Hello from Jack Reardon


It is a great privilege and a pleasure to be one of three editors of this pedagogy blog. Reforming economics education is my life’s work and I am honoured to work with committed individuals like Edward, Maria and Asad. 

As an undergraduate I started as physics major and then switched to economics. I knew something was wrong with economics, but couldn’t put my finger on it at first. Physics, like most disciplines  has its controversies and even ideologues, but I was not ready for the onslaught of fundamentalism mixed in with proselytization. I almost switched back to physics but stayed with economics and pursued a doctorate. I immersed myself in my own research paradigm, and while always concerned about how we educate our students, it remained on  the back burner until I submitted an article to a mainstream economics journal.  It was an enjoyable article to write; I used deductive logic to prove that the  much cherished neoclassical assertion that a labor union is inconsistent in the model of perfect competition is specious. My article began and accepted the rigid assumptions of perfect (and pure) competition; then corrected the specious logic; finally deductively proved that given the stringent assumptions of perfect and pure competition, a labor union can efficiently allocate resources within the model. I guess I was naive but I eagerly submitted this to mainstream journals blithely assuming the editors would jump at the chance to publish a corrected version of a well-known argument that appears in every principles of economics textbook. Not only was I wrong but I was unprepared for the stonewalling by editors and referees and their visceral hostility (Steve Keen reports a very similar experience  in Debunking Economics ). One particular letter from a reviewer hit me very hard: He/she said tersely, “How dare you!”

That moment (when I read the referee’s letter) was an epiphany: all my doubts and misgivings crystallized into a pithy indictment of economics education —  that it really isn’t education at all, but proselytization. A little like Saul’s conversion on the road to Damascus, I radically redirected my research and professional work and have now made a radical  reformation of economics and economics education my life’s work. In 2009 I published my  Handbook for Pluralist Economics Education (Routledge 2009) and founded a new journal in economics education– The International Journal of Pluralism and Economics Education. Expecting a lot of hostility and ideological obstacles, I was pleasantly surprised to experience the opposite. I have also learned that the desire for deep-seated change in economics education spans the globe  and have met a lot of like-minded individuals. But our work is just beginning: we all have ideas to contribute and all of our ideas must be heard.

Here are my philosophical tenets (and goals) in a nutshell:

(1) Economics education is a misnomer: we proselytize rather than educate; and we provide our students with a 19th century map in order to  study 21st century  problems. Our goal must be to educate and not to proselytize.

(2) Pluralism is essential in a reconceptualized economics education: all views within economics must be given credence and students must be exposed. 

(3) Economics is useful is solving our current problems but not in its current form. 

(4) The distinction between the social sciences is artificial and no longer efficacious.  Instead of teaching our students to think like economists we must teach them how to be compassionate and concerned about the world’s problems. 

(5) It is not enough to tinker along the edges, but the curriculum must be radically reformed from top to bottom.

(6) Economics should be renamed Political Economy and we should continue to look for lessons from the past.   

(7) Successfully changing economics education is beyond the task of any one individual; it must be a global and sustained effort.

(8)  A  lot has been written on the failures, liabilities,  and weaknesses of neoclassical economics, but the reason these arguments fall on deaf ears, so to speak, is economics education:  we train our students to disparage and ignore critical arguments, rather than listen, dialogue and learn. So the fault is with economics education and this is where  we must begin. It isn’t easy and cannot happen overnight.

(9) I am interested in specific ways to crack the neoclassical citadel to implement reform and change the curriculum. I will post a few blogs soon and am very interested in hearing and learning your ideas and suggestions. 

I look forward to posting more blogs and conversing with all of you!


Jack Reardon

Editor, International Journal of Pluralism and Economics Education


  1. Octavio Augusto Palacios Sommer said:

    I completly agree with you. Unfortunately economics has changed from a social science to a religion in which the only thing that matters is to hold the purity of faith.

    • This is what makes it so difficult to reform and why we must focus on the this (and the next) generation of students.

  2. Douglas Woodard, St. Catharines, Ontario, Canada said:

    Given the times, a reformed economics education will also have to incorporate ecological economics. It’s possible but it will be a very big job.

