"[J. E.] King: You published your second thoughts on the capital controversies in 1976. Any third thoughts today?What does Harcourt mean in saying, "G. E. is not descriptive?" He probably has in mind his debating partner:
[G. C.] Harcourt: Yes. I think the methodological nature of Joan Robinson's critique is the dominant one. And price as an index of scarcity cannot be made coherent in the supply-and-demand framework, which I think is the principal Sraffian critique. So that if the demand curve for capital is not well-behaved, and capital may be a Giffen good, you might as well give up neoclassical economics as a conceptual illumination because the results aren't robust enough to go through, though you can pretend that they do. All these one-sector models pretend that there's a well-behaved demand curve for capital.
King: And they are being revived right now.
Harcourt: Yes, it's terrible: at best a sign of ignorance and more probably a sign of intellectual arrogance. Hegemony has been re-established by the mainstream, and it's breathtaking arrogance.
King: I think you're wrong. I think it's mainly ignorance. But you regard the Cambridge controversies as more important than Joan Robinson did, towards the end?
Harcourt: Oh, as a conceptual critique, yes. Joan must have known about the Steedman-Metcalfe critique of international trade theory, but by that time she was into the methodological points, and of course she didn't know about Colin Rogers's destruction of the Wicksellian foundations of modern monetary theory. I think Colin's work is extremely important. If you destroy value and distribution theory conceptually, and show that the central concepts are incoherent - you see, what I say is, the harder-line defence is, General Equilibrium theory is not affected, but G. E. is not descriptive, so it's not a theory about the world, and it means that the cruder versions of neoclassical economics are vulnerable. So either you've got a non-applicable theory or a vulnerable theory. If you then go on and say that the critique may be extended to the foundations of mainstream monetary theory as well, that's a pretty damaging critique. It means that orthodox development theory, orthodox trade theory, orthodox value theory, orthodox distribution theory and orthodox monetary theory are incoherent at their very foundations. Well, providing that us lot remain a minority, no one's going to take much notice of it, and people have become more and more ruthless in suppressing dissent. But the fact remains, from an intellectual point of view, that it's an absolutely vulnerable position for the mainstream to be in. Sadly, the students in the advanced theory classes quickly fade away from my lectures on all this, because I lecture at a conceptual level instead of just squiggles - though I do some squiggles - and because of the counter-attractions of game theory, or modern decision-making under uncertainty, where there are precise answers If you can get on top of the highly difficult technical stuff you've got ready-made answers, and it's all self-contained. I don't think that's proper honours work. I think a good honours question is one where you have to do a conceptual discussion, a critical discussion, and some analysis. That's what my courses and my questions are like. Well, the students have to pass exams and get good marks, and so on, and since many of the lecturers here would rubbish the whole thing anyway, you can hardly blame the students for not coming. Though I find it a very sad thing myself, because where's the intellectual curiosity, where's the intellectual honesty in it all?" -- J. E. King (1995). Converstions with Post Keynesians, St. Martin's Press
"[G.E. is] very useful when for instance one comes to argue with someone who maintains that we need not worry about exhaustible resources because they will always have prices which ensure their proper use. Of course there are many things wrong with this contention but a quick way of disposing of the claim is to note that an Arrow-Debreu equilibrium must be an assumption he is making about the economy and then show why the economy can not be in this state. The argument will here turn on the absence of futures markets and contingency futures markets and on an inadequate treatment of time and uncertainty by the construction. This negative role of Arrow-Debreu equilibrium I consider almost to be sufficient justification for it, since practical men and ill-trained theorists do not understand what they are claiming to be the case when they claim a beneficent and coherent role for the invisible hand. But for descriptive purposes of course this negative role is hardly a recommendation." -- Frank Hahn (1973). On the Nature of Equilibrium in Economics Cambridge: Cambridge University Press: 14-15I don't think I've read that particular Hahn quotation in the original.