tag:blogger.com,1999:blog-2098432983500045934.post6229459330492019956..comments2024-03-12T22:19:32.339-04:00Comments on The New Arthurian Economics: "Groping"The Arthurianhttp://www.blogger.com/profile/16501331051089400601noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-2098432983500045934.post-47926476409275229232022-03-26T03:20:08.453-04:002022-03-26T03:20:08.453-04:00From endnote 9 for chapter 3 in Geoff Mann's I...From endnote 9 for chapter 3 in Geoff Mann's <a href="https://rampages.us/goldstein/wp-content/uploads/sites/7807/2018/08/Mann-2017-In-the-long-run-we-are-all-dead-Keynesianism-pol.pdf" rel="nofollow">In the Long Run We Are All Dead</a>:<br /><br />While the expectation that a market left to its own devices always clears is as essential to the work of David Ricardo as it is to that of Milton Friedman, the framework that has probably most influenced the way in which Say’s Law is operational-ized is the so-called “Walrasian” general equilibrium system developed by the political economist Léon Walras and others in the 1870s. Walras—a socialist, it turns out—argued that prices are determined as if there were an economy-wide grand auctioneer, who gradually “discovered” equilibrium prices through <i>tatônnement</i>, or “groping” (the word’s connotations in English have led even English texts to use the French).<br /><br />[the note continues:]<br /><br />Walras was the first to posit—but could not prove—that this process of discovery could determine a set or “vector” of prices that simultaneously clear all markets. The logical possibility such a vector exists is the formal condition of “general equilibrium.” When Gérard Debreu and Kenneth Arrow finally proved this in the early 1950s, and in the process further emboldened the burgeoning “mathematization” of economic thought, they provided an <i>ex post facto</i> formal foundation for Say’s Law. Indeed, Arrow-Debreu (or AD) is the “scientific” basis for contemporary capital’s opposition to state “meddling.” See Kenneth Arrow and Gérard Debreu, “Existence of an Equilibrium for a Competitive Economy,” <i>Econometrica</i> 20, 1954, 265. For more on Keynes’s critique of Say’s Law, see Chapters 9, 10, and 11.The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.comtag:blogger.com,1999:blog-2098432983500045934.post-87124241475272265382013-09-07T04:07:29.419-04:002013-09-07T04:07:29.419-04:00From the Crisis Chronicles:
"With the auctio...From the <a href="http://libertystreeteconomics.newyorkfed.org/2013/09/crisis-chronicles-tulip-mania-1633-37.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+LibertyStreetEconomics+%28Liberty+Street+Economics%29" rel="nofollow">Crisis Chronicles</a>:<br /><br />"<b>With the auctioneer unable to find a price at which bulbs would sell, the panicked withdrawal of purchasing speculators spread to panicked “fire sales” by leveraged speculators who had bought bulbs on margin and needed to sell. “The market for tulip bulbs simply ceased to exist,” as <i>Tulipomania</i> reports. When bulbs could be sold, it was for 1 to 5 percent of the previous value.</b>"<br />The Arthurianhttps://www.blogger.com/profile/16501331051089400601noreply@blogger.com