[lbo-talk] An Idiosyncratic Road to Crisis Theory

[michael perelman]

As an undergraduate, introductory microeconomics didn't make any sense. 
After a few weeks, I realized that it was easy to get a good grade until 
by working backwards. Since the goal was to show that everything worked 
out perfectly, all you have to do on an exam is to start with the answer 
that the market creates the best outcome, then work backward to figure 
out what would make it occur. Economics soon became my easiest class. 
Although I do not follow that procedure anymore, I am convinced that 
much of the economics profession still does.

Eventually, some seemingly obvious questions began to trouble me. 
Economics, which purports to explain the nature of a capitalist system 
motivated by profit maximization, lacks a theory of capital as well as 
any coherent explanation of the determination profits. One of reasons is 
simple: economics generally deals with a static conception of the world, 
yet fixed capital, which becomes increasingly important with the 
maturation of capitalism, calls out for a dynamic analysis, even with a 
static conception of the world.

Read more at:

http://michaelperelman.wordpress.com/2009/07/20/an-idiosyncratic-road-to-crisis-theory/
-- 
Michael Perelman
Economics Department
California State University
Chico, CA
95929

530 898 5321
fax 530 898 5901
http://michaelperelman.wordpress.com