#neoclassical economists

[revindicatedbyhistory]

i think the reason people typically dislike economics is because they associate it with math but like. economics is a social science

[moleshow]

I am a stupid person. Where should I begin reading about economics.

update: added pdfs for the books

where you should begin depends on what you want to know. my response is long so i'm putting it under a readmore

if you want to know about economic theory, that's one thing; if you want to know about economics in practice (i.e. the way economies operate), that's another. these things are related, but they're often in separate books.

if there's something you want to know about specifically feel free to ask--i may or may not be able to provide a suggestion on what you should read. my wheelhouse is mainly international economics and political economy so note that my recommendations are not the end-all-be-all of the field.

i've uploaded pdfs for all of these books here: https://gofile.io/d/hDB9vU i wasn't able to find a pdf of the 2020 edition of the Frieden but i was able to find the 2017 edition.

the first recommendation i have is unfortunately a textbook. theoretical foundations are important 😔

An Introduction to International Economics: New Perspectives on the World Economy by Kenneth Reinert

this book's focus is primarily on neoclassical economic theory (which is often what people mean when they say "economics"), but it provides a strong foundation for thinking about markets, trade, and currencies.

i also want to note here that economic theories are best thought of as lenses through which to look at phenomena. all of these lenses illuminate some things and obfuscate others. so the utility of a given theory is dependent upon what you're trying to examine.

2. The Travels of a T-Shirt in the Global Economy: An Economist Examines the Markets, Power, and Politics of World Trade by Pietra Rivoli

this book is a lot of fun, and falls pretty squarely into the "political economy" camp. Rivoli takes as her subject a t-shirt from a walgreens in florida (if memory serves), and follows the chain of production, to find out how it got there--as well as where shirts like it might go after being purchased. along the way she looks at the dynamics of production in practice, so she looks at the role of labor, firms, governments, brokers, etc.

i would almost recommend starting with this one or reading it alongside the Reinert so you aren't raw-dogging a textbook.

3. Global Capitalism: Its Fall and Rise in the Twentieth Century and Its Stumbles in the Twenty-First by Jeffry Frieden

for this one, you'll want to read the 2020 edition because the 2007 edition doesn't talk about the global financial crisis of 2008. this is a book that really is what it says on the tin--a history of global capitalism. it's particularly useful for understanding the origins and consequences of the postwar economic order. it contains some good discussions of keynesian economics and the neoliberal school of thought that followed.

4. World-Systems Analysis: An Introduction by Immanuel Wallerstein

this one's not a crucial read, but it covers a different way of thinking about basic economic units in international economics (i.e. not limiting one's economic analysis to nation-state units but instead thinking about the global economy as a system).

5. Running Steel, Running America by Judith Stein

i've put this book here because the latter half of the book essentially goes through how and why american production changed in the latter half of the 20th century, focusing chiefly on the production of steel. (this is another political economy book.) Stein illustrates the consequences of US foreign policy for the domestic economy, particularly during the 1970s--a crucial period. the whole book is worth reading, but the first half deals more with labor and politics so it's not directly related to your question.

feel free to reach out if you have more questions or need clarification on something here👍

[probablyasocialecologist]

Thomas Malthus, who is often interpreted as arguing for population control to overcome economic limits, actually invoked the threat of limits to advocate for growth, arguing that scarcity is a natural fact, and that only a growth-based economy could overcome it. In this way, Malthus was one of the first ‘apostles of growth’. Since then, both neoclassical economists and elites sought to further cement the idea that growth is needed to overcome natural scarcity as common sense. But scarcity is not a natural fact. Rather, scarcity, as well as the social hierarchies that limit autonomy and self-determination, are imposed by a capitalist system of production. As a corollary, degrowth is not about imposing limits on society according to natural scarcity, but about regaining autonomy to collectively create public abundance, and also deliberate and set limits. And this – collectively setting limits – is a key prerequisite for the formation of autonomous, democratic governance, as the Greek philosopher Cornelius Castoriadis argues in his work. Indeed, it is precisely capitalism – through alienating us from each other and from the abundance of the earth – which undemocratically imposes limits on us and makes it impossible for us to set our own. Thus, just as degrowth is about the collective reappropriation and dépense of social surplus, it is also about the rejection of natural scarcity, the undoing of imposed limits set on us by capitalism and hierarchy, deliberating collective limits, and thus about creating a self-determined post-scarcity society.

The Future Is Degrowth: A Guide to a World Beyond Capitalism

[beardedmrbean]

Traditionally incoming Argentinian presidents give an inauguration speech inside of Congress to other politicians. Javier Milei, a former “tantric sex instructor” turned libertarian economist, symbolically gave his speech with his back to the Congress facing towards the people. 

“For more than 100 years, politicians have insisted on defending a model that only produces poverty, stagnation, and misery,” President Milei said. “A model that assumes that citizens exist to serve politics, not that politics exists to serve citizens.” He also promised an “end a long and sad history of decadence and decline” and promote a new era based on peace, prosperity, and freedom.

Since his headline-making election victory last month, media portrayal of Milei has ranged from dismissive to condescending, often depicting him as an eccentric “far-right populist.” Yet, since taking office, Milei has shelved many of his campaign’s more contentious proposals and begun implementing a radical but, by international standards, orthodox reform plan to revitalize Argentina’s faltering economy.

Milei inherited a challenging situation. Argentina’s economy has shrunk by 12 per cent over the last decade, annual inflation reached an extraordinary 160 per cent in November, while the poverty rate increased to 40 per cent in the first half of 2023.

Argentina has a fascinating economic history that led up to this point. In the 19th century post-independence Argentina adopted a liberal constitution that helped deliver an impressive economic expansion.

By the early 20th century, Argentina was one of the world’s richest countries, driven by agricultural exports. Real wages were comparable to Britain and only slightly below the United States. Millions fled destitution in southern Europe for a new life in Argentina. Buenos Aires has been labelled the “Paris of South America” because of spectacular neoclassical architecture built during this era.

