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The absurd usage of words in economics

Summary:
The absurd usage of words in economics In identifying the economic phenomena, certain primitive concepts and terms have to be used … However, because of the freedom with which the mind can move, it happens frequently that the relation with reality is lost, and that purely hypothetical notions are introduced. In addition, there is often a change in the meaning of words. Consider “competition”: the common sense meaning is one of struggle with others, of fight, of attempting to get ahead, or at least to hold one’s place. It suffices to consult any dictionary of any language to find that it describes rivalry, fight, struggle, etc. Why this word should be used in economic theory in a way that contradicts ordinary language is difficult to see. No reasonable

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The absurd usage of words in economics

The absurd usage of words in economicsIn identifying the economic phenomena, certain primitive concepts and terms have to be used … However, because of the freedom with which the mind can move, it happens frequently that the relation with reality is lost, and that purely hypothetical notions are introduced. In addition, there is often a change in the meaning of words. Consider “competition”: the common sense meaning is one of struggle with others, of fight, of attempting to get ahead, or at least to hold one’s place. It suffices to consult any dictionary of any language to find that it describes rivalry, fight, struggle, etc. Why this word should be used in economic theory in a way that contradicts ordinary language is difficult to see. No reasonable case can be made for this absurd usage which may confuse and must repel any intelligent novice.

In current equilibrium theory, there is nothing of this true kind of competition: there are only individuals, firms or consumers, facing given prices, fixed conditions, each firm or consumer for convenience insignificantly small and having no influence what-so-ever upon the existing conditions of the market (rather mysteriously formed by tâtonnement) and therefore solely concerned with maximizing utility or profit — the latter then being exactly zero. The contrast with reality is striking; the time has come for economic theory to turn around and to “face the music.”

Oskar Morgenstern

Lars Pålsson Syll
Professor at Malmö University. Primary research interest - the philosophy, history and methodology of economics.

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