    • I agree Doug. Am writing a principles of economics text from a pluralist and sustainable perspective. It isn’t easy.

  3. I’m glad I found your post today on the Real World Economics Review Blog. I am now a follower of your blog. I agree (almost) 100% with what you are saying. My only quibble is that I like to emphasize that economics as it is being taught does serve a purpose; the problem is that it lends itself to all kinds of irrational conclusions; these “wrong” conclusions are the rule, not the exception. I do help students learn the “textbook” way, and when I do I try not to confuse them with the real world limitations of what they are learning. When I teach by the book, my goal is to help them learn what their curriculum expects them to learn.

    At the same time, there really isn’t much in this that is practical for the student, and especially for the much larger segment of the population that will not be students for a variety of reasons (number one perhaps is the perceived inability to understand the technical aspects: terminology, graphs, math, and inter-relationships between so many different concepts).

    So I am with you; I am also teaching from a practical point of view. I see the audience in this as being a different set of individuals than the audience of textbook teaching – with overlap, but a larger population. I am only now beginning to follow this blog, so I don’t know much about the details of your point of view. But I do expect them to be entirely consistent with my point of view, and I hope to learn from yours.

    I am currently working on a manuscript that takes this viewpoint, and changes it to make it practical for the overall population, not just those who can and will be academic types. I am doing so by taking out all of the theories taught in school as being impractical; I also take out anything technical including the language. My target audience is the general population, but I also am trying to make a strong case for academic types to understand that much of what they are learning doesn’t do them any good in the real world, and their ability to understand how the world works is no better than non-academic types. What is needed for understanding is the ability to understand rational thought, the ability to deprogram any indoctrinization that they may have (academic or political), and an honest desire to learn the truth. I am using the “practical” and “how to be an informed voter” angles.

    At the same time, I do acknowledge that I wouldn’t understand all of this without the benefit of academic instruction and study of others, and that they have helped to inform my own conclusions in some way. I strongly recommend not following the same path, that is the point of my book, but I do accept that our education methods have provided some benefits. Just not practical ones unless you count practical as what is hidden inside of a whole lot of information, the vast majority of which must be discarded in order to understand the real world.

    • Hello Jerry

      Thanks for your kind words. Unfortuneately neoclassical economics does serve a purpose and that is to proseyltize rather than educate. A central precept in the reformation of education is that we must be focused on educating our students. Perhaps we need a dialogue on waht is meant by education.

      I appreciate your distinction between what is contained in textbooks and what is practical and or relevant for students. As Edward Fullbrook wrote in the RWER, “The importance of economics introductory level textbooks tends to be under appreciated … With few exceptions, their textbook fundamentally shapes how they think about economics and economic issues for the rest of their lives. As such, these books are a poweful and long-lasting cultural and political force” No 54, Spet 2010)

      One necessary but not sufficient task in the reformation of economics education is for us to publish textbooks that can be used by students. Getting the texts accepted is not easy but it can be done. Can we provide a listing of all heterodox/pluralist text within economics and begin a workable committment to get more written?


      • You bring up an interesting quote from Edward Fullbrook, because I see the main problem lies in the inability for these introductory textbooks, perhaps even more so with professors, to properly prepare students to understand the most fundamental principles because what is learned isn’t the basics; what is learned is a false interpretation of the basics. The main examples that I like to use: many of the arguments put forth by “free market” advocates use the theoretical model of perfect competition as a basis for their conclusions. Too bad there are no such “markets” in the real world. The larger the “economy” that you are dealing with, the further you get from “free” markets; which means global “free markets” are anything but. I put the word “markets” in quotation marks because, contrary to what we are taught, markets are pretty much only concepts and not reality. I don’t see any benefit to spending time teaching students about different market structures; for any industry, for any individual business, these made-up distinctions are very blurred. Is WalMart a monopoly, an oligopoly, or in monopolistic competition? According to what we are taught, it is all three at the same time depending on which level you are looking. Which to me is totally irrelevant. We should be teaching the reality of how people are affected by this business. To use the classical terminology, we shouldn’t be trying to deny the existence of market failure, we should be teaching it as the normal.

