Arrow-Debreu model does not imply stationariness.

The misunderstanding I want to get rid of is the one that equilibrium implies stationariness. This is not necessarily true for the Arrow-Debreu model.

The Arrow-Debeu model can comprise any finite number of markets. Although it may contain many futures markets and contingent markets, all markets (including futures markets) are held at present. Contracts on future goods force the sellers to deliver products and services in the stipulated future time. The delivered goods and services form a part of endowments for the person who has bought them at the time of delivery.

Now the preference for futures goods does not necessarily assure that delivered goods and services have the same quantities as the presently delivered ones. Then, if a market is open at a time in the future, the market will quote different prices as the present ones.

Even I argue for dissipative structure, I do not deny the vital importance of the stationariness of economic states. They may fluctuate but normally remain within narrow "corridors" (Leijonhufvud) for almost all times. Stationariness of the economy forms the necessary conditions that humans with their limited rationarity and myoptic sight can behave with certain levels of efficiency.

For the details of this point, please see my paper:

The primacy of stationarity: a case against the general equilibrium theory

https://www.researchgate.net/publication/233943723_The_Primacy_of_Stationarity_A_Case_against_General_Equilibrium_Theory?ev=prf_pub

Article The Primacy of Stationarity: A Case against General Equilibrium Theory

Dear Yoshinori,

for me as a person who studied many dynamical systems before doing economics, such dominant concept of equilibrium also looked strange. However, I found it difficult to convince economists and to publish and decided to respect it.

I do not think that it makes sense to abandon it completely. I would rather be for the tolerant approach that will give dynamical system equal right. I do not think that dissipative structure (that is only an example of dynamic system; there are also waves, evolutionary equations and many more) should replace something, but they should be given a chance in modelling socio-economic systems.

Thank for your quick response. Equilibrium is so deeply entrenched in economic thinking and it is now the major "epistemological obstruction" (G. Bachelard) for the further development of our science.

 Keynes once warned us:

•  the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else.  Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economists. (General Theory, Chap. 24)

Keynes cited "practical men," but we researchers are no exceptions. Theory workers have the highest chance to be trapped in a wrong framework. We have to be aware of this fact and must always try to check if we are going in a right way. It is necessary to psychoanalyze ourselves. This is reason why I raise my question.

Tolerance is the vitally and urgently required value in politics, but in epistemological affairs it may blur the issue and delays the breakthrough that is urgently needed if economics remains to be a science relevant to our lives.

Yuri must have tried and found it difficult to convert economists from equilibrium thinking. I have the same experience as Yuri's. Don't give up, however. The time is changing. Even mainstream economists are reflecting in their mind where the trouble is with economics. They are wondering if the real problem lies in as deep place as the very core of the economic science.

I know the ambiguity of my question. I contrasted equilibrium and dissipative structure. But I gave no economic definition on the concept of dissipative structure. The concept is rather clear in physics and chemistry. But how about in economics? What is the real difference between equilibrium and dissipative structure in the case of economics? I will try to make clear this point in the next post, although it may not be a complete one.

Why am I concerned with dissipative structure?

Dissipative structure in physics and chemistry is an open system that is thermodynamically stable and exchanges matters and energies with its environment. Existence of the material flow permits the dissipative structure to keep it in steady state in spite of the universal effects of the second law of thermodynamics.

However, how to conceptualize dissipative structure in economics is not easy. Of course, any economic system cannot violate physical laws. As an ecological system, any economy must be a dissipative structure, because no activities are possible in thermodynamic equilibrium. Economy as a whole extracts energies and matters from sun and from earth (e.g. mining from underground) and discharges wastes and heat in a way or another. My question is not that simple one. We have to characterize dissipative structure as an economic system. We have to learn from physics and chemistry but must construct the concept as that of economic system and I want help on this point from researchers of different fields.

Apparently, equilibrium and dissipative structure have a similar feature: stability or invariance in time of macroscopic features. The most difficult point (as Yuri encountered) is why equilibrium concept is to be abandoned despite the predominant aspects of the real economy that shows the repetition of almost all economic activities. The strongest reason that most economists accept equilibrium frameworks is this economic stability. They believe that the first condition tha an economy must satisfy is the equilibrium conditions.

Many heterodox economists argued that economy is more dynamic and therefore equilibrium is not well adapted in economic analysis. I doubt this approach with two reasons:

(1) To emphasize the kaleidoscopic characteristics (Shackle) of the economy deprives the foundation of our routine behavior. Economic agents have limited capabilities both in reason (logical inference capability) and sight (information gathering capability). If the economy is always changing extensively, we have no capacity to manage ourselves in such a world.

(2) Dynamic analysis must deal with much more unpredictable variables and we cannot get any firm reasoning. Economics will be a collection of many impressive but miscellaneous facts but without no principles or theory.

If we argue for dissipative structure, we are obliged to fight two-front war. In the first front, we should fight against the entrenched habits of economists' thinking. In this front, we must persuade economists that

(1) Equilibrium theory (e.g. Arrow-Debreu model) does not in fact assure the stability of economic systems, and

(2) Stability of economic system is guaranteed by some other mechanism than the equilibrium that consists of the equality of demands and supplies for all commodities.

In the second front, we should construct a new theory (hopefully and probably called dissipative structure theory) and show that the new theory can analyze economic process much better than equilibrium theory.

Two concepts which hide in the back of "equilibrium" formulation

 As I have pointed in the first post in this question thread, it is not true (at least for Arrow-Debreu model) that equilibrium assures time stability or invariance of the economic states.

 This argument is different from so-called stability problem of the equilibrium. The latter asks if a state out of equilibrium approaches to an equilibrium. The time stability asks if the state remains invariant when equilibrium is attained as the equilibrium theory assumes. It inquires the transition from an equilibrium to another.

 Suppose that equilibrium is unique and natural endowments are constant for all agents and periods. Given a state of endowments, an Arrow-Debreu market holds and the concluded contracts on future goods and services determine the state of endowments for the future economy. If the endowments thus derived are not identical to the endowment of the previous period, the market prices and transactions would be different. Then some extra conditions are required to affirm that the series of equilibriums remain invariant.

 Although he used the same term as equilibrium (or Gleichwicht), John von Neumann investigated an essentially different process. He asked when a system of prices and productions are repeated in such a way that the same prices hold and productions grow uniformly. To be more precise, if we put pi(t) and qi(t) as the price and the quantity of product i at the time t  respectively, then the conditions von Neumann required are

       pi(t) = pi(t+1)  and  qi(t+1) = (1+λ)qi(t)  ∀ i and t.

