Real-World Economics Review

from Lars Syll To achieve explanatory success, a theory should, minimally, satisfy two criteria: it should have determinate implications for behavior, and the implied behavior should be what we actually observe. These are necessary conditions, not sufficient ones. Rational-choice theory often fails on both counts. The theory may be indeterminate, and people may be irrational. In what was perhaps the first sustained criticism of the theory, Keynes emphasized indeterminacy, notably because...

from Ken Zimmerman Human work/employment/work relations are complex. In terms of muscular or nervous effort there is no distinction between agreeable and irksome activities, or between those undertaken for pleasure and those undertaken for pay. In many instances severe physical labor, combined with hardship and exposure are undertaken for pleasure by tourists, who even hire and pay guides, for example mountain climbing. Similarly, athletic sports, though often arduous are both professions...

from Lars Syll So what do I mean by methodological arrogance? I mean an attitude that invokes micro-foundations as a methodological principle — philosophical reductionism in Popper’s terminology — while dismissing non-microfounded macromodels as unscientific. To be sure, the progress of science may enable us to reformulate (and perhaps improve) explanations of certain higher-level phenomena by expressing those relationships in terms of lower-level concepts. That is what Popper calls...

. . .  everything indicates more and more clearly that the resolution of the climate challenge can not be achieved without a powerful movement of compression of social inequalities, at all levels. With the current scale of inequalities, the march towards energetic sobriety will remain wishful thinking. Firstly because carbon emissions are highly concentrated among the richest. Globally, the richest 10% are responsible for almost half of the emissions, and the richest 1% alone emit more...

Economic Thought:History, Philosophy and Methodology Vol. 8, No. 1 download issue in full Judging Heterodox Economics: A Response to Hodgson’s CriticismsLynne Chester The Meaning and Future of Heterodox Economics: A Response to Lynne ChesterGeoffrey M. Hodgson Was Smith A Moral Subjectivist?Kevin Quinn Addressing the Malaise in Neoclassical Economics: A Call for Partial ModelsRon Wallace Commentary on ‘Addressing the Malaise in Neoclassical Economics: A Call for Partial Models’David...

from Lars Syll How would you react if a renowned physicist, say, ​Richard Feynman, was telling you that sometimes force is proportional to acceleration and at other times it is proportional to acceleration squared? I guess you would be unimpressed. But actually, what most mainstream economists do amounts to the same strange thing when it comes to theory development and model modification. In mainstream economic theory,​ preferences are standardly expressed in the form of a utility...

from Ken Zimmerman Ecosocialists aren’t even a political party, much less a political force in most of the western world. And certainly not in the top polluting nations in the world – China, Russia, India, and the USA. These four nations along with the EU hold the future of humans safely living on planet earth, of perhaps not living at all on that planet. There are two ways to approach changing this situation – from people’s direct-action groups to local and then national governments....

from Lars Syll [embedded content] Now, I don’t care to discuss the alleged complaints American Indians have against this country. I believe, with good reason, the most unsympathetic Hollywood portrayal of Indians and what they did to the white man. They had no right to a country merely because they were born here and then acted like savages. The white man did not conquer this country … Since the Indians did not have the concept of property or property rights—they didn’t have a settled...

from Dean Baker Donald Trump has repeatedly proclaimed his love for tariffs, even dubbing himself “Tariff Man.” While Trump clearly does not understand how tariffs work, some of the discussion in the media has been off target as well. It’s worth trying to get the basic story straight. First, it has been widely pointed out that Trump is wrong in thinking that China or other targeted countries are paying tariffs to the U.S. Treasury. To make it simple, a tariff is a tax on imports. It can...