I had intended to remain out of this discussion as Randy and John, with support from Wolfram and Terry, left me nothing more to add.  However, when the discussion turns to calling others statements made in earnest  - "amusing" - I do have something to add.   One, that such a characterization is insulting, I hope we can get back to a serious discussion.

That said, Yoshinori writes "As Lakatos argued, any research program have a hard core and protective belts. Terry and Wolfram are talking about protective belts. When we want to define a school of economics, we should detect the hard core. Political opinions and arguments belong to protective belts.".  

Let's take Lakatos' position as valid, and also accept Yoshinori's further statements about Terry's and Wolfram's statements as talking about protective belts.   The question is begged - who says neoclassical economics is a "research program"?  Or said differently - who says that neoclassical economics is anything more than protective belts? Yes, neoclassical economists  do, but does it meet Yoshinori's two pillars?  That is, does it continue to research,

(1) a framework of analysis based on agents' optimization and system's equilibrium,
(2) a value theory built on the above framework, i.e. a theory that economic states can be described by the equilibrium point of demand and supply functions. 

[As Ayres writes, "Economics is nothing if it is not a science of value.", and I agree, I find it unconvincing that a 'value theory' - or any theory - would be built on a 'framework of analysis', as opposed to the other way around, but this is not essential to my argument below and I don't want to be sidetracked]

There is no debate that (2) - neoclassical value theory - "was formed at the time of Jevons and Marshall". As Jevons presented it he argues for the objective measurement of [marginal] utility as a cardinally measurable unit of 'utils', which in a competitive market would equate to price.  A research program based on such a a theory calls for researchers to measure the 'utils' that consumers acquire from their purchases in a competitive market, and then to compare it to the prices they were willing to pay.  Such a theory is subject to falsification.

What then became of this research program?  A cardinally measurable utility raises the immediate questions of; the possibility of making interpersonal utility comparisons, the question of the possibility of aggregating individual utilities, and further, the question of the effect of the redistribution of wealth on social welfare.   Robbins rejects the concept of objective utility, declares iutility normative rather than positive, and answers the above questions, no, no, and un-determinable.  

What we have left is a framework of analysis, optimization and equilibrium, sets of simultaneous equations, which always, after impressive twists of deduction, arrive at the tautological, and therefore unfalsifiable, equivalence of utility to price.  Is this a research program at all in the sense of Lakatos?  Where is the hard core?  

Linwood Tauheed





On Sun, May 5, 2019 at 3:07 PM Yoshinori Shiozawa <[log in to unmask]> wrote:
Terry and Wolfram's comments are amusing, but are missing the target. As Lakatos argued, any research program have a hard core and protective belts. Terry and Wolfram are talking about protective belts. When we want to define a school of economics, we should detect the hard core. Political opinions and arguments belong to protective belts.

In my last post, I wrote about theoretical framework. I was talking about the hard core of classical and neoclassical economics. Hick's characterization may be too coarse as a definition and we have to add more words in order to get a clear definition of the hard core of the neoclassical economics. It must contain at least two pillars:
(1) a framework of analysis based on agents' optimization and system's equilibrium,
(2) a value theory built on the above framework, i.e. a theory that economic states can be described by the equilibrium point of demand and supply functions. 

(1) is more general and characterize the methodology of neoclassical economics but remains too abstract. As a hard core of economics, it needs to contain the second pillar. The prototype of (2) was formed at the time of Jevons and Marshall, but it is better to say that it was Marshall who created the very prototype in the form of crossing point of demand and supply curves. This is what I believe as the rough history of economics in English speaking world. Cases of countries in the European continent may be very different.

Yoshinori Shiozawa  


--
Linwood F. Tauheed, Ph.D.
Associate Professor of Economics
iPhD Program Coordinator for Economics
University of Missouri-Kansas City
5100 Rockhill Road, 202D Manheim Hall
Kansas City, Missouri 64110