 Some economists called this time series steady state or steady growth.

 Arrwo-Debreu equilibrium and von Neumann equilibrium are totally different concepts but this conceptual difference has not been examined consciously as far as I know. I am inclined to think that von Neumann type equilibrium is closer in conception to the dissipative structure than to the Arrow-Debreu equilibrium. It would be better that this “equilibrium” concept receive an different name, because actual custom continues to produce confusions.  

The trouble with von Neumann and other steady state models is they have no explicit behavioral process why this state emerges.

Lessons we can deduce from this short observation are two:

(1) The equilibrium (equality of demand and supply) and maximization (no incentives to change) do not by themselves are not sufficient for the economic systems to remain stable in time.

(2) The economic system (real economy in particular) remains stable by an unknown mechanism in economics. We should find and study this mechanism.

This is really interesting discussion and probably underdeveloped in economics. I became interested in this topic (as a non-economist) while writing a short book 'New Urban Management: Attracting Value Flows to Branded Hubs' (Palgrave, 2015), for I tried to conceive local communities and local economies as hubs of economic flows. This led me to two conceptualisations, Nicholas Georgescu-Roegen's flow-fund model and your discussion about 'equilibrium trap' and dissipative structure. Neither of them were elaborated further in the abovementioned book as the topic goes out of my competence.

In any case, I have to say that I never understood the relevance of equilibrium as developed in economics, as the stationary state in the economy simply does not have to be seen as theoretically constructed equilibrium in the first place. So, I wonder if the ultimate reason for such a thinking is the constant tendency towards formalisation in the economics, which probably benefits from 'theoretical worlds' that do not have to reflect the real-life ontology concerning both ontogenesis and homeostatis of economic systems. I am only guessing here.

For some reason, I still would not necessarily throw the idea of equilibrium overboard altogether, as there is a legitimate interest in the balance between economic forces and supply and demand, for example. What may become a problem, though, is if this discussion generates an axiom which is given precedence over evolutionary understanding of the economy. The latter conceptualises stationary state by referring to the real-life conditions for a socio-economic system, which through the internal and extra-local resource flows - energy, matter, artefacts and symbols - organised in a decentralised fashion maintain the essential aspects of its complex structure. Local economy is particularly interesting case as it provides endeless source for thought experiments (and empirical observations) that indicate the preference of dissipative structure over equilibrium model. It also shows how relative the idea of 'equilibrium' is at least in this context. Let us just think about Dubai as a growing economy from 1960s to 2010s and Detroit as a declining economy with the same time span. Wouldn't it be more fascinating to explain these cases as dissipative structures rather than as expressions of economic equilibrium? Well, if we take the analysis to this direction, it starts to require explanations that economists obviously did not have on their mind when theorising economic equilibrium.

Be as it may, if the stability of any such a socio-economic system is dynamic, equilibrium itself requires dynamic interpretation even to the extent that it warrants terminological reconsideration, as your earlier point indicates. This implies that we may see equilibrium as a formalisation of certain forces within given institutional context (i.e. interacting markets), which can be conceptualised in a qualified, formal sense as an 'equilibrium' within the ontological framework of dissipative structure or dynamically stable self-organising system which interacts with its environment. This may indicate that dissipative structure - as the concept indicates - shifts focus on genuine structural whole, whereas equilibrium is ultimately more relational concept, seeking ultimately the understanding of the aggregate outcomes of economic relations between economic actors. Well, this quick message is getting too long and fuzzy, so better to stop here. Anyway, I wish there will be a chance to continue discussion and learn more about the idea of dissipative structure in economics.

Dear Yoshinori,

you write so much here that it could be the basis of an article. Why you do not compile it and post as unpublished research? I guess that it would be very difficult if not impossible to publish it in economic journal.

To be short, I think that the main obstacle towards dissipative structure concept in economics is the concept of rationality: stupid behaviour of agents (that can work as dissipative structure) is not allowed. It is even more important in mainstream than equilibrium. It also often produces unstable equilibrium. Stability of Arrow-Debreu equilibrium is usually not addressed.

Also look at game theory, where egoistic rationality without any altruism gives rise to paradoxes like Prisoner's dilemma where an equilibrium is not efficient to anybody.

There are several minor trends in economic literature that deviate from full rationality. The first is evolutionary game theory where agents behave like cellular automata or bounded rational. This indeed can produce dynamics.

Another possibility is to include random unexpected shock that cannot be accounted by rational agents. but then the system behavior becomes dynamically stochastic rather than dynamically deterministic.

I tried to address the raised question in some of my works. Mostly in conference papers.

Dynamic interaction of economic and natural blocks in the global system eliminates full rationality, because the nature cannot think. It is also possible to get dynamics in overlapping generations of different size (in economics they typically do not differ) because fertility depends also on conditions for living. I summarized two models that generate system of nonlinear differential equations (with rich deterministic dynamics) in this paper:

https://www.researchgate.net/publication/278110040_Low-Dimensional_Nonlinear_Dynamical_Systems_as_a_Tool_for_Socio-Economic_Modelling

The concept of altruism can also be used to change equilibrium in games for more socially efficient. When there is uncertainty about what game is played (is your partner honest or not), this also changes equilibrium. In section 4 my article below (2009) you can find such example: https://www.researchgate.net/publication/271497718_Socio-economic_influences_of_population_density

Another article https://www.researchgate.net/publication/271499741_Elements_of_Structural_Economics in section 4 considers the so called power game with deviation from self-regarding preferences, where an interest is not only to get maximal payoff but to bring harm to your rival. Does not it resemble the current evidence from the global affairs with all sanctions?

Conference Paper Low-Dimensional Nonlinear Dynamical Systems as a Tool for So...

Article Elements of Structural Economics

Article Socio-economic influences of population density

Dear Yoshinori,

in my work, which is mainly agent-based modeling. I don't throw out the notion of equilibrium completely. I rather ask what is the economic significance of the path to equilibrium (especially if we never reach it, because it takes to much time or some underlying assumptions are changing)

For example, we find that if we model the supply network of firms, monetary injections lead to a temporary increase in the coefficient of variation of prices. In this transition time, the economy is not in equilibrium. We find also that there is forced saving, which decreases the short term utility of the consumer.

