by From Mouvement des étudiants pour la réforme de l’enseignement en économie (MEPREE) France and RWER #75 The basic background ideology: free individuals, free markets and “invisible hand” The e-Book overtly proclaims that it adheres to “methodological individualism”. That is, individuals are society’s point of departure. They are “free to choose”, between consumption and leisure for “Angela the farmer” and “Mary the employee”, e-Book’s typical consumer, and between leisure and school-grades for “student Alexei”, e-Book’s typical producer. They are selfish, at least as a first approximation, but happily there is the “invisible hand”. The e-Book, as almost all textbooks do, quotes Adam Smith: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest,” he wrote, adding that each would be “led by an invisible hand to promote an end which was no part of his intention” (Unit 1[1] page 7, our italics). and, like other textbooks, forgets to tell the readers that several hundred pages separate the first phrase from the second – the first is in chapter 2 book I, the second in chapter 2 book IV.[2] Only ideology – or ignorance? – can explain the fact that Smith’s two phrases are artificially linked by the expression “adding that”.
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from Mouvement des étudiants pour la réforme de l’enseignement en économie (MEPREE) France and RWER #75
The basic background ideology: free individuals, free markets and “invisible hand”
The e-Book overtly proclaims that it adheres to “methodological individualism”. That is, individuals are society’s point of departure. They are “free to choose”, between consumption and leisure for “Angela the farmer” and “Mary the employee”, e-Book’s typical consumer, and between leisure and school-grades for “student Alexei”, e-Book’s typical producer.
They are selfish, at least as a first approximation, but happily there is the “invisible hand”. The e-Book, as almost all textbooks do, quotes Adam Smith:
“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest,” he wrote, adding that each would be “led by an invisible hand to promote an end which was no part of his intention” (Unit 1[1] page 7, our italics).
and, like other textbooks, forgets to tell the readers that several hundred pages separate the first phrase from the second – the first is in chapter 2 book I, the second in chapter 2 book IV.[2] Only ideology – or ignorance? – can explain the fact that Smith’s two phrases are artificially linked by the expression “adding that”.
Like other textbooks, the e-Book expresses its admiration for the way prices, “governed by supply and demand”, coordinate the choices of “millions of people”:
“The amazing thing about prices determined by markets is that individuals do not send the messages; they result from the anonymous interaction of sometimes millions of people, governed by supply and demand. And when conditions change — a cheaper way of producing bread, for example — nobody has to change the message (“put bread instead of potatoes on the table tonight”). A price change results from a change in firms’ costs. The reduced price of bread says it all” (Unit 8.0, our italics).
The “invisible hand” again…
Last but not least, e-Book’s authors know that students have protested on a continuing basis against the models’ “unrealism” – especially in microeconomics. Yet, they invoke – in Unit 3.8, (“This is a good model”, p. 34) – Friedman’s Essay on positive economics and its “as if” argument to justify the model: only its predictions are important – their assumptions can be false but we act “as if” they were right (or true). No sensible person can accept such a fanciful “epistemology”. Except (some) economists that cling desperately, for ideological reasons, to their models, especially the “competitive markets” one.
And there is no “epistemology” that can justify an absurdity.
[1] By the word “unit”, CORE e-Book authors mean “chapter”.
[2] The first is about what I expect from my butcher, the second is about “an individual” who “endeavors to employ his capital … in such a manner that it produce may be of the greatest value”.