Tuesday, December 26, 2006

Robbins Mistaken, Morgenstern Insightful

Mention of "Economics 101" or principles of economics seems to often call forth divergent attitudes, as in the comments to this Crooked Timber post. These attitudes go back at least fifty years.
"The efforts of economists during the last hundred and fifty years have resulted in the establishment of a body of generalisations whose substantial accuracy and importance are open to question only by the ignorant or the perverse." - Lionel Robbins (1945). An Essay on the Nature & Significance of Economic Science, Second Edition, Revised, Macmillan and Co.
Contrast Oskar Morgenstern (1941, "Professor Hicks on Value and Capital", Journal of Political Economy, V. 49, N. 3 (June): 361-393). Morgenstern notes that Hicks claims to have a new theory. This theory became the foundation for introductory or intermediate economics. Yet, as Morgenstern notes, Hicks ends up with the same conclusions. Morgenstern doubts that Hicks' work can stand up to a rigorous critique.

(Aside: I appreciate comments. I realize I am as slow in forming my thoughts into intelligible responses, including the acknowledgement of valid points, as DSquared is in posting promised book reviews.)

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