Davoud

Dear Ari-Veikko Anttiroiko, 

I am also interested in local economic development, because I worked for a long time for the Osaka City University, which is founded and financed by Osaka city. My main inspiration is Jane Jacobs. This year (2016) is the centennial anniversary and I am organizing some events with my colleagues. Have you read her book The Nature of Economies (2000)? It is famous, because Robert Solow (a Nobel prize winner) wrote a very critical review on it, but Solow did not understand what Jane Jacobs wanted to point out. Although she did not used the term "dissipative structure," I think she wanted to emphasize that economies, local economies in particular, are in fact a dissipative structure. Solow read the book only through the eye and prejudgment that economy can be well or best understood by examining it by equilibrium framework. What Jacobs explained is understandable for any learned non-economists, but not for trained economists. This is the problem of present day economics. 

You have mentioned the balance of forces of supply and demand. This is the oldest parable as I mentioned in my question. However, it made a wrong tradition that it is the price movement which adjusts the balance to the equilibrium. The parable is true for organized financial markets, such as stock markets and their derivatives ones. Walras mentioned explicitly that he had got his idea from the Bourse de Paris. 

Is Walras’s idea representative of the economy? Think, for example, of industrial products. They counts more than tens of millions of different items. Most of them are not adjusted by the ups and downs of prices. It is impossible. Who observes the balance? Who adjusts the prices? Auctioneers? We have no such persons, no such mechanism. Industrial products are adjusted by the producers (or shop keepers). The simplest way is to price their products by mark-ups and produce as much as they are sold. In a normal situation (which counts more than 99% of time I believe), the supply is adjusted to the demand in this way and by no means by the price movements 

This simple fact illustrates how deeply the equilibrium idea rules our imagination. Demands and supplies are always adjusted but not in the way the price equilibrium parable indicates. So, the balance of supply and demand story is not the legitimate reason to conserve equilibrium framework. On the contrary, it proves the necessity to overthrow the idea of equilibrium. It has accumulated so many bad habits in economic thinking.

Dear Yuri Yegorov,

you have listed so many must reads. Please give me some time before answer to your posts.

With regrads

Dear Yoshinori,

you may not read all text of the 2nd and 3rd paper, but only listed sections 4 (unless you find it interesting). Regarding equilibrium, there are several examples where it fails in reality. I just published a paper about LNG arbitrage (December 2015, with Wirl and Dehnavi), but it is not in free access, so if you cannot reach the listed DOI, please go for working paper with earlier version: https://www.researchgate.net/publication/269871336_Is_LNG_Arbitrage_Possible_in_Natural_Gas_Market

I also made brief presentation of this and 2 other cases where classical economics does not work: https://www.researchgate.net/publication/283908856_When_Classical_Economics_Does_not_Work . Interestingly, it was well accepted by economists.

Another example is the dynamics of oil prices. Nobody can forecast it correctly and I guess that it is difficult to justify the process in this market last year (drop from $100 to $30) even as dynamic equilibrium. Yes, oil price is highly sensitive to small changes in demand, also there is sluggishness... (there are works of Franz Wirl about it, like https://www.researchgate.net/publication/222403287_OPEC_as_a_Political_and_Economical_Entity )

But all market participants are worse off today (no OPEC country can balance its budget) and while USA maybe not worse off (it is more consumer than producer), its shale oil sector has disastrous time. If somebody will develop a theory similar to one of Arrow-Debreu (based on whatever equilibrium concept including one you suggest) but able to predict what will happen with oil price at least few months from now, this will deserve Nobel prize!

Article Is LNG Arbitrage Possible in Natural Gas Market?

Conference Paper When Classical Economics Does not Work?

Article OPEC as a Political and Economical Entity

Dear Shiozawa-sensei,

Thanks for your englightened points. I have actually visited Osaka City University couple of times quite some time ago, hosted by Prof. (emeritus) Toshio Kamo, if you happen to know him.

The tip of Jacobs' book was great (I refer to her in my lecture on creative urban development, but it is mainly about Jacob vs. Moses controversy). I will certainly check that book in due course.

What I sympathise in the economics is their way of building models and theories, which contrasts from what is usually done in political science, for example. We simply have to strive for something more than just ad hoc explanations and stories. It goes without saying that the diminishing returns of 'theoretical worlds' are the risks of economic theorisation and may be disasterous at times.

Your example of industrial products was instructive, indeed. Yet, if it shows that the process follow producer or retailer based logic, I guess they also show that any of such a 'gatekeeper' or key economic actor is price-conscious and makes situational judgments of volumes and prices of products within given constraints. Doesn't it imply, first, that price mechanism is an abstraction, and we should see prices as explanandum rather than explanans, and second, that issue of supply, demand and price mechanism is a kind of social construction that becomes reality through individual rationalisations of key economic actors? The question is, thus, what are its implications for economic theory? It also sets a challenge to figure out how rationalisations relate to the fundamental logic of dissipative structure. Well, I am going to unfamiliar terrain again, so better hold the horses (my speciality is local government studies and public administration). Thanks for your kind reply and do keep up developing a badly needed new economic theory!

All the best,

Ari-Veikko

Dear Yoshinori, I fully agree with you. Two little hints about this are:

a) On the one hand, you know the NESS program, a research program launched in Europe in 2005 (aprox.):

http://global-systems-science.eu/gss/content/ness

Dear Yoshinori, I fully agree with you. Two little hints about this are:

a) On the one hand, you know the NESS program, a research program launched in Europe in 2005 (aprox.).

b) Authors such as P. Ormerod have pointed out to the dangers of equilibrium, and the need to cope with non-equilibrium systems.

I cannot help mentioning the pioneer work by N. Georgescu-Roegen, that you already know.

Being as it might be, the crux of the issue remains the critique to the production function. Without a robust critique to it, any economical discourse remains harmless.

Dear Ari-Veikko,

 I thank you for your contribution.

 I know Toshio Kamo very well. We worked for Osak City University at the same period.

 As for Jane Jacobs, if you are interested in local economic development, please read her three other books:

•  Economies of Cities (1969)
• Cities and Wealth of Nations (1984)
• Systems of Survival (1992)

 The first book illustrates how new products and services emerge in a city and how the latter help them. The second book preaches that it is the cities or city regions that are really promoters of economic development and not the nation-state which has been treated in economics as the unit of economic development. The third book treats the questions of work ethics. This book inspired many Japanese economists and sociologists and several books were written by her theme.

