What school of economics were you taught in college?

Hmmm? Seems a contradiction, since in truth Pol-Econ is a wealth of nations kinda thing, dealing of course with the body politic, these days. Meanwhile, the theory of the firm seems to be more focused on enterprises and how they interact. But in truth, my attention span during those lectures toggled between day-dreaming and snoring, emphasis on the latter. So it's not what I'd call my strong suit.

Meanwhile as to Marx, not doubt he came up with all manner of theories in overlapping ways, with no shortage of econ-babble pseudo-economics to support his postulate. Wouldn't you agree?

 

Way back when I think most of my basic college economics classes were Chicago with a little Keynes tossed in. Interestingly enough I also took some sociology courses that were based on the Chicago school. In one of those classes I found out that at Chicago the economics and sociology faculty shared a hallway with the math faculty, which is what led to the application of mathematical rigour to these "soft" sciences as the mathematicians suggested and then helped the economists and sociologists develop the basic mathematical tool sets for making sense of the data they had been collecting. Names were named and dates were dated.

Fascinated by this, and needing a subject for a paper, I began a perusal of the library stacks in search of writings by these "founders". I found whole shelves full of large tomes, many of which had been collectively and jointly written by these pioneers of sociology and economics. Apparently they had embarked on a long and extensive survey of history as an exercise in the application of their new tools. What they came up with was a Theory of Social Disorganization, with extensive writing by both the economists and sociologists to back it up.

I wrote a small paper on their Theory of Social Disorganization for a sociology class. My professor, who had a doctorate in sociology had never heard of it at all and admitted he was somewhat baffled but once I dropped a few names he had to give me permission to write the paper and then gave me an A for it. Later, I brought up the Theory of Social Disorganization in a discussion in an advanced economics course, a small class in economic development, and mentioned that it was from writings by the Chicago School. Once again, the professor was baffled, he had never heard of this theory in his twenty years of studying economics.

The big thing with this theory was that it basically said that any projections of future behaviour are essentially impossible because the economic and social impacts of mankind's inexorable technological advance are unpredictable but nevertheless can, and often do, overwhelm any existing social and economic arrangement, usually within a few generations. This was grim news for those seeking to apply the shiny new tools to their particular ends.

From my observations over the past decades it seems that the Theory of Social Disorganization has been the only one that can actually explain what is going on. Technology is accelerating and as it does societies are finding it increasingly more difficult to reorganize themselves as old economic and social arrangements collapse. Because technological changes are happening faster then societies can adapt a sort of technological quicksand has formed with no solid ground for social and economic reorganization is in sight for generations regardless.

 

Wealth of nations? Classical liberalism. Quite different to, say, post-Keynesianism. Changes our understanding of the boundaries of the firm and that they changes our understanding of how government and firm are linked.

Business school economics typically just gives the mundane neoclassical stuff, avoiding the debate and the riches within economic analysis.

I'd note that Marxism is still a vibrant political economic school of thought and that, whilst I'm not a Marxist, I'd be a fool to ignore it and the lessons for our understanding of economic outcome

 

Really? Japan has X and Brasil has Y is a Liberal construct, you're thinking?

Meanwhile, Karl was full of ideas, but one not be a rocket surgeon (intended irony) to parse his postulate: enteprises left to their own devices are less efficient than those which are state-controlled. And while perhaps a novel idea, seems history teaches us that enterprises are okie doke within controlled limits, and that some social welfare to give them a customer base is the friggin' cat's pajamas, what with the exploding wealth of nations (Whoops! Liberal alert!!) going north in many multiples when mixed, modern economies here, in Europe, Asia and elsewhere adopted welfare free market economies. Yeah? We sure as heck dashed past them Ruskies, Cubans, North Koreans and Chinese, until they started following our lead. Any disagreement?

 

Sounds like you don't understand what Marx came out with. As I said, business school economics. You simply haven't come across the different political economic schools of thought that populates economics, ensuring erroneous remark.

 

I'm indeed not a student of Marx, but what he came up with was a revolution in ideas and in fact. The result was rather poor, as we've seen. Market incentives were removed, lowering innovation and enterpreneurship. Plus average incomes lagged well behind our welfare free market with wage minimums, employment regs and collective bargaining, in which labor and management both have a say, including a right of refusal. In short, a market-based solution with protections for both halves of competing interests.