        People come away from Econ 101 without fully appreciating the limitations of the models due to the unrealistic assumptions used in creating the models. Perhaps these people took one course, it seemed to make sense to them the way they understood it, and then they go around drawing incorrect conclusions. Unfortunately, this error isn’t limited to these low-level students. I see the same fallacies from professors and even Nobel winning economists. The only solution that I see is to take the models out of the teaching altogether. No assumptions, no “failure”, just reality. The point that I made originally was that I believe this can be done in a way that the general population can understand, not just people with the means to study. That is what I am trying to do with my manuscript.

  4. I have written this in the last few days, and figure it is sound and fair!

    Economics is an edifice that importantly serves to obscure the omission of inflation-adjustment of asset price histories — because they look like this
    which is bad for business!

  5. Fred Zaman said:

    Can economic based theories perhaps leading to a deeper “understanding of current real world economic issues” be the subject of discussion here? if so, the RWER (issue 61) paper “Nash dynamics of the wealthy, powerful, and privileged…” could be discussed here, as an example of promting theoretical diversity in economics education.

    • Fred Zaman said:

      Rethinking the ergodicity of economics:
      The qualitative theory and paradigm of the RWER paper “Nash dynamics of the wealthy, powerful, and privileged…” is a counter example of economic theorizing on the “ergodic axiom” (EA), conventionally understood by economists as the scientific foundation of “neoclassical economics” (NE); which axiom apparently has been accepted by many as limited in principle to NE theory, even by those developing – as exemplified by Paul Davidson in “The Keynes Solution” – what can be called “counter-neoclassical theories” (CNE). Keynesian economic theorists may generally be a prime example of the economist’s blind acceptance of the false doctrine in classical economics that apparently irrevocably welds EA to NE; because of which, although wholly unwarranted, theorists therefore feel that CNE development efforts must reject and deny the validity of EA.

      “The Keynes Solution” is an outstanding example of this wholly unwarranted rejection of EA by CNE theorists. Davidson’s proposed Keynes solution in fact need not reject EA, indeed it cannot reject EA if this solution is to be truly scientific. His rejection simply manifests an ignorance of EA’s true nature, in science generally and in the physical sciences in particular. The acceptance of EA is simply a necessary precondition to the theoretical development of “hard science” generally. It does not a priori suppose that one theory inherently is superior to another, that is unless one of the theories in fact rejects EA, which Davidson in error understands his Keynes solution to do. He needs to radically rethink what is implied by EA generally speaking, which then might enable him to break this axiom’s presupposed unique link with neoclassical theory, the uniqueness of which apparently is assumed (incorrectly) by many economists.

      When reading Davidson’s “The Keynes Solution” it seems that EA in economics requires that the possibility of marketplace determinism, dubbed the efficient market, in principle excludes any interference in market operation coming from government regulation and oversight, from the workers themselves acting together in collectives, and from populist movements more generally seeking to improve the lot of the middle and lower classes. This ideologically dominated interpretation by NE theorists in support of elite interests (the wealthiest 1%) about what EA allows and doesn’t allow in economics can in no way be justified by reference to the EA in physics.

      The classical mechanics successfully developed by Isaac Newtonian might well have never have materialized as a science if he had truly thought that EA – the axiom in essence postulating a continuity in which the past manifests itself causally in the present, and the present then also correspondingly manifesting itself causally in the future – was the only thing he needed in order to regard his study of matter and motion as science. His science of matter and motion would then have been little more than an ongoing collection of empirical data for which the serial causality thereof would have remained a mystery. Every science purporting to explain cause and effect, including economics, must formulate and verify laws through which EA is empirically manifested, which various models of the laws thus formulated then will objectively demonstrate the validity of this fundamental axiom regarding cause and effect.

