Thoughts
on Neo-classical Economics and Micro Economics in England and somewhere
By Benjamin Bowman
The first reading "Early Neo-classical Economics,” first talked about A. A. Cournot. As the author reviewed his life, it made it seam like Cournot was a great economist that struggled to achieve success in life, but was recognized greatly in death. The work of Cournot contributed greatly to current economic thought.
Cournot was a strong proponent of mathematical analysis of economics. He used his mathematical background to critique and expound upon previous writers such as Smith, Say and Ricardo. He said that economic analysis had to be grounded in empirical observations and in facts. He refused to accept speculation when it came to his demand function, but in a method similar to current day, he successfully used math to explain the relation between demand, supply and other demand factors. He was able to recognize and explain how "facts, theory and model building were intertwined."
Although Cournot made many contributions to microeconomic theory including a simple competitive model, an advanced model of composite and derived demand, and discussions of various economic equilibriums, his contributions to method and monopoly-duopoly theory dominated the attention of theorists and critics alike. I find it interesting that his work answered some important questions, but by answering one question it created more. It seems like the author's favorite economist to this point was Cournot. The author holds him in high esteem to the point of saying Cournot reached a level of achievement few have reached. He did so by seeing economics as a toolbox full of tools that could be used to answer numerous economic questions. I can very easily see economics as such a science. I wonder if Cournot thought himself an economist, or if he was more of a philosopher? The author said he "practiced economics as a vocation, not a profession, so I venture to say he would not think of himself as an economist.
I find the story of Dupuit interesting because he was formally an engineer but enjoyed political economy as a hobby. With the exception of “Commercial Freedom,” the majority of his economic contributions entail journal writings. I wonder how his journal found its way fonts the economic world?
I love that Dupuit recognized that unorganized statistics are meaningless. I wish more people recognized this today. Constantly polls are skewed to achieve the biased results that the pollster seeks. Then the skewed results are used as propaganda to influence people or politicians. The severity of statistical abuse has led some of statistically literate to cynicism. It is so difficult to sift through the mounds of propaganda, that even legitimate and organized statistics are lost in the deluge.
Dupuit’s contributions to the idea of marginal utility are quite amazing, especially considering the fact that he was an engineer, and the majority of his explanations were based upon empirical quandaries. It is also impressive that the majority of his works were concerning municipal issues, but applied well to almost all goods. He linked the demand curve to utility for the first time and consequently created a new approach to economic inquiry, that is welfare economics.
Dupuit's analysis of monopoly and discrimination, using the railroad method, reminds me of the airways method of discrimination between first class and second class passengers. It also reminds me of localized monopolies for utility companies. In his example, the gov't is able to offer consumers more utility than if it was run by privately. I think this is very possible, but government, tyrants and politicians, have proven time and time again, that they will often act in their own interests despite the interest of the people. What is to make the government not charge a prohibitory price that leads to less utility, or simply not provide sufficient service? Not only that, but it seams gov't has a habit of decreasing economies of scale due to bureaucratic difficulties.
I agree with J. S. Mill about certain necessity for government to run certain ventures that would not be profitable for the private sector, but necessary for the economy and the people. However, government has a tendency to screw things up when it reaches too far. With that being said, I do believe that Dupuit made significant progress toward a fruitful level of government planning. His work laid the foundation for the analysis of when and if such government intervention would be appropriate and beneficial for society.
Jevons was a solitary man. I loved his self-assessment as to why he has a disposition toward solitude. He stated then what we know now as group thought. That those who are raised in the conversation of the many will tend to think as the many, and will scantly raise their thoughts above their level. Of coarse there are always exceptions to the rule, but he was very right. It is difficult for scientific revolution unless we cast out the status quo. The easiest way to cast out the status quo is to expel oneself from it. One of my favorite things is to go for a hike alone with my thoughts.
However, at the same time there is an advantage of synergy when working with increasingly complex sciences. One cannot be an expert in every aspect of science, but by allying oneself with intellects that complement each other, the group is empowered beyond any individually achievable level. For example Jevons could have benefited greatly from the insights and second opinion offered by Dupuit, the main discoverer of utility. Jevon's expounded on Dupuits idea of utility and was the first to articulate marginal utility. It sounded like Jevons was inconsistent in his piecemeal work, but that his theory of marginal utility is one of the things he described in detail. He also used his theory of utility to describe and develop his theory of exchange and theory of labor supply.
The author makes the argument that if Jevons had lived to complete his work, he would have made a larger impact on economic science, but experiencing an untimely death left his work in pieces and unfinished. Even in this unfinished state, his contributions to economics are profound. Keynes was a big fan. Despite the disposition of isolation, it seems to me that Jevons was well aware of his predecessors and other economics of his time. In fact he made an effort to make sure everyone in the economic world knew of the available writing of economics. From this reading, I do not doubt that given more time in life, his impact on economics only would have been magnified.
I find it interesting that so few pages were dedicated to John Bates Clark, even though the author recognized him as one of the "most honored and revered of early American economist." In the reading it seems like his contributions were limited to his Marginal Productivity-Theory of Distribution and his Marginal Utility-Theory of value, even though credit for the former was shared with other economists. It leaves me feeling like the author cut his section short. I find it interesting that Clark was able to first educate himself, and instead of looking forward to new ideas like most of his colleagues, he looked back and was inspired by the economists that came before him. His Marginal Productivity-Theory of Distribution was inspired by Riccardo's rent theory. I'm sure that in ten years I could reread these pages and learn something completely different. Life and experience have a way of doing that to us.
By Benjamin Bowman
The first reading "Early Neo-classical Economics,” first talked about A. A. Cournot. As the author reviewed his life, it made it seam like Cournot was a great economist that struggled to achieve success in life, but was recognized greatly in death. The work of Cournot contributed greatly to current economic thought.
