Economics Dictionary of ArgumentsHome
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| Neoclassical economics: Neoclassical economics is a school of economic thought that emerged in the late 19th century. It is based on the principles of rational choice, marginalism, and general equilibrium. Neoclassical economists believe that markets are the most efficient way to allocate resources and that government intervention should be minimized. See also Efficiency, Markets, Equilibrium, Interventions, Liberalism, Rational Choice._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Geoffrey C. Harcourt on Neoclassical Economics - Dictionary of Arguments
Harcourt 2 Neoclassical economics/Harcourt: By 'neoclassical' we mean the body of doctrine that derives from the writings of the first and second generations of marginalists, whose writings are critically reviewed in Stigler's Production and Distribution Theories, Stigler [1941](1). The neoclassicals whose work is most relevant in the context of the issues discussed in this book are Marshall, Walras, Wicksell, J. B. Clark and Wicksteed. >Marginalism. Harcourt I 122 Neoclassicals/Samuelson/Harcourt: The neoclassical tradition, like the Christian, believes that profound truths can be told by way of parable. The neoclassical parables are intended to enlighten believers and non-believers alike concerning the forces which determine the distribution of income between profitreceivers and wage-earners, the patterns of capital accumulation and economic growth over time and the choice of the techniques of production associated with these developments. Four truths which, before the revelations of the false and true prophets in the course of the recent debate ((s) the >Cambridge capital controversy), were thought to be established were: (1) an association between lower rates of profits and higher values of capital per man employed; (2) an association between lower rates of profits and higher capital-output ratios; (3) an association between lower rates of profits and (through investment in more 'mechanized' or 'round-about' methods of production) higher sustainable steady states of consumption per head (up to a maximum); (4) that, in competitive conditions, the distribution of income between profit-receivers and wage-earners can be explained by a knowledge of marginal products and factor supplies. Harcourt: The 'explanation' referred to in parable (4) relates to expressions for the equilibrium values of factor prices and supplies, in a generalequilibrium situation in which demand factors, e.g. consumer tastes constrained by incomes, also play a role. That these truths were accepted seems to be a fair inference from the topics that Samuelson [1966](2), for example, chose to discuss in his summing-up of the debate. The references to the views of earlier writers given by Garegnani [1966(3), 1970a(4)] and Pasinetti [1966a(5), 1969(6), 1970(7)] are further evidence, as is the climax to Stigler's account of neoclassical economics, the discussion of the marginal productivity theory of distribution itself, in Stigler [1941](8), chapter xn. >Economic models, >Idealization, >Marginalism, >Production function, >Equilibrium, >Neo-neoclassicals, >Neo-Keynesianism. 1. Stigler, George J. [1941] Production and Distribution Theories: The Formative Period (New York: Macmillan). 2. Samuelson P.A. [1966a] 'A Summing Up', Quarterly Journal of Economics, LXXX. pp. 568-83. 3. Garegnani, P. [1966] 'Switching of Techniques', Quarterly Journal of Economics, LXXX, pp. 554-67. 4. Garegnani, P. [1970a] 'Heterogeneous Capital, the Production Function and the Theory of Distribution', Review of Economic Studies, XXXVII (3), pp. 407-36. 5. Pasinetti, L.L. [1966a] 'Changes in the Rate of Profit and Switches of Techniques', Quarterly Journal of Economics, LXXX, pp. 503-17. 6. Pasinetti, L.L. [1969] 'Switches of Technique and the "Rate of Return" in Capital Theory', Economic Journal, LXXIX, pp. 508-31. 7. Pasinetti, L.L. [1970] 'Again on Capital Theory and Solow's "Rate of Return" ', Economic Journal, LXXX, pp. 428-31. 8. Stigler, George J. [1941] Production and Distribution Theories: The Formative Period (New York: Macmillan)._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Harcourt I Geoffrey C. Harcourt Some Cambridge controversies in the theory of capital Cambridge 1972 |
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