      It appears that all models of NE “validate” EA, but this validation collectively by all such models simply does not legitimate economics as an explanatory science of cause and effect. Models in a true science of economics must validate laws that are known to govern precisely how EA is manifested in economics, the laws of which currently are unknown. Economics today is thus basically in the same category as that of science prior to Newton: It in essence is a modern scholasticism whose models collectively validate no known laws of economics; and whose findings collectively thus have as much empirical significance as the findings of pre-Newtonian scholastics, perhaps according to folklore regarding science in that period, that were concerned with counting just how many angels can occupy the head of a pin. Models and theories in economics that collectively do little more than validate EA in the marketplace, independent of any laws that might actually be governing the marketplace “behind the scenes” (which laws, if they do exist, nevertheless remain unknown at present), do not legitimately constitute an explanatory science of marketplace cause and effect. In this regard their supposed “causal explanations” are pseudo-science, which unfortunately happens to be the current status of neoclassical economics.

      The laws governing economic activity past, present, and future, if such laws actually do exist, must necessarily encompass and take into account the interests of everyone thus fruitfully engaged in the market place, not only of services and products, but also of ideas regarding the same; the manifold interests of which include not only that of the owners of capital and the means of production, but also that of government, the capitalist workforce, and the general desire of the populace to improve the lot of capitalism’s middle and lower classes. Therefore, a principle “methodology” of educators in 21st century economics must become the teaching, in strict opposition to de facto neoclassical indoctrination about a presumed unique link between the “ergodic axiom” and neoclassical theory, of its true and actually quite different significance in economics, both in theory and empirically.

      That at least is my considered opinion on the subject. The objective of the RWER paper “The Nash dynamics of the wealthy, powerful; and privileged…” is to provide an exemplar of what this methodology can produce; the “dynamical laws” of which – whether only inferred or explicitly stated – can be examined in more detail through the modeling efforts of concerned economists. If you will, please note that license has been given to others to use the subject matter of this paper freely, hopefully in the discovery and/or construction of truly scientific laws that actually govern capitalism’s “political economy,” at whatever level or levels of economic, political, and social discourse.

    • Hello Fred, This a great idea. I encourage our readers to delve into this article. I also suggest Frank Stilwell’s book “Political Economy — The Contest of Economic Ideas” (3rd ed., Oxford University Press, 2012) but especially Chapter 40, “A Level Playing Field for Economic Ideas?, pp. 387-394

      Identifying the obstacles to reform is very crucial, and as many people have written including Edward Fullbrook and Frank Stilwell, these obstacles represent a formidable nexus. I feel we have identified the obstacles, which is the easy part; it is much more difficult to identify workable strategies to surmount the obstacles, which must be global, concerted and sustained. My own wwork focuses on educating the next generation and writing textbooks that recognize and address the limits and obstacles but then take the next forward.

      The classical economists concerned themseves with broader ethical issues and the conflict between different classes and how political economy and capitalism itself can affect different segments of soceity. We need a systematic return to this type of thinking. As Sheila Dow and many others have argued, we can learn a lot form re-examining the classical economists and this must be a centerpieces in any reconceptualization of economics edcuation.

  6. You said: “I immersed myself in my own research paradigm…”. You abuse the word “paradigm”, because you cannot have your own paradigm (here you merely mean “theory”). The word “paradigm” is a social construct, referring to a framework of objectives, assumptions and methods, which a community accept implicitly to facilitate communication.

    In fact, it was the neoclassical paradigm, supporters and reviewers of that paradigm, which must (almost by definition) reject your attempt to challenge a “much cherished neoclassical assertion”. It is the same if you criticize Keynes in a Keynesian economic journal. It not will be possible to destroy a paradigm within the paradigm. A paradigm must, by definition, protect itself. A paradigm shift requires a revolution. There are far too many economic paradigms; the neoclassical being the biggest and most influential one until recently.

    How can you possibly reform economic education if you don’t understand what a paradigm is? The world needs a definitive paradigm, otherwise there can be no useful conversation. Apart from a certain type of “pluralism”, most pluralism are poorly thought out notions of Tower of Babel. A proper notion of “pluralism” must exist within a new paradigm, which cannot tolerate any other contending paradigm. You have to find, or create, that new paradigm.

    • Hello

      I absolutely agree! My fault: careless use of the word paradigm; I should have written ‘research agenda’ instead of ‘research paradigm.’

      It also is true that paradigms protect themselecves; at the same when a paradigm becomes unable to explain, the more thoughtful practitioners are at least open to new possibilities, certainly not the majority.

