassical "wisdom" - it should not exist. Yet they do and is quite popular. That means that (a) fishermen or athletes are "irrational," (b) fishermen and athletes must derive some form of satisfaction from their activity after all, or (b) the rat-choice behavioral model does not do very well in preciting/explaining human behavior.

Choice (a) is implicitly assumed by the punditry (who belive that only the rich are rational, hence must be rewarded handsomly to work; wheres the poor are not, and they will not work if paid too much).

Choice (b) is circular reasoniong that seems to be popular among economics professoriate.

Choice (c) is the only logical conclusion one would draw, if neoclasscial economics were a science rather than metaphysics, as we define these terms today.

wojtek



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