The visible hand in economics

Conceptions of economics: Comment from Dr Doyle

Posted on: November 4, 2008

A few weeks ago a fellow named Jeffrey Doyle posted a “history of economic thought” type comment/post on the blog, which can be found here.

Beyond this he also added one additional criticism of “neo-classical economics” – the focus on “monetary flows” instead of energy.  Of course, as a criticism of economic science this is a misnomer – economic science is the study of scarcity, and “monetary flows” are merely a convientent way of representing this scarcity.  Using energy as a representation should – if the models are sufficiently specified – provide the same results.  Now, in when applying models there may be substantial differences, given what is implicitly assumed to be useful or not in different models – while this argument is important for application it is not something I can argue about, as I do not have the scarce intellectual talent to go around and apply a new set of assumptions to an underlying framework of scarcity.

However, my impression is that Dr Doyle is not criticising the individualistic methodological process in economics – he is attacking the “economic unit” used when we study scarcity, something that is constantly occurring and is a healthy part of any discipline.

5 Responses to "Conceptions of economics: Comment from Dr Doyle"

[…] … the individualistic methodological process in economics – he is attacking the “economic unit” used when we study scarcity, something that is constantly occurring and is a healthy part of any discipline. « Credit Crunch jokes .. More […]

[…] Conceptions of economics: Comment from Dr Doyle « The visible hand … […]

Another article questioning modern economic methodology and the importance (or lack of) it places in understanding energy availability and EROI. http://eroi.theoildrum.com/node/4762#more

“Another article questioning modern economic methodology and the importance (or lack of) it places in understanding energy availability and EROI”

Again, this is an issue of the application of economic ideas – not of economic methodology. The method we use to analyse scaracity is very good – it is the application of the method where there might be problems.

Fundamentally, with oil there is a debate surrounding the ability of the price to reflect scarcity (because of limited information surrounding reserves) and the degree of substitutability away from oil – these are debates about the value judgments involved.

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