 Models are important tool of analysis for economics. I do not deny its utility and usage. My own research is sometimes very mathematical. See for example the paper cited below.

I am also in favor of agent-based simulations. Some economic problems are intractable by a mathematical method and agent-based simulations are useful for many aspects. 

Mathematical models and computer simulations are useful tool of analysis, but it is important to use them properly. Many economists are used by them. For example, when a good new model is introduced, perhaps 100 economists write papers only modifying some assumptions. A typical example is now popular Dynamical Stochastic General Equilibrium model. It is astonishing that some economic policies are supported based on this purely imaginative models.

 It is quite difficult to judge which of economics and political science is saner as social science.

Article International trade theory and exotic algebra

Dear Yuri,

 Sorry, I have to be brief.  

 I have read (or more correctly peeped in) some of your papers. The paper on natural gas market was particularly interesting, because you are discussing gas prices in Japan. I once heard that gas companies wrongly made a fixed price long term contract. This may also influence the price differentials between US and Japan.

Random network theory must be useful for various fields of the economy. I am studying it but do not arrive to use it constructively. It must be useful in characterizing the economy as dissipative structure.

 I totally agree with you that emergence of structure is a lacuna both for neoclassical and institutional economics.

You use the term “classical economics” differently from the normal usage. What you mean by these words is standard or mainstream economics. Classical economics is opposed to neoclassical economics. My understanding is that classical economics and neoclassical economics are quite different and the latter is constructed on the denial of the former. As Hicks once pointed it, the introduction of marginal analysis is only a superficial change. Real revolution that occurred between classical and neoclassical economics is the change from the economics of production (plutology) to the economics of exchange (catalactics). See for this point the paper or presentation data cite below.

Although I believe that Ricardo’s value theory and its international version form the core of classical economics but I also admit that there are two major lacunae. One is theory of labor market and the other is the theory of finance economy. Theory of rent and exhaustible resources is explored to some extent, although there remain may difficult questions.  It is interesting that you are attacking these remaining areas unexplored by classical economics.

Conference Paper The Revival of Classical Theory of Values

Data PowerPointPresentation_The Revival of Classical Theory of Va...

Dear Carlos Eduardo Maldonado,

Your last sentence:

• Being as it might be, the crux of the issue remains the critique to the production function. Without a robust critique to it, any economical discourse remains harmless.

This is extremely important point of argument. All economists must know the works such as Anwar Shaik (1974), Herbert A. Simon (1979) and many papers by J. Felipe and J.S.L.McCombie.

Please, Carlos, develop your point further. It deserves a new question page and a long discussion. So many economists are cheated by the unique fact that Cobb-Douglass and CES functions have a good fitness. Friedmanian instrumentalism or false pragmatism helps to prolong this misconception.  

References:

Anwar Shaikh (1974) Laws of Production and Laws of Algebra: The Humbug Production Function, The Review of Economics and Statistics 56(1): 115-120. 

Herbert A. Simon (1979) On Parsimonious Explanations of Production Relations, The Scandinavian Journal of Economics 81(4): 459-474. 

Jesus Felipe & John McCombie (2011) On Herbert Simon's criticisms of the Cobb-Douglas and the CES production functions, Journal of Post Keynesian Economics 34(2): 275-294. (to cite the most recent one)

Dear  Yoshinory

Equilibrium is claimed as interchange mode in Adam Smith, D. Ricardo and C. Marx, but  this is not the case in economic interchange.

When there are different conditions in markets appears a "plusvalue" only caused by different pricing of merchandises by individuals, or using more technical language reference systems. Equilibrium is produced locally in a market where actors have same reference system to evaluate prices. People is ready to formulate equilibrium theories.

Is is possible to regulate international interchange and to compensate inequalities coming form various reference systems, an equilibrium approach will be usable.

Other problem is that "plusvalue" coming from different reference system are easy-gain and produces predatory attitudes in economic actors, violence and war.

Not a simple problem

Dear Shiozawa-sensei,

Thanks for another inspiring and informative reply. I had to burst into laughter when reading the last sentence, as I never thought of such a comparison. My guess is anyway that political science may be less harmless, for as you put it: "It is astonishing that some economic policies are supported based on this purely imaginative models."

A lot to digest. I will set myself to go through the works of Jacobs in the coming spring.

Take care,

Ari-Veikko

Dear Yoshinori,

thank you for the remarks and inspiring discussion. In fact, neoclassical economics is often given to modern economic student even without mentioning classic, unless they attend a special course of history of economic thought. If you open standard university book on microeconomics, it will be fully neoclassical. So my argument indeed was with neoclassical economics.

Random network theory may be an interesting approach, but I doubt that economists know the proper math to swallow it. Theory of networks was developed more by computer scientists and physicists. They address the questions like the length of longest component, distribution law for connections and similar, far from economic questions. If we put market on random network, it indeed should kill full rationality, since nobody knows its exact structure. A good example of market driven by random network in market in arts.

But we often do not have equilibrium in spatial economy. Price difference for many goods are above transport cost. In the past (100 years ago) price patterns in agriculture were like weather iso-lines, continuous. Now not farmers but stock markets define agricultural prices, and predictable spatial pattern has transformed into high temporal volatility.

Sir,

You wish to change the edifice of economic analysis while keeping yourself comfortable within its sharply fabricated boundaries. How can one build a home while living under the same roof one is going to recast? An incremental approach to emancipate economics from unanswerable questions is one thing and, contrastingly, rewriting the discourses or rebuilding the structure is another. How many assumptions/axioms can be reformulated is not the issue. Rather, how many parts of the system cannot be saved is more contemplative an issue.

I beg your pardon for writing these words. I am very sorry because I do not have much knowledge and expertise.

Best regards

Israr

Dear Yoshinori and company,

All of you are making a common mistake about the concept of equilibrium in modern economics. There are two concepts that are not used interchangeably: equilibrium in the real world out our windows and equilibrium as a property of formal mathematical models.

I would say that the main problem in modern economics is that our departments have be taken over by the mathematics department's culture. Realism is less important than elegant proofs.

I have discussed some of the problems of A-D GE models in Chapter 2 of my 2014 book: Model Building in Economics: Its purposes and Llimitations (Cambridge U.P.). And I am currently working on a book that expands on that chapter. If any of you are interested, contact me at [email protected] and I will send you the Outline and Preface.