And wealth and productivity exploded in all who followed that path, making it the uncontested winner over extremes of socialism or laissez-faire. That's hardly even up for debate, among economists nor business leaders of note.

 

He can be accused of all sorts: a founding father of the social sciences, the daddy of sociology, the means to assess 'success' in capitalism (comparing with the like of Schumpeter). However, you've simply assumed he did something that he didn't. Sounds like you're confusing him with the likes of Stalinism. You wouldn't do that if you weren't restricted to business school economics.

 

You could call him that, albeit I think Condorcet to have been a bit ahead of Karl on what we think of as modern sociology. But then, we Libbies like our own.

 

I try not to be; and in my 3+ decades at Exec VP level in a multinational or two, the main thing I tried to instill in my managers and directors was: forget what you learned in school and can the biz school babble. Let's just parse reality a bit better than the competition and then get after kicking some butt.

Funny stuff, though. Thanks for you thoughts on it.

 

Whether you're dismissive of your own education isn't really relevant to the thread. Can we dismiss business school economics? Perhaps! There is insufficient depth to it and certainly no real attempt to compare and contrast the multiple schools of thought within the discipline. Your comments on Marxism merely supported that conclusion.

 

I'd not go that far. But indeed, moving from the philisophical / idealic environment that is academia and moving into the real world where practical realities and clear / unambiguous communication and strategies is vital, can be a profound cultural shift.

So I think I'd characterize it as college is where you're taught how to learn; and what comes after, if you open your eyes anew, is where the real learning occurs.

Lastly, I'd agree that I'm a bit dismissive when it comes to Marxism and various other lofty, and often convoluted, concepts. How might it have helped in avoiding the recent Wall Street / Banks snafu? Can it guide us in creating a sound energy policy? Maybe it can assist in spurring retail growth, lower our trade imbalance or raise the median family income in America?

If so, I'm not seeing how. But perhaps you can inform me of what I'm overlooking.

 

Economics is about understanding economic outcome. Not exactly a cultural shift.

But the point is that you're not in a position to evaluate their relevance. I couldn't, for example, try and understand unemployment without reference to Marxist analysis. A political economic approach necessarily leads to consideration of numerous schools of thought in order to understand economic phenomena and empirical result.

Marxist analysis has referred to the instabilities generated by the hegemony of the financial class for some time.

A trade imbalance merely reflects a savings rate problem. Marxism is certainly a key aspect of international political economy and therefore the understanding of the impact of trade. See, for example, historical structuralism

As I said, that's business school economics for you!

 

Let's deal with some of the above, to keep it light ...

1. Outcome is not quite as predictable as we might like it to be. Economics, the study, tends to delve into forces that might affect outcome, and as we can see, it's often dead wrong. For example, Supply Side produced a reverse outcome, from its predicted effect. Yet it cherry-picks many an economic "principle" in its pseudo-economic postulate.

2. What in Marxism explains our unemployment, in your view?

3. I'd characterize it as Marxism endeavored to suggest the dynamics in competing interests, then gets a bit pie-in-the-sky. And as we can see following Red October, it was a smidge off in its predictions, to say the very least. Wouldn't you agree?

 

The vibrancy of political economy, with numerous often conflicting schools of thought, ensures that erroneous conclusion can be made. However, that only highlights the need to avoid business school economics (where neoclassical economics is typically taught as if it is the only form of economic analysis)

The shirking hypothesis version of the efficiency wage hypothesis (where full employment is inconsistent with profit maximisation) is 'borrowed' from Marxist analysis.

Until you sufficiently understand the Marxist approaches, you're not in a position to judge.

 

1. I'd call it the dynamics of the political economy, which psychologists might better understand than many economists, since idealic nonsense like best-interest, wage/labor efficiency tend to ignore the human element, which encompasses are range of baises, such as anchor, selection, etc. etc. Looking for order within chaos is a noble pursuit, however, the order is often in the economic theory, whilst the body politic goes along on its merry and chaotic way. Ergo, what ideally might happen, rarely happens.