This turned to disaster over the subsequent decades because of collectivist rule – from military dictatorships to avidly socialist leaders. Argentina nationalised industries, subsidised domestic production, limited external trade, and introduced an unaffordable welfare state. This has become known as the Peronism, named after 20th century president Juan Domingo Perón, a leftist populist leader who supressed opposition and controlled the press.

This agenda accelerated in recent decades under self-identifying Peronist leaders, turning Argentina into one of the world’s most closed and heavily regulated countries. The latest Human Freedom Index places Argentina at 163rd in the world for openness to trade and 143rd for regulatory burden. This has culminated in an economy on the precipice of economic disaster.

Not wasting any time, Milei has proposed a mega package of over 350 economic reforms to open the economy and remove regulatory barriers. This includes privatising inefficient state assets, eliminating rent controls and restrictive retail regulations, liberalising labour laws, lifting export prohibitions, and allowing contracts in foreign currencies.

There has been a notable absence of some of most radical ideas – such as legalising organ sales or banning abortion. He has also put on hold plans to dollarise the economy and abolish the central bank. Instead, at least by international standards, the agenda contains several orthodox economic reforms.

Many of the measures – such as cutting spending to get the deficit (currently at 15 per cent of GDP) under control, opening the country up to international trade, and liberalising the airline industry through ‘open skies’ policy – would be required to join the European Union. The government is eliminating capital and currency controls and allowing the peso to devalue – measures that the IMF’s managing director Kristina Georgieva said these are important to stabilise the economy.

There are undoubtedly significant challenges ahead and some darker elements to agenda.

Milei has been, uncharacteristically for a politician, honest that “in the short term the situation will get worse”. The removal of price controls, for example, will increase inflation until demand and supply can stabilise to end shortages. But, he says, “then we will see the fruits of our efforts, having created the foundations of a solid and sustainable growth over time.”

The government is facing significant opposition, with the union movement organising mass protests and threatening a general strike. The government has responded by proposing questionable new anti-protest laws, that include lengthy jail sentences for road-blocking and requirements to seek permission for gatherings of more than three people in a public place. Milei, who could struggle to get much of his agenda through Argentina’s Congress, is asking for sweeping emergency presidential powers until the end of 2025. This raises serious questions about democratic accountability.

Nevertheless, there are some positive early signs. Since Milei’s election Argentina’s flagship stock index has risen by almost one-third and the peso’s value has not collapsed. Argentina could soon benefit from a major new shale pipeline pumping one million barrels of crude a day (helped along by reforms that allow exports of oil and sales at market prices) and the mining of the second largest proven lithium reserves in the world.

Argentina has long served as a solemn reminder that prosperity is neither inevitable nor unassailable. Misguided policies can transform mere challenges into a profound crisis. Milei is offering a glimmer of hope: redemption may just be possible. Let’s also hope that Britain’s leaders can similarly take the path of reform, ideally before things get as bad as Argentina.

Matthew Lesh is the Director of Public Policy and Communications at the Institute of Economic Affairs

[edwad]

then why are the vast majority of neoclassical economists opposed to socialism smartass

most people in general are opposed to socialism and obviously there were lots of developments and institutionalization that came after. that doesn't change the origin story though pal

[alanshemper]

In the twenty-first century, realizing that economics is totally fucked is a rite of passage for every serious intellectual. It’s more or less a precondition for doing anything actually interesting in the social sciences. But after a certain point, it’s not enough to just bash this politburo, boys’ club, or priesthood and its dogmas. To do so is merely to define yourself in opposition to the enemy.

What we need is an actual science of the economy, one which we presently lack. Without it we will be unable to do the kind of planning which is necessary in order to establish economic democracy, build up new industries, achieve full employment, and complete a green transition. Economics clearly has dropped the ball. Who will pick it up? And how do you avoid making the same mistakes?

July 2023

[shituationist]

Do you have any good sources/links critiquing market socialism? I’m thinking C4SS in particular.

I think the best book critiquing market liberalism in general is John O'Neill's the Market: Ethics, Knowledge and Politics, which comprehensively addresses major arguments in favor of markets or against socialist planning. O'Neill examines the Weber/von Mises "calculation problem," the von Hayek "knowledge problem," as well as critiques of planning from public choice theory and neoclassical welfare theory. O'Neill does this by contrasting the philosophies and underlying philosophical assumptions of pro-market thinkers to those of Otto Neurath, who was a partisan of non-monetary socialist planning up until his death, and whose contributions to the debate are often underpublicized (usually in favor of making Oskar Lange, himself a market socialist, the primary interlocuter with the Austrians).

Otto Neurath himself is worth reading because he provides an epistemological defense of economic planning. You can find his collected economic writings on libgen pretty easily. It's worth perusing in tandem with O'Neill's book.

Honorable mention to Paul Cockshott and Allin Cottrell's essay "Anti-Hayek", which is a decent materialist counter to the esoteric epistemology von Hayek uses to suggest socialist planning is ineffective. Their essay on Leonid Kantoravich's linear programming and in-kind planning is also worth reading as a critique of the Weber/von Mises position on economic calculation. Cockshott has unfortunately sullied his legacy via his 70s Maoist sex politics, but his essays critiquing the Austrian positions in the socialist planning debates are still worthy of consideration.

William Kapp was a critic of market liberalism whose book the Social Costs of Private Enterprise prefigured a lot of critiques of laissez-faire markets that later ecological economists like Georgescu-Roegen and Herman Daly (who were not exactly "anti-market" but whose critiques do underline how the neoclassical idealization of markets is not... ideal) would make more famous. Kapp focuses on the non-monetary and unmonetizable effects of private enterprise, which by definition can not enter into the strictly monetary accounting that informs the decision-making of any commercial enterprise, and which empirically cut against the pretensions of theoretical/rationalistic market liberal utopias.

The Parecon guys, Robin Hahnel and Michel Albert, provide both an institutional framework for planning and several critiques of market liberalism which are applicable to market socialism and market anarchism. Robin Hahnel's Milton's Myths series on socialisteconomist is really good and intended for a popular audience. Pat Devine is a thinker of a similar type who is less of a marginalist, unfortunately I can't name any essays or books of his off the top of my head, but he seems of interest.