LB

Dear Lawrence,

thank you for entering in our discussion. I also thank  for the mention of your book and your kind offer to send me  Outline and Preface. I will send you my e-mail address separately. 

You wrote:

• There are two concepts that are not used interchangeably: equilibrium in the real world out our windows and equilibrium as a property of formal mathematical models.

This is the main  reason why I posted my first "answer" (post number 1)  "Arrow-Debreu model does not imply stationariness." Economics seems to keep almost stationary state and this is, I assume, the biggest reason that equilibrium framework has been adopted and supported for a long time. This misunderstanding occurred because no other physical system that remains stationary was known in the 19th century and the first half of the 20th century except equilibrium systems. Now we know many important examples, from physical and chemical systems to living systems, that are not in equilibrium but stay stationary or keep their form stable. They are dissipative systems.

Now we know dissipative structure. Our image on economic systems and its working can change. This is the point of my question.  

You also wrote:

• our departments have be taken over by the mathematics department's culture.

It is quite arguable if "the mathematics department's culture" you call is really mathematical in spirit.  True mathematics is to find a new mathematical structure (often inspired by the necessity to clarify what is obscure in the phenomena we observe.) and develop a system of concepts by which to analyse the phenomena we are interested in. Actual state of many economics department may be more suitably described by the lack of true mathematical spirit.     

Dear Lawrence Sir

You are welcome. But, may I request you that the persons posting their opinion here on RG are not a company. Are they? They have, most of the time, independent opinions based on their environmental and experiential background.

Moreover, I would be thankful to you for providing an opportunity of reading your scholarly works. My email is: [email protected]

Regards

Hi Lawrence,

It is always good to hear opinions of those who are trained to understand and develop economic models. Your point on "Realism is less important than elegant proofs" nails it. However, our supposed "common mistake about the concept of equilibrium in modern economics" is probably a result of our naive idea that scientific models should have something to do with the reality they have been built to describe. This is the circle around which critical discussion about economic models seem to revolve, with little effect on mainstream economics. The dogs bark but the caravan moves on ...

Best,

Ari-Veikko

Dear Ari-Veikko Sir,

Really, 'The dogs bark but the caravan moves on ..' Moreover, it is not the same caravans that always move...

Regards

Dear Lawrence,

I am reading these discussion interstingly.

I appreciate very much if you send kindly me your ‘Outline and Preface’.

My adores is ‘[email protected]’

Best regards

I remember that Lawrence and I had exchanged a long argument in my question page:

• Why are economists still deeply influenced by the methodology of Milton Friedman?

https://www.researchgate.net/post/Why_are_economists_still_deeply_influenced_by_the_methodology_of_Milton_Friedman

It starts from Lawrence post (post number 17) and continued until his last post (post number 39). Lawrence's last answer was posted November 12, 2015.

I restarted my post in the same page. Those who are interested, please see the question page above cited. I became a satirical comedy writer.

Dear Yuri Yegorov,

I have read one of your three papers in your first post :

• Elements of Structural Economics

which was published in EIER (Evolutionary and Institutional Economics Review).

I am pleased to know this, because I am one of founding members of this journal. I have written a "Manifest" to the 1st issue of the 1st volume of the journal. See

• Evolutionary Economics in the 21st Century: A Manifesto

which I have uploaded in the RG.

The Evolutionary and Institutional Economics Review welcomes papers that give new insight to economics. Those who have no chance to publish their papers by the reason that their styles of analyses and arguments are not conformal to main stream economics are encouraged to submit their papers to the journal.

You emphasized in the paper above that traditional economics (neoclassical and institutional) lacks a direction of research: emergence of structures (§2.2). I totally agree with you. Research interest in this direction is really lacking in most of economic papers. This is also one of reason why I have posed my present question.

It is hard to see equilibrium as a structure, whereas dissipative structure has the least elements of a structure. I have not posed the question of its emergence, only because dissipative structure has no wide acceptance as the normal state of economic systems.

Your comment on the state of physics is also very important to economists.

• While it [physics] has no unique methodology (even the general theory of field is still absent), it contains many self-consistent formalized theories based on sets of formal axioms (assumptions) and applicable under certain parameter limitations. (§2.2)

Many economists misunderstand that physics has a unique unifying system of laws and it is constructed as a coherently constructed systems of theories. It is true that physics has this quality much more than many other sciences and social sciences in particular. However, wit a closer examination, physics is divided to many theories and each theory has its own domain that the theory can explain.

Many economists are misunderstanding this fact. A typical result of this misunderstanding is that mainstream economists tries to give general equilibrium as unique framework and academic journals have strong tendencies to reject a paper that deals only a specific part of economic system. If we consider of our intellectual capability, it is important that an economist pay special attention to a phenomenon and clarifies its nature. We cannot understand all by a single strike. A possible objection to this is that economy is an integral part of the whole and it is not possible to separate a part from the rest. This objection well applies to physics but physicists know well how to pick up relatively separate aspects of the phenomena.

You have cited Szabó and Fáth (2007) Evolutionary games on graphs (§2.5). It is very hopeful that their work may give a new framework for the investigation and analysis of economic dissipative structures.

In the conclusions (§6), you wrote:

• At present, institutional economics deals more with verbal description of structures, while neoclassical economic theory has advance in mathematical description only of economic interaction between individuals via market mechanism, but does not consider complementary self-organizing forces that lead to emergence of stable structures and their evolution.

I agree with you for the most of these observations. A small but important objection on the second part is that the word "complementary" is to be omitted. If you say self-organizing forces are complementary, it means you admit that economic interactions between individuals are well described by the present neoclassical equilibrium theories. I am opposing this conception itself.

This is very important, because the typical economic interactions are bilateral transactions between individuals (in this category you may include firm, families and the State). This interactions form a network as large as global economy. Exchange is the principle that regulates these interactions. You may be thinking that families, firms and states (governments) are structures which emerges among economics interactions. However, the market economy or the transaction network is also a structure and far from equilibrium. This is the main target that the economics should analyze.

My question Equilibrium versus Dissipative Structure is concerned on this point.

Article Evolutionary Economics in the 21st Century: A Manifesto

Sir

I have gone through your paper. It is, no doubt, a revolutionary approach. Amusingly, it does not resemble the tone of the Communist Manifesto (1848).