      My article simply pointed out errors in deductive logic and for this reason I naively assumed it would have been welcomed within the paragdigm, digested and implemented. I was wrong and was not prepared for the visceral onslaught. As a former physics major (although I have not published anything in physics journals) I could not inmagine this happening in physics. AsI began forming the International Journal of Pluralism and Econonmics Education I realized that many people across the globe had similar experiences.

      I do understand what a paradigm is; once again I carelessly misused the word.

      To reform economics education, we need a global dialogue; I am only one individual and welcome the chance to dialogue with you and others about the best way forweard.



  7. Please, Jack. What are the five leading economic ideas that Galbraith refers to? Can’t find any specific reference.

    • Hello

      Based on my own reflection of Galbraith, (and I assume you are referring to John K.) is first and foremost power. His ideas were eye-opening for me when I read them as a student and given my naivete then could not understand why such comments, which I felt reflected the actual economy, were parried by the mainstream.
      Power, technostructure, planning, the state (government) and society.

  8. Dear Professor Reardon,

    I have share the same experience, to which I alluded in the book “Time and Money. How Long and How Much Money is Needed to Regulate a Viable Economy, Lecture Notes in Economics and Mathematical Systems, 670, Springer (2013) (see http://vimades.com/AUBIN/TM-Presentation.pdf). I just copy the section “Uconomia” which may confort your experience and your suggestions:

    6 Uconomia
    How Did Economists Get It So Wrong?, askedPaul Krugman in an article

    published on September 6, 2009. “As I see it, the economics profession went

    astray because economists, as a group, mistook beauty, clad in

    impressive-looking mathematics, for truth.” We cannot agree more with the

    dangers of the seduction of mathematics, in particular of the temptation to

    take theorems for reality. Economics, to be convinced to become a true

    “science” in the sense that it deals with measurable quantities, got rid of

    the adjective “political” formerly qualifying economics, opening the gap
    between economic and social sciences, guilty of “mathematicism,” as one

    speaks of “scientism.” In the same way that utopia and uchronia have been

    invented, the economy described by the human brain is more of a u-economy,

    or, to avoid the unfortunate alliteration, an uconomia.
    However, are mathematics guilty of the charge: “[. . . ] During the golden

    years, financial economists came to believe that markets were inherently

    stable—indeed, that stocks and other assets were always priced just right.

    There was nothing in the prevailing models suggesting the possibility of the

    kind of collapse that happened last year.”?
    This serious question deserves an elaborate answer.
    Mathematicians provide theorems, proving that assumptions imply conclusions,
    or that assumptions are the price to pay to buy conclusions. If this price

    of the assumption is too cheap to be relevant, we obtain junk conclusions as

    we speak of junk bounds: they are not profitable, and may be

    When they are used as mathematical metaphors in other disciplines,

    translation of mathematical concepts have to be validated by their

    specialists. This is another important question, because the “translation”

    of theorems true in mathematics may induce statements which are not

    consistent in the framework of the discipline. If the translated conclusion

    is “false,” this implies either that some assumptions are not satisfied or

    that the metaphor is not validated.

    Taking advantage of inescapably esoteric mathematics, requiring a forbidding
    access time to allow us their manipulation, those metaphors can be easily

    hijacked from their mathematical context to justify this or that ideology.

    The less validated, the more these metaphors are mathematically adorned.
    For instance, static economics used the basic tools of optimization and

    equilibrium theorems for explaining the exchange value and the emergence of

    prices: taking into account scarcity constraints on commodities, prices, and

    monetary values, it assumes the Walras law: it is forbidden to spend more in

    monetary values than what is received in an instantaneous transaction. In

    other words, the value of the transaction must be negative or equal to zero.
    This is indeed a sufficient condition (by no means necessary) for proving
    a mathematical theorem on the existence of a Walrasian (general)

    1. the behavior of the agents described by their demand functions of

    depending on prices and incomes;
    2. the set of available commodities to allocate among agents;
    3. and an arbitrary feasible allocation of a collective income derived from

    the value of the set of available commodity at each price,
    there exists an “equilibrium price.” This is at this point that the concept

    of equilibrium became polysemous. In mathematics and physics, as well as for

    L´eon Walras, an equilibrium is a stationary state of a dynamical system, as

    the Walras tatonnement process in economics. Starting from an equilibrium,

    the system does not evolve. Otherwise, prices are assumed to evolve

    according to the Walras tatonnement, the so-called supply and demand law, ˆ

    forbidding transactions before the infinite time when the allocation of

    commodities is viable in the sense that the sum of allocated commodities

    belongs to the set of available commodities.

