A question on Marx and Value

In neo-classical economic theory there are all sorts of concepts that, though mathematically elegant on paper, have very little descriptive power in the real world. When was a capitalist society ever in General Equilibrium?

This is poor philosophy of economics. Whether a concept has descriptive power in the real world is not the same thing as whether it is observed as cleanly occurring. AGE, CGE and DSGE analyses are used all the time for explaining and predicting macroeconomic phenomena; the object is to create useful methods of analysis, not discrete phenomena which are merely designed to be observed. The whole basis of general equilibrium theory is that global markets do tend towards general equilibrium, and whether that's true or not is contentious, but there's no obvious sense in which global markets don't approximate general equilibrium theory.

When was there ever Pareto Optimality?

Whenever you have a market which has sufficiently complete information, and this is apparent in high-information, low-volume markets such as luxury goods, as well as low frequency public capital markets. In large markets with missing information, of course you deviate from optimality, but talking about these deviations, whether they are stochastic or systematic, doesn't make any intellectual sense unless you've defined and applied the original concept in the first place.

When did consumers ever measure their desires in utils?

Economists don't represent consumers with cardinal utility, this is one of the most basic traditions of 20th-century welfare economics, and in either case it's not about what consumers measure, it's about how they are observed behaving, in which case there are huge volumes of work in microeconomics analyzing consumer approximation of utility functions.

SNLT is not like that. SNLT is something very real that we can observe at work everyday.

SNLT does not fulfill the function of explaining macroeconomic variables or demand curves, as GE, Pareto efficiency and utility theory do. The most relevant analogue to SNLT in mainstream economics is production cost, which is equally observable.

/r/askphilosophy Thread Parent