Regards

It is quite simple: if a theory does not connect with actual events in space and time then it cannot be classified as part of 'science' even in the broadest terms. But, worse, such unrealistic theories are vulnerable to ideological manipulation. Parables set in other worlds and logical exercises conducted in mathematics can spark insights that are useful in doing science but nothing more. So, a very large amount of theoretical research in economics is not science but, usually second rate, mathematics. Looking at economic phenomena as being generated by dissipative structures, in contrast, is well connected with reality. Such structures exhibit 'order' not 'equilibrium' in the sense used by mainstream economists, such as Krugman. I have been writing about this now for about two decades and I am yet to find a citation in the mainstream economic literature . Since the ideas are not totally foolish, I can only conclude that  this kind of literature is avoided because it poses such a fundamental challenge to those who use the 'constrained optimisation in equilibrium' analytical core in their research.

Thank you, Isnard. The paper is long. It counts 43 pages. I have to say special thanks that you have read through my paper. The paper was written more than 10 years ago. There are some points that I have changed my ideas and some comments that I have to add.

 (1) Word "Manifesto"

The word "manifesto" was used not in association of the Communist Manifest. In 20033, an ex Governor Kitagawa of Mie Prefecture started to campaign for presenting more detailed program at the time of local head elections. He borrowed the term "manifest" that was used in Great Britain and the word manifesto became rather popular in Japan. When we started to discuss the possibility to inaugurate a new journal, I proposed the would-be editors meeting to put our "manifesto" at the top of our journal. And I was appointed to write one as the person who proposed the idea. 

(2) Principal economic categories that evolve

In the paper I listed 4 categories as entities that evolve (or that can be understood when we see them as evolving entities):

• commodities
• technologies
• behaviors
• institutions

 As for firms, I was rather skeptic to call them evolving entities. The main difficulty was that they cannot be said to be reproduced. In the same vein, network systems were also excluded as typical examples of evolving categories. I discussed these points in subsection 3.5 and 4.5. After that, when I was discussing with my colleagues the principal policy of editing Handbook of Evolutionary Economics (in Japanese, published in 2006 by Kyuritsu Publishing Co.), I changed my opinion. I decided to include organizations and systems as evolving examples of economic entities. 

The evolution can be characterized by two kinds of triplets: 

 I came to know that the second choice was possible and I understand that the second triplet was more suitable to economics.

 Another reason that I included systems and organization was that any entity that evolves has shallow or deep layered structure of evolving entities. If we understand in this way, it is more natural to include organizations and systems (I admit this concept is very ambiguous). By the same reason it is natural to add knowledge as a system of entities that evolve. 

Now I normally list three more categories that evolve in addition to the above four:

• organizations
• systems
• knowledge

 Of course, this is not an exclusive list. Market economy itself can be seen as a system that evolves. It is clear that the market economy is a system which comprises many evolving entities and is itself open to evolution.

(3) Evolutionary economics that stands alone

In section 2, I required that the coming evolutionary economics must stand alone on its own theoretical basis. It means that the evolutionary economics is incompatible with the neoclassical price theory. I have given some explanations why we should not adopt the neoclassical price theory or Arrow-Debreu type general equilibrium theory. However, at the time of drafting the paper, I am not very sure about the theory of prices that we should take as the basis of the evolutionary economics. 

The classical theory of value at the year 2004 has a critical defect as a general theory of prices. I was thinking that Ricardo's cost-of-production theory of value could be a core of the theory. In the 20th century there were Sraffa's formulation and the results of Oxford Economic Research Group’s Surveys (See e.g. Wilson and Andrews (eds.) Oxford Studies in the Price Mechanism, 1955). However, it was evident that we lack a theory that can deal with international trade or commodity exchange. I had been working on extending Ricardo's trade theory to a more general case at that time for about 20 years and still I could not find a solution to my problem. It was in 2007 that I was able write the paper:

•  A New Construction of Ricardian Trade Theory.

 With this paper, I came to know that I was stepping a wrong path and after that I realized how to build a new theory of international values. I have written a book with the title A Final Solution of Ricardian Problem of International Values in 2014 (in Japanese). With this book I can say confidently that the classical theory of values should be the basis of the evolutionary economics. For the essence of my book, please see two of my papers:

•  The Revival of Classical Theory of Values
• On Ricardo's Two Rectification Problems

 All three papers are uploaded on my page in the ResearchGate.

(4) Micro-macro loop

I mentioned in my Manifesto this topic in subsection 8.4 (pp.40-41). If we think of its weight, I should have discussed it in the main part of the article, for example as a subsection in section 6.

Neoclassical economics assumes methodological individualism. After this methodology, an economy can be constructed from the behavior of individuals. The Arrow and Debreu model of a competitive economy is a good example. Given the consumer preference, producer technology, and ownership distributions of resources, equilibrium is defined in this construction. Equilibrium thus defined is thought to produce the present state of the economy. Schumpeter (1925) called this doctrine construction ab ovo (construction from an “egg” stage). Evolutionists have totally different images of how the present state of the economy is formed. All knowledge supported entities, i.e., commodities, technology, institutions, and individual behavior, are results of past evolutionary processes. They are all path-dependent. Ownership distribution of resources is also a result of past economic processes that are, in turn, a result of interactions of those entities. Evolving entities are a result of past selection processes, and what remains active at present influences the development of the economic process itself. 

The micro-macro loop is a causal relationship of evolving entities (micro=individual behaviors and knowledge) and the total economic process (macro=economy as a whole). If we observe the existence of micro-macro loops, methodological individualism is not sustainable. The refutation of methodological individualism does not imply that the methodological holism is acceptable. The latter must be abandoned as well. The concept of the micro-macro loop forces us to get away from the old dichotomy of individualism and holism.

I have not given my own idea why I think economy is a dissipative structure. I have written a brief paper Economy as Dissipative Structure (1996) at the occasion when I. Prigogine came to Kyoto (Japan) and had a conference in honor of him (See the paper below). I was mistaken to think that this was the first time I contended this thesis. In rereading my paper The Primacy of Stationarity: A Case against General Equilibrium Theory (1989), which I have cited in the first "answer" in this question page, I found that I already metioend that economy is a dissipative structure, although it was not the principal theme of the paper.

This lapse of memory occurred, because Yun Songa and Kun Guo 2015 quoted me in their paper that 

• Shiozawa (1996) proposed to regard an economy not as equilibrium, but as dissipative structure, which is a substantive change of logic of economics.

