Two nice posts by my good friend Pete Boettke on prices, equilibrium, and the functioning of markets.
Prices doing their job
The function of "market agitation"
I have become much more sympathetic to the Austrian view of the value of equilibrium theory. James Buchanan had this right: if you ALMOST become a pure subjectiviist, and if you consider the tendency toward a single price rather than simply assume single price, you can have the best of both worlds. Jim's best writing on this, Cost and Choice, is undervalued. With subjectivism and "agitation," it is possible to stay in the world of formal economics, and not go out into the kaleidic absurdism of Ludwig Lachmann. (Though Don B. suggests even LL should be appreciated).
Had coffee with Pete and young Coyne yesterday. A pleasant time at the Dunkin' Donuts in Fairfax.
Prices doing their job
The function of "market agitation"
I have become much more sympathetic to the Austrian view of the value of equilibrium theory. James Buchanan had this right: if you ALMOST become a pure subjectiviist, and if you consider the tendency toward a single price rather than simply assume single price, you can have the best of both worlds. Jim's best writing on this, Cost and Choice, is undervalued. With subjectivism and "agitation," it is possible to stay in the world of formal economics, and not go out into the kaleidic absurdism of Ludwig Lachmann. (Though Don B. suggests even LL should be appreciated).
Had coffee with Pete and young Coyne yesterday. A pleasant time at the Dunkin' Donuts in Fairfax.
1 comment:
Hm, I remember you addressing the undergrads in the economics club at GMU last fall, saying that economics is about getting prices "righ". Generally think of you as a non-price-subjectivist.
/Lotta Moberg
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