    Non Walrasian tatonnement systems, or, rather, bilateral tatonnement

    processes governing both the evolution of commodities and prices have been

    studied by many authors.

    Note that it is this very “viability property” which does matter, not the

    fact that this price is an equilibrium in the mathematical sense. Hence

    disequilibrium means the violation of either one of these two meanings.

    Since we assume that the economic constraints depend on time, there is no

    (stationary) equilibrium anyway (keeping one component constant, a price,

    for instance, leads to some concept of disequilibrium, for instance).

    Disequilibrium thus means in this case the violation of viability. We rather

    use the term disviability (or non-clearing markets) instead
    of using the polysemous concept of “disequilibrium.

    Therefore the standard Walrasian tatonnement is disviable at every finite

    time and viable only when ˆ . . . time becomes infinite, except if we start

    from a Walras equilibrium and remain there forever!

    The Walras law is used as an ideological law and needs to be specified: who
    allocates the incomes (monetary endowments) among the agents? The answer is

    the “invisible hand” of Adam Smith, the undefined “Market” or a “Market

    Secretary,” who, then, fabricates an “Invisible Gosplan.”
    The static answer assumes that the endowment of the agent is derived from

    the commodity owned before the transaction, so that the income of the agent

    is the value of the endowed commodity. The values of the transactions must

    remain nonpositive in this framework. Consequently, money, used for

    allocating incomes to the agents, evaporatesfrom the static Walrasian


    To go from statics to dynamics in the absence of money requires that, at

    each time, the price is given at each date by the static Walras allocation

    mechanism. For that purpose, the static Walras law should be obeyed at each


    This is a nightmare that can kill an economy and, actually, did destroy some

    of them in many historical examples.

    Why should this static Walras law be required, whereas,an evolutionary

    economy involves transactions? Whenever time is involved, there is no reason

    to abide by this static Walras law. Credit has been slowly invented for

    transferring in the future abstract positive transaction valuesfor allowing

    present transactions of real commodities. In other words, credit allows the

    agents to obtain commodities which,being available at present time, may not

    be affordable by lack of monetary units to finance the transaction. The

    question arises to understand from where should come the credit, this

    necessary monetary endowment lubricating evolving transactions.
    Consequently, knowing
    1. the behavior of the agents described by theirtransaction functions(and no

    longer their demand functions) depending on commodities and prices;
    2. the set of available commodities to allocate among agents,
    compute at each instant the amount of money endowed to the agents for
    1. allowing the agents to realize their transactions;
    2. helping the invisible “Market” to regulate the prices.

    Accordingly, the Adam Smith’s invisible hand does belong to an invisible man

    who should use his other hand to advise the agents to perform their


    Still invisible, “He” could then pilot both the prices of the Market with

    one hand and the transactions of the agents with the other one, in a

    consistent way for the benefit of the agents, not necessarily for the


    Therefore,for providing agents viable commodities, which could be a

    reasonable objective, we need to study what a viable endowment of credit

    policy could be, allowed to violate the sanctified static Walras law during

    some adequate temporal windows if needed, viability oblige. In an

    evolutionary framework of economic variables made of transactions of

    commodities and prices, the aggregated values of the transactions fluctuate.

    This is what we observe, between financial crises, such as the ones of 1929

    and 2008, caused by inadequate and deregulated monetary endowments, too

    small for guaranteeing economic viability, too large for triggering
    financial exuberance. Monetary endowments, even as abstract numbers hidden in
    computers, are crucial because of their economic consequences, unemployment,
    poverty, etc.