Cournot was a strong proponent of mathematical analysis of economics. He used his mathematical background to critique and expound upon previous writers such as Smith, Say and Ricardo. He said that economic analysis had to be grounded in empirical observations and in facts. He refused to accept speculation when it came to his demand function, but in a method similar to current day, he successfully used math to explain the relation between demand, supply and other demand factors. He was able to recognize and explain how "facts, theory and model building were intertwined."
Although Cournot made many contributions to microeconomic theory including a simple competitive model, an advanced model of composite and derived demand, and discussions of various economic equilibriums, his contributions to method and monopoly-duopoly theory dominated the attention of theorists and critics alike. I find it interesting that his work answered some important questions, but by answering one question it created more. It seems like the author's favorite economist to this point was Cournot. The author holds him in high esteem to the point of saying Cournot reached a level of achievement few have reached. He did so by seeing economics as a toolbox full of tools that could be used to answer numerous economic questions. I can very easily see economics as such a science. I wonder if Cournot thought himself an economist, or if he was more of a philosopher? The author said he "practiced economics as a vocation, not a profession, so I venture to say he would not think of himself as an economist.
I find the story of Dupuit interesting because he was formally an engineer but enjoyed political economy as a hobby. With the exception of “Commercial Freedom,” the majority of his economic contributions entail journal writings. I wonder how his journal found its way fonts the economic world?
I love that Dupuit recognized that unorganized statistics are meaningless. I wish more people recognized this today. Constantly polls are skewed to achieve the biased results that the pollster seeks. Then the skewed results are used as propaganda to influence people or politicians. The severity of statistical abuse has led some of statistically literate to cynicism. It is so difficult to sift through the mounds of propaganda, that even legitimate and organized statistics are lost in the deluge.
Dupuit’s contributions to the idea of marginal utility are quite amazing, especially considering the fact that he was an engineer, and the majority of his explanations were based upon empirical quandaries. It is also impressive that the majority of his works were concerning municipal issues, but applied well to almost all goods. He linked the demand curve to utility for the first time and consequently created a new approach to economic inquiry, that is welfare economics.
Dupuit's analysis of monopoly and discrimination, using the railroad method, reminds me of the airways method of discrimination between first class and second class passengers. It also reminds me of localized monopolies for utility companies. In his example, the gov't is able to offer consumers more utility than if it was run by privately. I think this is very possible, but government, tyrants and politicians, have proven time and time again, that they will often act in their own interests despite the interest of the people. What is to make the government not charge a prohibitory price that leads to less utility, or simply not provide sufficient service? Not only that, but it seams gov't has a habit of decreasing economies of scale due to bureaucratic difficulties.
I agree with J. S. Mill about certain necessity for government to run certain ventures that would not be profitable for the private sector, but necessary for the economy and the people. However, government has a tendency to screw things up when it reaches too far. With that being said, I do believe that Dupuit made significant progress toward a fruitful level of government planning. His work laid the foundation for the analysis of when and if such government intervention would be appropriate and beneficial for society.
Jevons was a solitary man. I loved his self-assessment as to why he has a disposition toward solitude. He stated then what we know now as group thought. That those who are raised in the conversation of the many will tend to think as the many, and will scantly raise their thoughts above their level. Of coarse there are always exceptions to the rule, but he was very right. It is difficult for scientific revolution unless we cast out the status quo. The easiest way to cast out the status quo is to expel oneself from it. One of my favorite things is to go for a hike alone with my thoughts.
However, at the same time there is an advantage of synergy when working with increasingly complex sciences. One cannot be an expert in every aspect of science, but by allying oneself with intellects that complement each other, the group is empowered beyond any individually achievable level. For example Jevons could have benefited greatly from the insights and second opinion offered by Dupuit, the main discoverer of utility. Jevon's expounded on Dupuits idea of utility and was the first to articulate marginal utility. It sounded like Jevons was inconsistent in his piecemeal work, but that his theory of marginal utility is one of the things he described in detail. He also used his theory of utility to describe and develop his theory of exchange and theory of labor supply.
The author makes the argument that if Jevons had lived to complete his work, he would have made a larger impact on economic science, but experiencing an untimely death left his work in pieces and unfinished. Even in this unfinished state, his contributions to economics are profound. Keynes was a big fan. Despite the disposition of isolation, it seems to me that Jevons was well aware of his predecessors and other economics of his time. In fact he made an effort to make sure everyone in the economic world knew of the available writing of economics. From this reading, I do not doubt that given more time in life, his impact on economics only would have been magnified.
I find it interesting that so few pages were dedicated to John Bates Clark, even though the author recognized him as one of the "most honored and revered of early American economist." In the reading it seems like his contributions were limited to his Marginal Productivity-Theory of Distribution and his Marginal Utility-Theory of value, even though credit for the former was shared with other economists. It leaves me feeling like the author cut his section short. I find it interesting that Clark was able to first educate himself, and instead of looking forward to new ideas like most of his colleagues, he looked back and was inspired by the economists that came before him. His Marginal Productivity-Theory of Distribution was inspired by Riccardo's rent theory. I'm sure that in ten years I could reread these pages and learn something completely different. Life and experience have a way of doing that to us.
My third reading was “Neoclassical Economics as a Theory of
Politics and Institutions” by Anton D Lowenberg. This writing was a synopsis of
neoclassical economic theory in modern economics. The author made an argument for neoclassical
economic theory, and rebuffed some of what he saw as the common critiques from
the theory’s opponents. He also made an
analysis comparing “structuralist” and “functionalist” in our current day.
Although it was interesting, looking back I don’t think this was the best
article for additional reading.
http://object.cato.org/sites/cato.org/files/serials/files/cato-journal/1990/1/cj9n3-6.pdf
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