Emprirical Study of Chinese Stoch Market Structural Changes based on dissipative Structure Theory, Procedia Computer Scinece 55: 1040-1049.

http://ac.els-cdn.com/S1877050915015392/1-s2.0-S1877050915015392-main.pdf?_tid=a45b36c2-cd9d-11e5-b16a-00000aab0f6b&acdnat=1454851445_efd186aa1623643475621970408307cf

I expressed the thesis in Japanese in a book Reflections on Modern Economics (in Japanese: Kindai Keizaigaku no Hansei) which was published in 1983. (p.99) 

I have posed this question, when I found that a blogpost with the same contention in the blog Interdisciplicnary World by Troy Camplin.

http://zatavu.blogspot.jp/2012/07/the-economy-as-dissipative-structure.html

I searched if any other person were making a similar propositions and I found several authors were in fact expressing that economy is a dissipative structure.

I made a short list of literature that I have found. I will post it in the next post.  

Conference Paper Economy as a Dissipative Structure

Here is the list that I have found.

I have listed the name(s) of the author(s), the title of the document, and the text citation if possible.

This must not be the complete list in any sense. If you know any other cases, please post the papers and books that you know.

-Ivan Klinec (Slovake Academy of Science, Institute of Economic Research)

Design of Holistic Economics for a Global World, presentation data at The First Prague Workshop On the Futures Studies Methodology, September 16-18, 2004

-Economy as Dissipative Structure

-Gail Tverberg (member of RG, Fellow of Casualty Actuarial Society)

Our Finite World　cites that Francois Roddier talked on the Economy as Dissipative Structure in his book Thermodynamique de l’evolution, published in 2012 in France.

-Robert D. Bullard, Julian Agyeman, and Bob Evans "Just Sustainabilities: Development in an Unequal World" uses the expression "economy-as-dissipative-structure" once.

-Horst Hanusch and Andreas Pyka (both members of RG)

Elgar Companion to Neo-Schumpeterian Economics

https://books.google.co.jp/books?isbn=1847207014

• If we think of any economic system as a dissipative structure that imports energy and materials and exports products and waste, this structure should become both more ordered and more complex as it develops.

-Ari-Veikko Anttiroiko 2015 (He is an active follower of this question page.)

New Urban Mangement　/　Acttracting Value Flows to Branded Hubs, Palgrave Macmillan, 2015.

• Yoshinori Shiozawa (1996) of Osaka City University is one of the economists who have pointed out the probelms of the 'equilibrium trap' of neoclassical economics and tried to show the way out. The idea of dissipative structure may serve in building such a new paradigm, taking living systems as their exemplaray instances, which are able to maintain their functions due to their fuctioning as dissipative structure. It may and often does take the form of a stationary state, but it is nevertheless very different from equilibrium. The concept of dissipative sturcture makes it possible to have a new perception of how an economic system works, as within the dissipative framework the internal structure detemines volumes and speed of economic quantities (see e.g. Jenner, 1994). Yet Shiozawa points out that if the problem were only the existence of internal structure, the economic system could be approached as a self-organizing system. However, it is a system which constantly brings resources in, exports goods and generates waste, which calls for broader perspective on economic system and its functioning (cf. Shiozawa 1996; Foster 2011)

-John Foster (He has recently answered to this question page.)

Foster 1993 Economics and the Self-Organisation Approach: Alfred Marshall Revisited, The Economic Journal 103(419):975-91.

• If we view 'dissipative structures' in the economic domain as inertially forward-looking, rather than reactive, much in the manner of Marshall, then density dependent models, which can be stable over long periods, can be estimated econometrically.

-William E. Rees (University of Queensland)

Achieving Sustainability: Reform or Transformation?

Journal of Planning Litterature 9(4): 22-52.

This paper contains a section with the title "The Economy As Dissipative Structure" (pp.349-50).

I have found that Foster and Metcalfe are arguing emergence with "dissipative structure"  concept. See

Foster, J. and S. Metcalfe (2012) Economics Emergence; an Evolutionary Economic Perspective. Journal of Economic Behavior & Organization 82: 420-432.  Section 5.

This is a part of my e-mail to Gert-Jan Hospers.

• Recently I wrote a paper (in Japanese) on Jane Jacobs' book  The Nature of Economy and presented a new interpretation. Although she never mentions this term, I believe Jacobs wanted say that economy is a dissipative structure. She wanted to produce an objection to the economics's equilibrium framework. How do you think about it?
• Many years ago, I have written a short paper with the title "Economy as dissipative structure" (1996, You can find it in RG). At that time I was not aware that Jacobs wanted to say the similar thing in her own words. Recently I re-read her book and found that she must have pointed this. It is a clear and bold criticism against the very framework of mainstream economics.

I also want to know the opinion of the readers of this page.

thank you MR. YOSHINORI

Calamitous economic theory

In economy, there are some aspects beyond equilibrium that are not yet considered, this is one of aspects of complexity, the presence of subject.

Economy is science of economic transactions or must be this. Classic economic as D. Ricardo specify, refers as value creation and how this is created and traded from his origin and to final consumer.

But in economic theory there are a elephant in the room that is eluded by economic theorists... This is the subject.

In each economic transaction there are two subjects that value economic product. Each actor in transaction is a subject and determines value of merchandise in market.

First thing is accept this fact. xix siecle science in the need to formulate laws of economic behavior assume objectivity of value and surge Classic Economy.

In Walras objectivity of economic facts is not mater of dude.

A big impulse to assume subject presence did must be produced by Einstein  achievements but, in my few economic knowledge, no one has made this.

Now, how to put subject in a complex area as is economy?

My response is each participant in transaction have something and much what to tell in value of merchandise.

This step is difficult to give. People has separated supply and demand, and is comfortable with this schizoid image of economic world.

But world is only one.

In a transaction are present two, a buyer and a seller. each one as a criterion of merchandise value and implicitly the value of money. Seller know how he did get that, and have reference to valuate this merchandise.

Classic objectivity can be based in assuming perfect know of  both actors in economic transaction. One of few that stablish this is Milton Friedman who in his price theory assume locality to define demand and supply curves. Now he has no problem to extend his conclusions to all world.

Value (or price) is sustained thru seller criterion to appreciate merchandise, I suppose that seller have knowledge if merchandise is scarce, or if quickly or after long time can to appear other  merchandise equal or like this. But also seller or buyer can to ignore market behavior. The point here is both valuation don't necessarily are  coincident.