Paul Mattick's "Limits of the Mixed Economy" I think would be relevant to Keynesian and post-Keynesian policy recommendations, since Keynesianism is of enduring interest to social democrats. I've never finished it though, so I don't really know. I do know it's talked about a lot in that way. Would be interesting to come back to that book some day myself.

As far as mutualism goes, I think Marx's critique of Proudhon's mutualism and similar schemes in the Poverty of Philosophy is definitive, even if Marx was not entirely honest w/r/t his object of critique. Engels's additions to this critique in his late prefaces to the Poverty of Philosophy and his debates with German Proudhonists over the housing question provide a sound enough basis for rejecting those kinds of schemes in favor of common ownership (i.e. communism).

<everything beyond this is based on personal reminiscence and not really a direct answer, take with a grain of salt>

With regards to C4SS, it's harder to say, b/c C4SS's moment seems to have passed, their moment was not that long in the first place, and they've always been defined politically more by their break from right-wing libertarianism than their antagonism to, say, Marxists, who are antagonistic intellectually but don't really have neo-mutualists on their radar, or anarchist-communists, who either just side with the Marxists, gesture vaguely in the direction of "the commons", or otherwise don't care enough about the topic to argue about it. As such I don't think C4SS itself has ever been singled out by anyone in an important way, but insofar as market anarchism is just market liberalism taken to its logical conclusions, critiques of the latter apply just as much to the former, and the sources above all provide compelling arguments against market liberalism and in favor of socialist planning.

Groups like C4SS thrived (relatively - C4SS has never had that large of a following) in a political atmosphere where the word "socialism" was still a very dirty one, where there was a lot of enthusiasm around p2p filesharing networks and p2p networks in general, where the overarching political consensus was that there was no alternative to markets and commerce, and where acephalous and amorphous political movements (that were seemingly structurally analogous to markets) had not yet exposed their limitations but seemed to be a genuine threat to state power (and not just a particular state power, but state power in general). Under those conditions, where leftists felt embarrassed to be proponents of what in the popular imagination had just been discredited with the fall of the Soviet bloc, C4SS style p2p utopianism was something you could gesture vaguely towards as an alternative, since those p2p schemes avoided the "centralized," "monolithic," and "sclerotic" epithets so often applied to central planning regimes, and fit well within the American political imaginary which has long treated decentralization as a virtue (the list of American endorsers of decentralism includes such diverse names as Thomas Jefferson, Henry David Thoreau, John C. Calhoun, Lysander Spooner, George Wallace, Murray Bookchin and Bob Black). That atmosphere has given way to one where the left once again favors more traditionally structured organizations, especially after the fizzle-out of the 2020 uprisings and the abject failure that was decentralist-anarchist (non-/anti-)leadership in places like Seattle and Portland, which resulted in no lasting victories and which frankly embarrassed the anarchist movement in North America (reminiscent of the numerous embarrassments for anarchists recounted in Engels's the Bakuninists at Work). There are still true believers, but right-wing libertarianism no longer funnels people in their direction as much now that the Libertarian Party has more or less successfully been merged into the network of miscellaneous reactionary movements. Self-identifying "left-libertarians" seem to me to be an increasingly rare breed.

Genuine market liberalism is also increasingly unpopular on the left and right. Liberals under Biden have embraced "industrial policy" which is ill-defined but seems to involve the state playing an active role in economic development, especially fostering domestic industries to reduce dependence on what the state identifies as its foreign rivals. Given how the libertarian movement continues to shed a lot of its left-wing cultural sympathies (not that there aren't holdouts), an SEK3 type is hard to imagine emerging from today's libertarian milieu, especially the libertarians below the age of 25.

I guess shameless self-promotion here for my own article for a "Mutual Exchange" series where I critiqued anarchist decentralism and the "decentralization/centralization" dichotomy that C4SS-ites are so endeared to: https://c4ss.org/content/53124

I know I've gone off a bit here, so I'll stop pontificating, but I hope this is helpful to anyone who's interested in these debates or in a potentially unreliable narrative developed primarily through online interactions.

[beguines]

Economics is an academic discipline premised on "the failure to recognize power relationships in society", as Robert Chernomas and Ian Hudson has recently put it. Economists tend to depict the capitalist economy as the outcome of voluntary agreements between free and equal individuals; as a sphere in which domination is excluded a priori. The economy is defined from the outset by the absence of power. For economists, the expression "free market" is a pleonasm, whereas for Marx, it is a contradiction in terms. This denial of power is the result of a twofold intellectual operation. First, the market is presented as the determining moment of the economic totality, which means that a part of the economy is abstracted from the totality and represented as the whole. This primacy of exchange was already visible in classical political economy, despite its emphasis on production, but it only really came to the fore with the so-called marginal revolution in the 1870s. In neoclassical economics, market exchange is presented as "the central organizing principle of capitalist society", reducing production to "a means of indirect exchange between the present and the future". And, not only is the market presented as the essential feature of the economy as a whole, in some strands of modern economics—most notably in the work of Gary Becker—the voluntary exchange of goods between rational and utility-maximising agents is elevated into a prism through which all social phenomena, including crime, discrimination and politics, can and ought to be understood.

