Perhaps arguments lasting between groups for decades have some underlying issues that are not immediately apparent by looking at the details. I often attempt to explain technical details of the Cambridge Capital Controversy (CCC). Is there something central, but hardly articulated by the participants and on-lookers, that helps in understanding the positions taken by economists on the CCC? I take the concept and the phrase biotechnological determinism from Stephen Marglin (1984).2.0 Neoclassical Economics As Embodying Biotechnological Determinism
A naive neoclassical economics embodies biotechnological determinism. The biology is to be seen in population demographics and in preferences, including over intertemporal consumption plans and over choices between labor and leisure. The technology is to be seen in production functions and endowments.
From about 1870 up to the 1930, neoclassical economists emphasized incoherent models of long-run equilibrium. To maintain biotechnological determinism after the transition to very short-run models of temporary and intertemporal equilibrium, neoclassical economists must adopt a theory of the short-run. The most congenial short run models to this determinism will assume all markets always clear.3.0 Post Keynesianism Rejects Biotechnological Determinism
Post Keynesians, as I see it, reject biotechnological determinism. Here are some characteristic ideas of Post Keynesianism that, at least, are in tension with such determinism:
- An emphasis on open models.
- A view that appropriate models might vary among countries, sectors, and decades.
- An emphasis on historical time and the acceptance or development of models in which history matters.
- The adoption of models in which corporations are taken as having power to make decisions on the rate of growth and the markup of prices over costs.
- The rejection of the descriptive accuracy of the autonomous utility-maximizing consumers.
- The rejection of the natural rate of unemployment.
- The rejection of the Wicksellian concept of the natural rate of interest, in all runs.
- The acceptance of the idea that fiscal policy can be effective.
4.0 Can Mainstream Economists Reject Biotechnological Determinism?
Of course, markets do not always clear in neoclassical economics. For decades, economists have been talking about, for example, sticky prices, asymmetric information, and multiple equilibrium. Nevertheless, I am often surprised by how willing many economists who have studied such matters seem to be willing to talk as if the economy is always trending towards a unique, given long-run equilibrium. Forces that prevent the economy reaching equilibrium in the short run seem to have no effect on the long run theory. Maybe a tension exists in neoclassical economics between the formal properties of the theories that have been developed and the underlying vision of many economists.
Some argue that mainstream economics is no longer neoclassical and, at least at the research level is open to a wide variety of ideas. Some recent ideas, such as evolutionary game theory, seem compatible with outcomes emerging that cannot be calculated in a closed-form solution as uniquely determined by the givens of the model.
I think older trends, emphasizing perfect competition and instantaneous adjustment to equilibrium, are still widely prevalent among economists and how economists portray their ideas to the public. A skeptic might argue that newer trends will never replace such ideas because of their incompatibility with this underlying vision of biotechnological determinism.5.0 Conclusion
Do different views on biotechnological determinism underlie the visions of various economists? Can contrasting views on this issue ever be settled by empirical evidence, and if so, how?Bibliography
- Stephen A. Marglin (1984). Growth, Distribution, and Prices, Harvard University Press.