>socially desirable outcomes. The behavioral model used by neoclasscial
>economics implies that human behavior can be controled by external
>stimuli (e.g. by changing the cost/benefit structure), and theoutcomes
>of that control is predictable (by the utility function). If you alter
>that model, either by adding a cognitive aspect to it (i.e. people's
>ability to cognitively framing and either altogether ignoring or
>excessively focusing on certaion aspects of cost/benefit structure), or
>by assumimg positive feedbacks of external stimuli (instead of negative
>feedabacks implied in the "law" of diminishing returns), or by positing
>a non-linear relationship between input and output (in which minimal
>changes in the input can create disproportionally large changes in the
>output), its ability to predict associate predictable outcomes with a
>particular set of stimuli is nil.
You make it sound complicated. The main problem with economics as it is practised, it seems to me, is just that they make it seem much more complicated than it really is. Essentially economics is a small corner of the study of society. Those who start trying to be mathematical about it are just missing the point, it isn't about how much, but why.
As for this "cognitive aspect" aspect you mention, I see the point you are making. But it isn't just that there are different judgements of value, but that there are logical reasons why the same needs and desires should be valued quite differently in different circumstances. Not only that, but in many cases there are big time lags, at least a generation, between economic cause and social effect.
If you are brought up in poverty, for example, it will have a dramatic effect on your patterns of thought and behaviour. You will take that with you to the grave, as you do most ingrained patterns of thought. Hence, Keynsian full employment seemed to work, as applied to the depression generation. But it was a flop with the next generation, who as a result had no fear of the workhouse ("the pit" as Jack London put it) ingrained in their psyche. The ruling class could do nothing about the ingrained thinking of that surly and unproductive generation.
>It is so, because the ability to cognoitively "filter out" or "filter
>in" certain determinats of individual behavior may interfere with the
>effects intended by the managers. The nonlinear relation, while
>theoretically solvable, suffers from the measurement error problem i.e.
>the minuscule change needed to produce the large scale outcome may be
>either launched accidentally or missed altogether due to imperfect
>measures (the capacity to meausure human behavior is much inferior to
>tyat of meaasuring physical phenomena).
Maybe the real problem is that human beings are doing the measuring?
>Therefore, we will likely to see neoclasscial economics being treated as
>the ultimate wisdom, because it serves the interests of the managerial
>class by creating an illusion that the managerial class is in full
>control of the situation, and by legitimating that control by supposedly
>having unique skills and powers that ordinary mortals do not possess or
>understand (hence the obscure jargon of the neoclassical discourse).
>From that point of view, neo-classical economics is what geo-centric
>astronomy and Latin was in the middle ages - it gives the aura of power
>and legitimacy to the ruling and priestly classes.
All I know is that my bullshit detector goes berserk every time I hear an economist speak. I suspect they are deliberately trying to confuse us about things which are really quite simple and can't help suspecting if perhaps the intended function of the profession is not simply that of smoke-screen and camouflage?
Bill Bartlett Bracknell Tas