The second intellectual operation underpinning the disappearance of power relationships in economics, is the introduction of a set of assumptions and abstractions resulting in a conception of the market which excludes the very possibility of domination. The agents who engage in transactions on the market are assumed to be isolated, hyper-rational and utility-maximising individuals with infinite and infallible information and expectations. Such rational individuals comprises the Archimedean point of the social ontology of economics, a kind of sui generis substance which accounts for everything else. Assuming this transhistorical economic rationality, the need to explain the existence of capitalism conveniently disappears. From such a perspective, the capitalist economy is simply what appears spontaneously if human nature is allowed to unfold itself. This is why "[i]n most accounts of capitalism and its origin, there really is no origin", as Ellen Meiksins Wood notes. The market is perceived as the place where these rational individuals meet and enter into contractual relations with each other. In a competitive market, there are barriers to entry, and hence no monopolies, apart from the regretfully necessary so-called natural monopolies. The absence of monopolies means that a market agent is never forced to do business with a particular agent, which is why every act of exchange can be regarded as voluntary. Furthermore, when individuals show up on the market, they do so as owners of commodities, and as such they are completely equal. What and who these individuals are outside of the market relation is seen as irrelevant for economic theory, and the question of why they show up on the market to begin with is equally absent—generally, economics simply assume that people show up on the market to sell their commodities after having carefully weighed the possibilities open to them and reached the conclusion that this was in fact the most rational thing to do, i.e., the most efficient way to satisfy their needs. This is why it is possible for Milton Friedman to present "the technique of the market place" as a way of "co-ordinating the economic activities of millions" by means of "voluntary co-operation of individuals":

"Since the household always has the alternative of producing directly for itself, it need not enter into any exchange unless it benefits from it. Hence, no exchange will take place unless both parties do benefit from it. Co-operation is thereby achieved without coercion."

This passage is noteworthy because it explicates what is usually hidden as an implicit assumption in economics, namely that people have the possibility of reproducing themselves outside of the market. This is the assumption which makes the market appear as a sphere of freedom: not only are agents free to choose who they want to exchange their goods with, they are also free to choose whether they want to engage in exchange at all. This is why the market is usually understood as an institution providing individuals with opportunities, a concept "absolutely critical to the conventional understanding of the capitalist system".

These assumptions and abstractions form the basis of the highly idealised mathematical models so characteristic of contemporary economics. The transformation of economics into a discipline fixated on the development of formalised mathematical models has allowed it to present itself as "a nonideological discipline, aimed at providing positive, scientific answers to the policy questions". Economics has thus been able to live under the auspices of the natural sciences and present the economy as something regulated by transhistorical laws similar to the laws discovered by the natural sciences.

Søren Mau, Mute Compulsion: A Theory of the Economic Power of Capital

[blorbocedes]

Daniel is getting 2 mil for his role with Red Bull lol, iirc AMuS reported it + the 19 mil severance from mclaren, all in all its estimate he's making around 22 mil in total to sit out for 1 year 😬

this is why neoclassical economists were against unemployment benefits..........

[mostlysignssomeportents]

FTC vs surveillance pricing

Support me this summer on the Clarion Write-A-Thon and help raise money for the Clarion Science Fiction and Fantasy Writers' Workshop!

In the mystical cosmology of economics, "prices" are of transcendental significance, the means by which the living market knows and adapts itself, giving rise to "efficient" production and consumption.

At its most basic level, the metaphysics of pricing goes like this: if there is less of something for sale than people want to buy, the seller will raise the price until enough buyers drop out and demand equals supply. If the disappointed would-be buyers are sufficiently vocal about their plight, other sellers will enter the market (bankrolled by investors who sense an opportunity), causing supplies to increase and prices to fall until the system is in "equilibrium" – producing things as cheaply as possible in precisely the right quantities to meet demand. In the parlance of neoclassical economists, prices aren't "set": they are discovered.

In antitrust law, there are many sins, but they often boil down to "price setting." That is, if a company has enough "market power" that they can dictate prices to their customers, they are committing a crime and should be punished. This is such a bedrock of neoclassical economics that it's a tautology "market power" exists where companies can "set prices"; and to "set prices," you need "market power."

Prices are the blood cells of the market, shuttling nutrients (in the form of "information") around the sprawling colony organism composed of all the buyers, sellers, producers, consumers, intermediaries and other actors. Together, the components of this colony organism all act on the information contained in the "price signals" to pursue their own self-interest. Each self-interested action puts more information into the system, triggering more action. Together, price signals and the actions they evince eventually "discover" the price, an abstraction that is yanked out of the immaterial plane of pure ideas and into our grubby, physical world, causing mines to re-open, shipping containers and pipelines to spark to life, factories to retool, trucks to fan out across the nation, retailers to place ads and hoist SALE banners over their premises, and consumers to race to those displays and open their wallets.

When prices are "distorted," all of this comes to naught. During the notorious "socialist calculation debate" of 1920s Austria, right-wing archdukes of religious market fundamentalism, like Von Hayek and Von Mises, trounced their leftist opponents, arguing that the market was the only computational system capable of calculating how much of each thing should be made, where it should be sent, and how much it should be sold for.

Attempts to "plan" the economy – say, by subsidizing industries or limiting prices – may be well-intentioned, but they broke the market's computations and produced haywire swings of both over- and underproduction. Later, the USSR's planned economy did encounter these swings. These were sometimes very grave (famines that killed millions) and sometimes silly (periods when the only goods available in regional shops were forks, say, creating local bubbles in folk art made from forks).

Unplanned markets do this too. Most notoriously, capitalism has produced a vast oversupply of carbon-intensive goods and processes, and a huge undersupply of low-carbon alternatives, bringing the human civilization to the brink of collapse. Not only have capitalism's price signals failed to address this existential crisis to humans, it has also sown the seeds of its own ruin – the market computer's not going to be getting any "price signals" from people as they drown in floods or roast to death on sidewalks that deliver second-degree burns to anyone who touches them:

https://www.fastcompany.com/91151209/extreme-heat-southwest-phoenix-surface-burns-scorching-pavement-sidewalks-pets

For market true believers, these failures are just evidence that regulation is distorting markets, and that the answer is more unregulated markets to infuse the computer with more price signals. When it comes to carbon, the problem is that producers are "producing negative externalities" (that is, polluting and sticking us with the bill). If we can just get them to "internalize" those costs, they will become "economically rational" and switch to low-carbon alternatives.

That's the theory behind the creation and sale of carbon credits. Rather than ordering companies to stop risking civilizational collapse and mass extinction, we can incentivize them to do so by creating markets that reward clean tech and punish dirty practices. The buying and selling of carbon credits is supposed to create price signals reflecting the existential risk to the human race and the only habitable planet known to our species, which the market will then "bring into equilibrium."