    Therefore, we should try as much as we can to be agnosticist and not to

    abide by the “banker faith” in general equilibrium theory, as blind as the

    usual one, pretending that it is supported by scientific reasoning or

    mathematical proofs. This is not really the case since the available

    mathematics, motivated by the physical sciences, are not yet designed to

    account for the phenomena of the living world, to which our behaviors


    However, since the present-day economic doxa is based on general equilibrium
    theory, fortified by so many mathematical theorems based on optimization and
    nonlinear analysis, the evolutionary economic motivations described in the

    introduction are also based on other mathematical results, based on

    set-valued analysis, differential inclusion, and viability theory.
    The doxa dealt with the congelation of the admirable Walras tatonnement and

    its associated equilibrium. At that time, the end of nineteenth century, our

    contemporaneous mathematical tools were not available. One cannot reproach

    to the pioneers
    such as Francois Quesnay,Victor Mirabeau, Turgot, d’Alembert, Borda,

    Condorcet, Nicolas Canard, Augustin Cournot, Auguste Walras, his son Leon

    Walras(a socialist economist, according to Charles Peguy), Vilfredo Pareto,

    etc., to have dared using a mathematical approach for grasping social and

    economic issues despite great opposition. Later, Luitzen Brouwer, John von

    Neumann, Shizuo Kakutani, John Nash, Kenneth Arrow, Gerard Debreu, Robert

    Aumann, Lloyd Shapley, Herbert Scarf, Ky Fan and many others contributed to

    forge and develop difficult theorems on equilibria and optima justifying the

    concepts of static economies.

    The concept of time and evolution was not forgotten, however: it was

    involved in the works of Alfred Marshall, John Hicks, Friedrich Hayek and

    John Maynard Keynes, among too many others to quote them.

    The danger of accepting the static equilibrium point of view was recognized

    in 1944 by John von Neumann and Oscar Morgenstern at the end of the first

    Chapter of their monograph Theory of Games and Economic Behavior: “Our

    theory is thoroughly static. A dynamic theory would unquestionably be more

    complete and therefore, preferable [. . . ]” It was time to go from static

    to genuine evolutionary systems, which are not to be confused with the

    concepts of “repeated equilibria”, which required that at each instant, an

    instantaneous equilibrium mechanism provides the prices and the commodities

    obtained through a demand function depending on price and income.

    We single out a simpler and more appealing concept of (instantaneous)

    transaction, which is the velocity of an evolving commodity, and suggest to

    replace demand functions by transactions functions, depending on the

    commodities, the prices and the monetary endowments.

    To keep monetary endowment always equal to 0 became the Grail of many
    economists, bankers, and politicians, instead of computing it at each time

    for guaranteeing the viability of the economic system.

    What may be wrong with present day orthodoxy deals not only with social and
    economic issues, but also with mathematical theories supporting them.

    Mathematics evolve, too, increasing the tool-box offered to users, even

    though if most of them were motivated by physical and engineering sciences

    and not by social and economic ones.

    Economics is still identified with the exclusive and exclusively use of

    equilibrium and optimization theories as chance in finance is automatically

    mathematically translated by stochastic differential equations, as if there

    were still the only mathematical approaches to be offered.

    This may be what Paul Krugman had in mind.

    Questioning the mathematical economics doxa on the mathematical side is the
    purpose of this study, hopefully strengthening heterodox proposal in

    economics, reacting to the pernicious features of general equilibrium

    theory, narrowly identified with mathematical economics.

    This does not guarantee that the economic motivations are relevant and that

    the conclusions provide better explanations and guidelines, but, at least,

    they cannot be dismissed under the pretext of a lack of mathematical rigor.

    What is important is the translation of mathematical language to
    economically relevant issues, hoping that economists will debate our

    conclusions and question our assumptions, with no need to be involved in the

    intricacies of mathematics that they did not have the opportunity to become

    familiar with. It is enough to trust the mathematicians to testify that this

    part of the study is technically sound.

    Abandoning the identification of (mathematical) economy with equilibrium
    theory and a pervading optimization behavior of economic agents and trading

    it for a dynamical behavior of economic agents in search of viable instead

    of optimal evolutions has been a view rejected by most academic economists.