For example, wage efficiency. In fact, efficiency is rarely at play. There's perceived need (I need an admin to handle mundate tasks that are taking too much of my "valuable" time, whatever that is) and of course the anchor bias (aka, prevailing wage; thus if exec admins are getting ~X in this market, I'll neither go too much below nor above that. In fact, this the driving force, above all else. Efficiency is at best a pipe dream, which time will tell ... since quite simply, if the admins seems to make things flow better, in my sole opinion, I'll keep the admin. If not, they go and the sales VP and I, or whomever, might share an admin. And the subjectivity factor, is simply off the scale, rendering all seemingly rational economic supply/demand theories, in this case, nearly moot, if not utterly moot, as I'd contend.)

2. The above probably addresses this point as well.

3. Understanding anything is a bit relative. But perhaps you're right; and so I hope you might cut me some slack if I choose to judge things which I care to judge. See how that works: rules are great, but the extent to which any of us might choose to behave by them, is anyone's guess.

 

We're back to business school economics economics aren't we? Economic psychology is standard stuff in economic analysis.

Sorry, but this is a completely inappropriate response! Its the 'human element' that delivers the whole notion of the efficient wage and the failure of the standard supply & demand approach (based on the marginalism)

You don't understand the notion. Efficiency wages provides us with an analysis over how productivity is a function of wages. I'm afraid we're still with the business school economics and how it restricts an understanding of the economic debate.

We can refer to the arguments within Marxism over what Marx meant (with numerous sub-schools generated). We don't have that here. You just don't understand Marxism. I have no problem with that, given that's quite common. I don't think you should make evaluations though on its merits as you're making those evaluations on clearly invalid reasoning

 

Hardly. In fact, if you think that I'm wondering what you've learned since college.

In the real world, supply and demand are a vitrual myth in most of what we buy. In fact, my ilk (marketing exec) are tasked specfically with rendering them moot.

I can tinker with demand, not only through clever ad campaigns that incrrease buyer want, but even with payment schemes that provide instant gratification while postponing less-than-best-interest penalties into the future, which I'm hoping the prospect ignores. In fact, I'm purely in the business of insuring that emotional wants trump rational analysis. And then I can tinker with supply by limiting how much product I put into the channel upon product release. Maybe I want to manufacture a shortage, for a short time, to generate more market want. And this is not an issolated hypothetical. It's happening right now, many times a day, in marketing departments across America and in every country on the planet, darn near.

or the recent jump in gas prices at the pump. How much of that is supply and demand? Sure; a couple refineries had fires. But were other refineries running at full capacity? (no; it ws merely a precieved difference, and thus price increases only seemed justified. And so much price gouging was going on, Senator Cantwell and others threatened a hearing, and bingo. Prices eased, as if by magic. And that's a near perfect "commodity" we'd think of as a classic example of purely supply-demand price driven.)

In short: there's theory, and then what really happens when you get out there and learn the tricks for sidestepping the rules of supply and demand, or any other economic theory, which fits nicely into equasions, but folks who know how to game it will laugh at ... including me, btw.)

 

Empty whine!

Economics informs us of the ignorance of the businessman, but how supply and demand still holds. The point is that even that is inaccurate. Ignorance of the businessman can then inflame inefficiencies (as shown how trade unions have managed to increase productivity)

You'd know this if you weren't just referring to 'business school economics'

 

Astonishing. Truly. But not without some entertainment value.

And forgive me if you've noted it in a prior post, but I gotta know. Where'd you go to college? I have kids, and a coupla grandkids, and need to know which one to scratch off the list.

 

What you don't understand is that everything you've said has been wrong. Even your first statement was a silly mistake (not realising what the question meant). But hey, at least you're jolly in your innocence!

Low powered bintishness. Do you think this sort of stuff is effective? Grow up man!

 

Is that an acredited university?

 

I certainly haven't been taught "business school economics". Proper shame too, otherwise we could of had a conversation where we batted invalid references to heterodox economics back and forth as if we knew what we were talking about

 

How are you at question comprehesion? (Oh wait; that was a question, too. Seems we're at a paradox.)

Best we stop the fun here. Have a nice day.

 

I know how to keep on topic. The problem you have is that you know that you don't understand economics. You're hoping that bluster and, let's be honest now, cretinous remark over Marxism will be sufficient to cover over the cracks. It won't.