Unfortunately, reality has a distinct and unfair leftist bias. Carbon credits are a market for lemons. The carbon credits you buy to "offset" your car or flight are apt to come from a forest that has already burned down, or that had already been put in a perpetual trust as a wildlife preserve and could never be logged:

https://pluralistic.net/2022/03/18/greshams-carbon-law/#papal-indulgences

Carbon credits produce the most perverse outcomes imaginable. For example, much of Tesla's profitability has been derived from the sale of carbon credits to the manufacturers of the dirtiest, most polluting SUVs on Earth; without those Tesla credits, those SUVs would have been too expensive to sell, and would not have existed:

https://pluralistic.net/2021/11/24/no-puedo-pagar-no-pagara/#Rat

What's more, carbon credits aren't part of an "all of the above" strategy that incorporates direct action to prevent our species downfall. These market solutions are incompatible with muscular direct action, and if we do credits, we can't do other stuff that would actually work:

https://pluralistic.net/2023/10/31/carbon-upsets/#big-tradeoff

Even though price signals have repeatedly proven themselves to be an insufficient mechanism for producing "efficient" or even "survivable," they remain the uppermost spiritual value in the capitalist pantheon. Even through the last 40 years of unrelenting assaults on antitrust and competition law, the one form of corporate power that has remained both formally and practically prohibited is "pricing power."

That's why the DoJ was able to block tech companies and major movie studios from secretly colluding to suppress their employees' wages, and why those employees were able to get huge sums out of their employers:

https://en.wikipedia.org/wiki/High-Tech_Employee_Antitrust_Litigation

It's also why the Big Six (now Big Five) publishers and Apple got into so much trouble for colluding to set a floor on the price of ebooks:

https://en.wikipedia.org/wiki/United_States_v._Apple_(2012)

When it comes to monopoly, even the most Bork-pilled, Manne-poisoned federal judges and agencies have taken a hard line on price-fixing, because "distortions" of prices make the market computer crash.

But despite this horror of price distortions, America's monopolists have found so many ways to manipulate prices. Last month, The American Prospect devoted an entire issue to the many ways that monopolies and cartels have rigged the prices we pay, pushing them higher and higher, even as our wages stagnated and credit became more expensive:

https://prospect.org/pricing

For example, there's the plague of junk fees (AKA "drip pricing," or, if you're competing to be first up against the wall come the revolution, "ancillary revenue"), everything from baggage fees from airlines to resort fees at hotels to the fee your landlord charges if you pay your rent by check, or by card, or in cash:

https://pluralistic.net/2024/06/07/drip-drip-drip/#drip-off

There's the fake transparency gambit, so beloved of America's hospitals:

https://pluralistic.net/2024/06/13/a-punch-in-the-guts/#hayek-pilled

The "greedflation" that saw grocery prices skyrocketing, which billionaire grocery plutes blamed on covid stimulus checks, even as they boasted to their shareholders about their pricing power:

https://prospect.org/economy/2024-06-12-war-in-the-aisles/

There's the the tens of billions the banks rake in with usurious interest rates, far in excess of the hikes to the central banks' prime rates (which are, in turn, justified in light of the supposed excesses of covid relief checks):

https://prospect.org/economy/2024-06-11-what-we-owe/

There are the scams that companies like Amazon pull with their user interfaces, tricking you into signing up for subscriptions or upsells, which they grandiosely term "dark patterns," but which are really just open fraud:

https://prospect.org/economy/2024-06-10-one-click-economy/

There are "surge fees," which are supposed to tempt more producers (e.g. Uber drivers) into the market when demand is high, but which are really just an excuse to gouge you – like when Wendy's threatens to surge-price its hamburgers:

https://prospect.org/economy/2024-06-07-urge-to-surge/

And then there's surveillance pricing, the most insidious and profitable way to jack up prices. At its core, surveillance pricing uses nonconsensually harvested private information to inform an algorithm that reprices the things you buy – from lattes to rent – in real-time:

https://pluralistic.net/2024/06/05/your-price-named/#privacy-first-again

Companies like Plexure – partially owned by McDonald's – boasts that it can use surveillance data to figure out what your payday is and then hike the price of the breakfast sandwich or after-work soda you buy every day.

Like every bad pricing practice, surveillance pricing has its origins in the aviation industry, which invested early on and heavily in spying on fliers to figure out how much they could each afford for their plane tickets and jacking up prices accordingly. Architects of these systems then went on to found companies like Realpage, a data-brokerage that helps landlords illegally collude to rig rent prices.

Algorithmic middlemen like Realpage and ATPCO – which coordinates price-fixing among the airlines – are what Dan Davies calls "accountability sinks." A cartel sends all its data to a separate third party, which then compares those prices and tells everyone how much to jack them up in order to screw us all:

https://profilebooks.com/work/the-unaccountability-machine/

These price-fixing middlemen are everywhere, and they predate the boom in commercial surveillance. For example, Agri-Stats has been helping meatpackers rig the price of meat for 40 years:

https://pluralistic.net/2023/10/04/dont-let-your-meat-loaf/#meaty-beaty-big-and-bouncy

But when you add commercial surveillance to algorithmic pricing, you get a hybrid more terrifying than any cocaine-sharks (or, indeed, meth-gators):

https://www.nbcnews.com/news/us-news/tennessee-police-warn-locals-not-flush-drugs-fear-meth-gators-n1030291

Apologists for these meth-gators insist that surveillance pricing's true purpose is to let companies offer discounts. A streaming service can't afford to offer $0.99 subscriptions to the poor because then all the rich people would stop paying $19.99. But with surveillance pricing, every customer gets a different price, titrated to their capacity to pay, and everyone wins.

But that's not how it cashes out in the real world. In the real world, rich people who get ripped off have the wherewithal to shop around, complain effectively to a state AG, or punish companies by taking their business elsewhere. Meanwhile, poor people aren't just cash-poor, they're also time-poor and political influence-poor.

