UGADawg wrote:

No, rational choice theory doesn't assume people have perfect information. So much to the contrary, informational limitations are easily incorporated into the model as information costs, which just alters the choice constraint. Mutatis mutandis for preference rankings.

Don't Austrian/market process critiques often begin with the critique of mainstream formalism (e.g. perfect information, transitivity)?

UGADawg wrote:

It's important to keep in mind the meaning of "rational" in "rational choice theory" is very thin, being nothing more than an instrumental rationality (perhaps a helpful analogy would be to compare this with Aquinas's very thin notion of goodness when he says individuals always pursue what they take to be good in some way or another). This kind of choice theory is the basis of all economics, not just modern neoclassical economics that is (perhaps) overly concerned with mathematical tractability. In fact you can't do any economics at all without rational choice theory; it is, quite literally, impossible (laughable attempts from left-heterodox economists to model economic phenomena along fundamentally different lines notwithstanding).

True. However, there is a world of difference between the minimalist definition of rationality one finds in the Austrians and the technocratic definitions that is often the target of behavioral/experimental economists.

UGADawg wrote:

​Nor is this some curious invention modern economists are reading back into previous generations of economists. Go back to Adam Smith. What does his analysis and explanation of the economic coordination he was concerned with (the "invisible hand") look like? Well, he starts with the rational choice postulate and traces out the implications of that assumption in a market institutional context (see e.g. "...it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner..."). Much of TWoN is very similar, i.e. it's just applying rational choice theory to different institutional contexts to explain social cooperation and coordination, but it looks different because he was going off his intuitions rather than having some completely formalized model.

Adam Smith also relies heavily on argument from first principles. Nowadays neoclassical economists are running around, claiming that experimentation and mathematical regressions are what make them scientists.

I think Vernon Smith described Adam Smith as a behavioral economist who recognized the importance of institutions in mitigating/controlling uncertainty. It would have been nice if that had been the focus of my economics classes instead of mathematical formulas. (My economics of law class was a nice out-lier, in that regard.)

Karl3125 wrote:

I think Vernon Smith described Adam Smith as a behavioral economist who recognized the importance of institutions in mitigating/controlling uncertainty. It would have been nice if that had been the focus of my economics classes instead of mathematical formulas. (My economics of law class was a nice out-lier, in that regard.)

I think this is a good point. I think economics definitely took a wrong turning when it went down the marginalist/neoclassical route instead of the institutionalist/historicist one.

Still, I don't agree with those critics of mainstream economics who reject mathematical economics entirely. The truth is that mainstream economists, despite their pride in being mathematically minded, are using long out of date static analysis and linear functions, whereas they should be using dynamic analysis and nonlinear differential equations. It has long been known, in all sorts of scientific disciplines, that such techniques are far better for better for modelling any type of complex system. The problem is that such analysis been shown a market is extremely unlikely to be in equilibrium. Indeed, there can be multiple equilibria, and a slight deviation from any can cause the market to move further from the equilibrium, sometimes greatly (one of the problems with the Austrians is that, although they reject equilibrium analysis, they imply the market will tend to stay close to equilibrium, but this is not necessarily the case).

I was making a more general point. The New Institutionalists, alas, wedded institutional analysis to marginalism.

On Keen, one possible mistake like that hardly seems to warrant such a strong dismissal. Much of Keen's book is just a rendition and summation of known issues in neoclassical economics, discovered either by neoclassical economists themselves (like the issues with aggregation of demand), or by critiques like Sraffa and Keynes. It would be sophistic to reject this analysis because of a maths mistake. Of course, Keen himself denies the mistake in question:

http://disq.us/url?url=http%3A%2F%2Fwww.paecon.net%2FPAEReview%2Fissue53%2FKeenStandish53.pdf%3ANeOaK1sQgTK243OmpmwA6wgakmM&cuid=5125708

http://arxiv.org/pdf/nlin/0411006

http://underhandedeconomist.blogspot.com.au/2013/08/keen-on-collusion.html?m=1

But the example you gave is arguable at best. And, leaving aside any ideological component, he's a strong critic of mainstream economics, so of course he is not popular amongst its practitioners. He treats them almost as you treat him. The alleged closed minds of neoclassical economists are why heterodox economics exists. In general, one must accept the assumptions of neoclassical microeconomics to publish in mainstream journals. No Post-Keynesian or other heterodox economist could publish anything that went against the main pillars of economic orthodoxy. It remains the case much of the book in question is a rendition of the findings of either neoclassical economists themselves or other critics, like Sraffa. Personally, I'm less interested in Keen's own embellishments than these fundamental criticisms or issues. I would certainly not recommend taking Keen, or any other economist as gospel, either in terms of their analysis or policy prescriptions. One should read widely, from many competing perspectives. But Keen is well worth a read, and for a compendium of the important shortcomings of neoclassical economics, his work is almost unique.

It would be absurd to suggest that there were not important and successful, in some sense at least, economists amongst the Post-Keynesians - Keynes himself, Joan Robinson, Sraffa (if he is counted as a Post-Keynesians), Minsky, Kalecki, Kaldor, etc. Now, there might not be quite the talent amongst today's Post-Keynesians, but I don't think the tradition suddenly fell into the hands of imbeciles and quacks.

​The question is which journals are we talking about and what kind of area or contribution your article is trying to make. The issue is not whether one could publish a paper on some model considered a special condition or some relatively minor part of a theory, but whether one could, for example, dispense the main theories of neoclassical economics (general equilibrium or marginal productivity theory, for example) and write an article that aimed that advanced a replacement. This is what Herbert Gintis had to say on the matter:

Moreover, although the journals are not ideologically rigid, they generally agree on what constitutes publishable economic research, and this covers an extremely narrow range compared to some other disciplines, including sociology and political science. Finally, this narrowness is not deserved in terms of the explanatory power of the theory they espouse. Many articles in the journals run by heterodox economists are superior to many articles in the most prestigious of the mainstream journals.

​The presuppositions an article must accept before being published in many mainstream journals are hardly a secret.

Could you, for example, use a Sraffian model of value and get published in the central microeconomics journals? I doubt it, though arguably the Sraffian model is in better shape than the neoclassical one (although Sraffian economics itself suffers from some of the same static, equilibirum analysis issues as neoclassical economics, though it is open to question whether its great founder ever saw his model in Production of Commodities by Means of Commidities as more than a means of critiquing neoclassical economics).​[/color]

I don't see this as particularly different from, for instance, trying to publish in a mainstream sociology, anthropology, or literary theory journal without holding to the general assumptions and framework of the schools of thought that dominate these areas, though there are differences between disciplines of course (as Gintis notes, not always favourable to economics). The gatekeepers will screen out, to a greater or lesser degree, articles that radically conflict with orthodoxy in those areas. Psychology is a good example, where the premier journals and associations have often weened out papers, and sometimes even findings, that failed to abide by what might be called methodological naturalism. Keen's book, indeed, reminds me of works like Irreducible Mind by Kelly, et al (a work that met similar responses from true believers in current orthodoxy).