Several cases are present in valuations of merchandise

1. Both coincide

2. We have 2 measures of merchandise value

In both cases money value is implicitly assumed by each participant.

If money is not present, then there are four cases where each participant make an estimate of value of each merchandise, this is one participant valuate both merchandises and so the other.

Perfect knowledge of market is assumed by various economic theorists. In this case i think reasonable to recognize  to levels of knowledge of merchandise value.

level 1 how much value specify the other participant and how much I value merchandise.

Level 2 how much the other participant value merchandise and how much asks.

Locality specified by Friedman is valid also for Walras and Ricardo, and in Ricardo case this may be extraneous if considering Ricardo's relation with East Indie company.

In a locality, majority of economic theory assumptions are valid, however it is possible to construct local cases where are not valid. People with handicap, locally yet, can to make no "rationale" transactions .

International commerce, in other case, produces valuation of overseas merchandise  different of local merchandise value.

Non local transactions have a different merchandise valuation. This difference can be recognized as a "plusvalue". In international trade plusvalue is gained and associated to actor who participate in merchandise transport.

Say law on local commerce specify for each merchandise there are other to interchange. But when there are a plusvalue by distant o international commerce, a gap is produced in region with no access to international commerce facilities. This is the origin of international crises.  First occur in local country or region  with no access to overseas commerce. basically country o region that buy or sells giving plusvalue lose circulation mean and left in difficulties to realize internal commerce.

Walras model and Ricardo international commerce model obviate this and world is suffering crises and wars and all class of calamities.

 Dear Francisco Viera, 

I am not sure if I have understand well what you want to say. However, there are some points I have to add.

The presence of subject does not seem the major obstacle. It is a part of complexity problem, but not the main problem. As you put it , transaction are made by an agreement by two parties. However, the exchange ratio is not totally subjective. the classical economics such as Ricardo's cost of production theory of value made clear that objective condition such as the cost of production (including normal profit) form the basis of all transactions.

Jevons objected to this idea and contended that the value depends more on subjective evaluation than objective conditions. This is the starting point of neoclassical economics.  Friedman's idea that demand and supply curves must be defined on a local basis is only a minor modification. 

Commodities increases their values when they are put and arranged in a supermarket or in a store. The added value here comprises the transportation cost, handling cost and sales costs. They produce a new service by providing a good assortment, which has a great meaning for consumers. It shows by comparison what they want to buy (to make consumers discover the product they potentially want to buy) and decrease their efforts to go around for shopping (one stop shopping). If consumers highly estimate these efforts, sales volume and profit increase. Thus the retail prices are also decided by the total cost of production including service cost  for merchandising. Subjective factors have a minor  weight. 

It is necessary to make clear distinction between classical economics (or classical political economy) and neoclassical economics. In the time of Smith or Ricardo, people was not predominated by equilibrium concept. We may even say that those classical economists  possessed a vague idea of dissipative structure. for example, Quesnay emphasized the circular process and return to the original position. After a cycle, the economy produces foods and materials and nurture the people. This is not a simple agglomeration of transactions.

Yoshinori

Dear Yoshinori

Thanks for your rapid response and to think in the question exposed.

Your objection comes from  xviii century sense of objectivity. Objectivity don't excludes subject, old science does. Objectivity must to include subject presence to account to reality. Physic when calculate mass, physical dimensions an time lapses must to know speed relation between subject to object to righlty understand that. Ricardo when specify production cost don't refer to subject injerence in labor value. RIcardo don't see bargain in labor market, or he was thinking in India where military colonial army impose wages?.

Jevons and all other subjectivist, have a more important bias than Ricardo. They obviate transaction process in economy, for a sale one accord between two actors is necessary. This is basics for economic interchange. Ricardo excludes subject from low level economics, Jevons excludes only possibility to specify economy as a objective science.

First thing is to think in local economic vs extended or overseas economic relations.

Fernand Braudel make a distinction in local commerce and distant commerce. and explain how different actors specialize in each kind of commerce (Braudel)

He said that in local commerce there are many actors and competence is normal, but extended commerce there are few actors and big capital accumulations. In local commerce, competence is rule and capital is distributed in many actors.

Capital accumulation and power relations grow on international commerce. this is the history of modern world. Italian cities with their navy power accumulate capital and develop financial institutions and loan to european kings.

I am speaking on antiquity power  and commerce wars that fill the whole story. One of the virtues of the modern world is that expands the locality in the sense of knowing the cost of the goods in distant places. I can to buy by Amazon at local price in USA.

Now, there are other complexity factors in economic, but I say that locality and knowledge by the subject of merchandise value actuate on economic social behavior at a primary level.

In Ricardo definition of value locality is not present nor measure of value by the subject.

Production cost also is not objective when you change to other subject or moves to other locality. At elemental level, two persons dont have equal capacities or abilities and in two locations is different man hour or journal cost.

Out of local scope, value of materials needed to produce have different costs. To two actors, in different places, production costs in general are different. There are different work behavior and productivity.

Locally there are also different productivity, and may be, material costs but local social pressure may be by state or local authorities action, locally conditions tends to approach.

The subject, act, from principle in overseas or distant commerce, to develop power economic and involves politics power also.  This is a source of behavior that deviate economic laws to monopolistic relations type.

In second place, communications development augment locality. Political economic results of, unknowing merchandise value will be left in more specific areas

 To the measure that extends the local effects, extends democracy and reduce economic crises.

(Braudel) Braudel Fernand, “LA DINÁMICA DEL CAPITALISMO”, 1986, FONDO DE CULTURA ECONÓMICA MÉXICO, Exists version in english

Dear Francesco,

you are omitting to consider transportation costs. All your arguments on locality can be treated by taking in consideration transporation costs. Please see

Section 4. A framework for the introduction of transport costs

of my paper 

Final Resolution of the Ricardian Problem on International Values.

Yoshinori

Conference Paper Final Resolution of the Ricardian Problem on International Values

I have posted a comment which is realted to dissipative structure on Barry R. Weingast's paper:

Exposing the Neoclassical Fallacy: McCloskey on Ideas and the Great Enrichment.

https://www.researchgate.net/publication/315647475_Exposing_the_Neoclassical_Fallacy_McCloskey_on_Ideas_and_the_Great_Enrichment

N.B. The title of this paper appears in two places. The above title gives you full paper published in the Scandinavian Economic History Review.

Article Exposing the Neoclassical Fallacy: McCloskey on Ideas and th...