When the dollar store duopoly forces all the mom-and-pop grocers in your town out of business with predatory pricing, and creating food deserts that only they serve, no one cares, because state AGs and politicians don't care about people who shop at dollar stores. Then, the dollar stores can collude with manufacturers to get shrunken "cheater sized" products that sell for a dollar, but cost double or triple the grocery store price by weight or quantity:

https://pluralistic.net/2023/03/27/walmarts-jackals/#cheater-sizes

Yes, fliers who seem to be flying on business (last-minute purchasers who don't have a Saturday stay) get charged more than people whose purchase makes them seem to be someone flying away for a vacation. But that's only because aviation prices haven't yet fully transitioned to surveillance pricing. If an airline can correctly calculate that you are taking a trip because you're a grad student who must attend a conference in order to secure a job, and if they know precisely how much room you have left on your credit card, they can charge you everything you can afford, to the cent.

Your ability to resist pricing power isn't merely a function of a company's market power – it's also a function of your political power. Poor people may have less to steal, but no one cares when they get robbed:

https://pluralistic.net/2024/07/19/martha-wright-reed/#capitalists-hate-capitalism

So surveillance pricing, supercharged by algorithms, represent a serious threat to "prices," which is the one thing that the econo-religious fundamentalists of the capitalist class value above all else. That makes surveillance pricing low-hanging fruit for regulatory enforcement: a bipartisan crime that has few champions on either side of the aisle.

Cannily, the FTC has just declared war on surveillance pricing, ordering eight key players in the industry (including capitalism's arch-villains, McKinsey and Jpmorgan Chase) to turn over data that can be used to prosecute them for price-fixing within 45 days:

https://www.ftc.gov/news-events/news/press-releases/2024/07/ftc-issues-orders-eight-companies-seeking-information-surveillance-pricing

As American Prospect editor-in-chief David Dayen notes in his article on the order, the FTC is doing what he and his journalistic partners couldn't: forcing these companies to cough up internal data:

https://prospect.org/economy/2024-07-24-ftc-opens-surveillance-pricing-inquiry/

This is important, and not just because of the wriggly critters the FTC will reveal as they use their powers to turn over this rock. Administrative agencies can't just do whatever they want. Long before the agencies were neutered by the Supreme Court, they had strict rules requiring them to gather evidence, solicit comment and counter-comment, and so on, before enacting any rules:

https://pluralistic.net/2022/10/18/administrative-competence/#i-know-stuff

Doubtless, the Supreme Court's Loper decision (which overturned "Chevron deference" and cut off the agencies' power to take actions that they don't have detailed, specific authorization to take) will embolden the surveillance pricing industry to take the FTC to court on this. It's hard to say whether the courts will find in the FTC's favor. Section 6(b) of the FTC Act clearly lets the FTC compel these disclosures as part of an enforcement action, but they can't start an enforcement action until they have evidence, and through the whole history of the FTC, these kinds of orders have been a common prelude to enforcement.

One thing this has going for it is that it is bipartisan: all five FTC commissioners, including both Republicans (including the Republican who votes against everything) voted in favor of it. Price gouging is the kind of easy-to-grasp corporate crime that everyone hates, irrespective of political tendency.

In the Prospect piece on Ticketmaster's pricing scam, Dayen and Groundwork's Lindsay Owens called this the "Age of Recoupment":

https://pluralistic.net/2024/06/03/aoi-aoi-oh/#concentrated-gains-vast-diffused-losses

For 40 years, neoclassical economics' focus on "consumer welfare" meant that companies could cheat and squeeze their workers and suppliers as hard as they wanted, so long as prices didn't go up. But after 40 years, there's nothing more to squeeze out of workers or suppliers, so it's time for the cartels to recoup by turning on us, their customers.

They believe – perhaps correctly – that they have amassed so much market power through mergers and lobbying that they can cross the single bright line in neoliberal economics' theory of antitrust: price-gouging. No matter how sincere the economics profession's worship of prices might be, it still might not trump companies that are too big to fail and thus too big to jail.

The FTC just took an important step in defense of all of our economic wellbeing, and it's a step that even the most right-wing economist should applaud. They're calling the question: "Do you really think that price-distortion is a cardinal sin? If so, you must back our play." Support me this summer on the Clarion Write-A-Thon and help raise money for the Clarion Science Fiction and Fantasy Writers' Workshop!

https://clarionwriteathon.com/members/profile.php?writerid=293388

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/07/24/gouging-the-all-seeing-eye/#i-spy

[talltalesfromeconman]

Initiation: How This All Works

Welcome to Tall Tales From Econ Man! This is a semi-satirical, semi-informative, and entirely unserious blog dedicated to taking Economics far beyond the bounds of ivory towers and neoclassical architecture.

The posts here are going to look more or less like this: I'm going to talk about some niche interest and explain the relevant details for you. Then, I'm going to ask a question that no sane person would think is worth asking. I am then going to answer those questions like an economist, explaining the steps I take along the way.

In short, I'm holding your hand and pulling you through a thunderstorm of bad ideas until we get out the other side. Your best bet to understanding what I mean by all of this is reading a shorter post here. Find a topic you're a little interested in, and see if you like answering silly questions as much as I do.

[berniesrevolution]

CATALYST JOURNAL

The democratic firm is at the heart of many models of market socialism. But a promotion of democracy within the firm calls for very specific institutional adjustments outside it, because its internal structure can be at odds with other goals of market socialism, like a desirable rate of growth and economic equality between workers. This paper lays out a model that seeks to marry firm-level democracy with macroeconomic growth and solidaristic wage policy.

In a socialist society, should workers have democratic control over their own workplaces? For many socialists, the answer is obvious: of course, almost by definition. But among economists who have developed proposals for how a socialist system might work, the answer is much more controversial. Some of the most well-known models do not involve democratic workplaces.