    Ever since the first study [A dynamical, pure exchange economy with feedback

    pricing] presented in a high standard economic journal in 1981, for this

    very same reason: it was not economically relevant since there was no

    utility function nor equilibrium. This is still the current argument more

    than 30 years later for ignoring studies along these lines. Very recently

    (2012), an editor of a famous review rejected without referee an article

    dealing with the topic of this book: “I do not understand what role
    the economic agents play in the author’s model. They are obviously not

    maximizing, but it appearsthat they also do not follow simple behavioral

    rules.” “Appearance” seems nowadays the scientific yardstick to hide the fact

    that no effort is made to read even the introduction where this behavior is

    described. Furthermore, “the paper is kept at a highly abstract level”, as

    if the “long march to abstraction” was not the main successful enterprize of

    mankind, whether good or bad its consequence!

    In this short text, right or wrong, we do replace maximizing behavior by a
    dynamical one, guaranteeing viability instead of optimality, advising to

    choose decisions at the right moment rather than optimal ones, and, for

    that purpose, following the route of increasing abstraction.

    This has always happened, as the history of science and technology teaches

    us. Crazes and irrational fads rule parts of academic science as many other

    human activities: Charles Mackay, author of the 1841 “Memoirs of

    Extraordinary Popular Delusions and the Madness of Crowds” on bubbles or

    financial manias among many other Panurgean or mimetic behaviors, summarized

    it in his poem:

    You have no enemies, you say?
    Alas, my friend, the boast is poor,
    He who has mingled in the fray
    Of duty, that the brave endure,
    Must have made foes.
    If you have none,
    Small is the work that you have done.

  9. Fred Zaman said:

    The methodology driving radical change in economics and its teaching must surely be motivational as well as technical. For example, consider that capitalism’s “efficient marketeers” (capitalism’s unwavering free market proponents and devotees) are avaricious birds of prey (e.g. the American bald eagle) that devour the economies of the weak and defenseless; and the institutional instrument through which capitalist “birds of prey” sharpen their economic beaks and political claws is “efficient market theory,” aka neoclassical economics. The habitat of these economic birds of prey, capitalism’s efficient marketeers, is the world economy; the nests of which lie high up in the peaks of its economic mountains. The objective of radical change in economics and its teaching thus must be to dull, even do serious damage to, the economic beaks and political claws of capitalism’s efficient marketeers; and if possible to scale the economic mountaintops of capitalism’s world order and destroy their nests – those places high up in the pecking order where capitalism’s wealthiest 1% propagate their species; so that in the future there will be fewer economic birds of prey to decimate those living in the economic valleys of the 99%.

    Now consider from this point of view the Great Seal of the United States: The eagle on the obverse side of the Great Seal might actually not represent democracy, but rather capitalism’s efficient marketeering; with the banner E Pluribus Unum held in the beak then symbolizing a global world order unified economically and politically under capitalism. The arrows held by the eagle’s left claw (neoliberal ideology?) then symbolizing the multitude of the economies of the peoples of the world captured through the politics of capitalism’s efficient marketeering; and the olive branch of peace held in the right claw (neoconservative ideology?) symbolic of the “world peace” thereby imposed globally, through the political power of capitalism’s efficient marketeering. Novus Ordo Seclorum on the reverse side of the Great Seal, along with its unfinished pyramid and all-seeing eye set atop, then have a corresponding economic and political reinterpretation of the global power and reach of capitalism’s efficient marketeering. The U.S. one dollar bill, with both sides of the Great Seal inscribed on its back side, is symbolic of just how the objectives symbolized by the Great Seal, as given above, are being realized – through the financial power and might of Wall Street; which “Great Seal of the United States” thus de facto has now become the “Great Seal of Capitalism’s World Order.” Democracy to capitalism’s efficient marketeers is simply one, very inefficient, means to the end envisioned. Plutocracy is yet another, far more efficient means to the end earnestly sought by the wealthiest 1% – the accumulation of all wealth, power, and privilege in the “benevolent hand” of capitalism. Autocracy even has a place in the pantheon of nations now “occupied” by the global order of capitalism.

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