Re: The Problem with Economics

"norak" <k.norak@xxxxxxxxx> wrote in message
news:1175053424.928290.251570@xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
On Mar 26, 11:05 am, Bob Kolker <nowh...@xxxxxxxxxxx> wrote:
jmh wrote:

But why does economics need to make claims about
interpersonal utility comparisons?

No global assertion of utility can be made otherwise. Economics
collapses into subjectivism. Ergo, it is not science.

Perhaps the ridiculous notion of basing a "science" on something
as vague as "utility" is a mistake. IMHO this all stems from the
rejection of Adam Smith's Labor theory of value. If one recognizes
the inelasticity of natural resources then it becomes obvious that
labor is the only real variable in economics. All goods, including
capital goods are the fruit of labor and labor is the cost to be
paid for all comfort or, if you want, "utility". The reduction of this
cost is the true objective of any "science" of economics. What is
done with this gain is some other field of "science". Whether the
aggregate gain in efficiency/productivity provided from better
division and specialization of land and labor or increases in capital
development are employed to smoke dope, chase women,
study the bible, or provide leadership along the path of
goodness for the society is not part of "economics". And these
after the fact decisions are what masquerade as "utility".

We know that people engage in trades and that insitutions
such as marketsand law facilitate those trades. We can focus
on the objective and measurable features of both the institutions
and the trades and ignore any attempts at exterally understanding
the underlying subjective values/utilities.

Everyone can agree on prices and quantities. Utility is ka ka. Prices,
quantities are objective data. Utility is subjective.

Bob Kolker

Utility is designed to explain individual preferences. It is based on
assumptions of transitive preferences, completeness, etc. Most
economists use wealth as a proxy to utility if they want to sum
utilities. What else can you do? Just because you can't perform
surgery in a perfectly sterile environment it doesn't mean doctors
should operate in the sewers.

So just understand that wealth is the capacity to forgo or to command
labor. The time you can spend enjoying the sunrise or gazing at that
sparkling diamond is inversely proportional to the time you must
spend working. What part of this escapes the otherwise intelligent
human society is controlled by the "handmaidens of aristocracy"
that are the current members of the "economics" profession.

--
"I know no safe depository of the ultimate powers
of society but the people themselves; and
if we think them not enlightened enough to
exercise their control with a wholesome
discretion, the remedy is not to take it from
them, but to inform their discretion by
education." - Thomas Jefferson
http://GreaterVoice.org


.

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