Workplace democracy is not a feature of one major vision published in Catalyst, John Roemer’s “sharing economy,” though workers share in firm profits.1 In his seminal earlier proposal, A Future for Socialism, Roemer explicitly rejected labor management, at least as part of socialism’s “first step,” and possibly even as part of an ideal vision.2 This is in line with the famous neoclassical socialist model of Oskar Lange, which also features labor markets and conventional employment relations.3

Workplace democracy is not a module that can be plugged into a socialist model without affecting the rest of it. It is tangled up with questions of finance and labor mobility. It brings challenges around risk, income distribution, and efficiency. Activity at any workplace must be coordinated within the broader division of labor across the whole economy. Roemer’s agnostic position is understandable:

My preference for the managerial proposals is based on conservatism, namely, that it is best to change features one at a time, if possible. The biological metaphor is apt: an organism with one mutation is more likely to survive than one in which two mutations occur simultaneously. I think it is more important to change the private nature of the financing of firms than the management structure as the first step.4

For many of us, however, workplace democracy is not to be given up lightly. It is central to the other proposal for “Socialism for Realists” published in Catalyst, by Sam Gindin.5 Gindin presents an appealing model, and the present essay is broadly in line with his suggestions. But he does not respond there to the problems identified by skeptics of workplace democracy — sympathetic or otherwise.

Those problems are real. Their root is the fact that modern standards of living depend on a vast and complex division of labor, in which the individual workplace is a small node. These nodes must be coordinated to meet social needs efficiently, but if each workplace must play a part, what is the scope for local democratic decision-making? Any system must constrain the choices made within the workplace, and structure those choices with incentives to bring local interests in line with broader social needs. That is easier said than done. The critics have rightly pointed out serious flaws in some of the standard models, and this has convinced many that worker management is simply unviable.6

The aim of this essay is to face the problems squarely and suggest a set of institutions that can plausibly cope with them — a model that is hopefully appealing, meeting socialist aspirations for equality, democracy, sustainability, care, and personal freedom. The problems cannot be resolved simply at the level of the workplace — they are systemic problems and so require the whole system to be built around them. In particular, workplace democracy has fundamental implications for finance, the labor market, and the relationship between the public sector and the sector of commodity-producing, democratic firms. This essay therefore gives a lot of room to the broader systemic architecture before focusing on the democratic firm itself.

The proposed system includes a large market sector of commodity-producing firms, as in both Gindin’s and Roemer’s models, as well as other prominent socialist proposals of recent decades.7 As Gindin argued, planning and markets are not opposites: the grid of prices and incentives emerging from and organizing market activity is a vital source of information and tools for planners. But having accepted a substantial role for markets, socialists must resolve their tensions with egalitarianism and democracy. Roemer’s proposals concentrate on the egalitarian side and reserve democracy to the state, and so they have a more limited set of tensions to resolve.

The next section discusses the entangled relationship between the commodity-producing private sector and the noncommodified public sector. It also explains the ways in which a democratic government can engage in effective planning and policy in and through the market sector. In addition to the public agencies and policy tools familiar from capitalism, the state will have two powerful sites for intervention: a public banking system, and a labor board setting benchmark wages and conditions.

There are many possibilities to expand public agency in new ways, as well as facilitating new kinds of community provisioning. But my attention in the rest of the essay is on the special problems of reconciling efficiency and democracy in socialist commodity production. Efficiency is sometimes seen as a conservative goal, but it simply means avoiding the waste of resources, including people’s time and effort. It need not imply the pursuit of maximum output; efficiency is just as important in maximizing leisure and minimizing environmental impacts for a given output. Waste and misallocation played a big part in the problems of state socialism in the twentieth century, and the social sustainability of any future socialism depends on a reasonable degree of efficiency.

I explain the core problems raised by economists about collective firms: the so-called horizon and common property problems, and related problems of risk management, that can keep democratic firms from investing and employing members in a way that efficiently meets social needs. In response, I propose treating investment as a partnership between public banks and democratic firms, allowing for systemically rational investment decisions and an appropriate spreading of risks and returns.

There is something to be said for Roemer’s caution in presenting a minimum viable socialism. But there is also something to be said for proposals that push further down the road to utopia, while trying not to actually be utopian by ignoring predictable problems. By wrestling with an expanded set of problems, they build the plausibility of an attractive and viable socialist alternative. We can never, of course, know if we have correctly anticipated all the problems a real program would run into — there will always be “unknown unknowns.” But by giving at least possible answers to the “known unknowns,” we make an appealing socialist alternative seem more conceivable. The point of sketching models, as Gindin stresses, is not to write recipes for the cookshops of the future — nothing would force them to use our recipes if they no longer suit the tastes or solve the problems of the time. It is to convince people in the present that there are workable recipes that make socialism worth pursuing.8

THE STRUCTURE OF THE ECONOMY

The proposed economic system, like capitalism, is mixed. “Private” and “public” are perhaps the wrong words here, given they are even more entangled under socialism than they already are in capitalism, but they are convenient. The division is between a “private” commodity-producing sector where costs are covered by market sales, and a “public” noncommodified sector operating with publicly allocated funds. The noncommodified sector includes the government bureaucracy and public agencies under central control, but it may also include a variety of community agencies with considerable autonomy, though still financed by the public purse.

A firm in the commodity-producing sector is democratic in two ways. First, “management and administrative structure are chosen by the firm’s labor force using a democratic political process.”9 Second, each worker receives a share of the firm’s residual income.10 They are firms in that they are autonomous commodity-producing entities that must cover costs with revenues and meet their contractual payment obligations.

A variety of firm constitutions are possible, but the standard for a midsize to large firm would involve representative democracy, with elected directors appointing and monitoring administrators who do day-to-day management. This could be supplemented by committees and referenda as needed, but routine administration is best handled by specialist professional workers with expertise in accounting, logistics, and so on. Democracy does its job by making sure the administrators are ultimately answerable to their colleagues, and that working conditions and broad questions of strategy must have broad approval.

Financial viability constrains the democratic firm, as it does the capitalist firm. The need to cover costs and meet cash flow obligations, while competing with other firms, is what ties the firm into the broader division of labor across the economy. It ensures that it is using social resources reasonably efficiently to meet people’s needs and wants. Like capitalist firms, democratic firms receive revenue from selling their output and pay for the inputs used in producing that output. They require investment: some inputs must be paid for long before receipt of the revenue that covers those costs. This investment must be financed in some way. As with capitalist firms, their future revenues and costs are uncertain to some degree. Market demand and prices change over time. They must make investment and production decisions in the face of uncertainty and so face financial risks.

But in a fundamental way, democratic firms are very different from capitalist firms. Capitalist firms are ultimately controlled by their owners, who are also the claimants to the residual income, entitled to what is left from earnings after suppliers, workers, and creditors have been paid. Labor-managed firms, on the other hand, are ultimately controlled by their workers, who are also the residual claimants.

It might seem that this would be a simple change: ownership and all that goes with it is transferred from one group to another. But there are fundamental differences between these groups and their involvement in the firm that give rise to important side effects. The differences bring serious problems that any viable system of democratic enterprise must resolve. Before turning to these problems, I first explain why a socialist system would involve markets and commodity production at all, and I discuss the overall setup of the proposed model, including the role of the noncommodified public sector and the mechanisms democratic state planning and policy will have to work through the commodified sector.

WHY MARKETS?

The idea of a socialist “private sector” may seem oxymoronic, but it differs from capitalist private enterprise in three ways: (1) personal income and wealth are far more evenly distributed, (2) financial claims on firms are indirect, via a public banking system, and (3) firms are run democratically by their workers. Some of the traditional socialist objection to markets comes from their association with the wide inequalities of capitalism. If income is unevenly distributed, they give some people much more control over those ends than others. If incomes are reasonably equal, this objection no longer applies — “one dollar, one vote” becomes more democratic.11 Another worry is that market logics would lead socialist firms to simply reproduce the alienation of capitalism, with competition enforcing cost containment that would amount to self-exploitation. This is why workplace democracy is so important, to ensure that people are able to voice preferences about the pace and conditions of their work. Further, in the system proposed here, firms would have to meet robust benchmark wages and conditions determined centrally, channeling competition away from the “low road” of a race to the bottom with low wages, high work intensity, or both.

External discipline is not something imposed only by markets. In any division of labor, there must be limits to the self-management of each individual unit, because they are all interdependent. Workers produce for others — either directly making consumer goods and services or making inputs for other production processes. A centrally planned economy also faces the underlying issue of interdependence and would need some other way of reconciling the operations of the countless production units with one another and with people’s desires as consumers. Constraints would need to be placed around how any workplace could arrange itself — and rightly so, since the workers there are using part of the social stock of wealth in their work and will make claims on output elsewhere for their own consumption. The proposal here provides multiple places to manage the constraints openly and democratically — at firm and more central levels — instead of fudging them. The “soft budget constraints” identified by János Kornai as a critical weakness of planned economies involved an inability to deal consistently in reconciling the preferences of work unit managers with the broader division of labor.12

Market pricing and commodity production are not something socialists must reluctantly accept because of the flaws of planning. In their proper place, and in a context of egalitarian incomes and workplace democracy, they are in fact a good vehicle for democratic planning.

It is not easy to think of a better way for people to signal what should be produced than actual consumer markets. We have a monetary income, we are faced with a set of prices quoted to us by sellers, and we choose how to divide our spending among all the things available. If we are to choose what to consume at all, the trade-offs inherent in using scarce resources must be presented to us in some way, so there will be some form of relative price and budget. It is not only that it would be cumbersome for planners to get choices from us in some other way but that we do not know ourselves the answer to questions about how many coffees we would be prepared to give up for so much extra gasoline next year. This is because our demand for any one product is bound up with our demand for other ones. The amount of coffee people would choose to consume not only depends on its own price but on many other prices, too. It would depend not only on prices of substitutes like tea or Red Bull, and complements like cigarettes and cake, but also on seemingly unrelated commodities like gasoline and housing rent — since everything must be paid for from the same budget.

(Continue Reading)

[gregmh-blog]

Who was Harold Hotelling?

Who was Harold Hotelling? https://ift.tt/0PHlODN Who was Harold Hotelling and what did he contribute to the field of economics? A paper by Gaspard et al. (2024) in the Journal of Economics Literature provides some background on his life, his research and pros and cons of his research contributions. Today I summarize some of his key contributions to the field of economics. Spatial Competition Model (Hotelling Law) Hotelling’s most famous contribution is likely his 1929 paper (Hotelling 1929) on spatial competition, which introduced what became known as “Hotelling’s law” or the principle of minimum differentiation. This model analyzed competition between two firms (i.e., a duopoly) in a linear market and showed how the two firms tended to not only locate close to each other in the center, but also minimize their product differentiation. Why do firms locate next to each other? It would be more socially beneficial if the shops separated themselves and moved to one quarter of the way along the street from each end; in this scenario each shop would still draw half the customers but the average customers travel distance to the shop would be shorter. If this occurred, however, each shop would have an incentive to locate centrally to capture more (i.e., >50%) of the market. When there are niche products, however, the firm are more likely to position themselves in different sections of the street. This is particularly true when consumers are heterogenous over tastes. Resource Economics (Hotelling’s rule) In 1931, Hotelling published an influential paper (Hotelling 1931) on the economics of exhaustible resources, which established “Hotelling’s rule”. This rule states that to efficiently exploitat a non-renewable and non-augmentable resource, the percentage change in net-price per unit of time should equal the discount rate in order to maximize the present value of the resource capital over the extraction period. Hotelling argued that policymakers should tax mining profits for resource conservation; however, he also argued that private monopolies (under these suitable taxation policies) would exhaust resources slower than public monopolies. Production Theory (Hotelling’s Lemma) Hotelling’s 1932 paper reworked production theory into a choice-theoretic framework based on profit maximization. This helped set the foundations for the modern neoclassical approach to the theory of the firm. Wikipedia summarizes this finding as follows: The rate of an increase in maximized profits with respect to a price increase is equal to the net supply of the good. In other words, if the firm makes its choices to maximize profits, then the choices can be recovered from the knowledge of the maximum profit function. Hotelling’s lemma” is still commonly used in microeconomics. Welfare Economics His 1938 presidential address to the Econometric Society (Hotelling 1938) introduced the concept of marginal cost pricing as a general welfare proposition.  The History of Economic Thought website states that: Roughly, that economic efficiency is achieved if every good is produced and priced at marginal cost. This contributed to the development of welfare economics and the fundamental theorems of welfare economics in general equilibrium theory. To learn more about Harold Hotelling, do read the full Gaspard et al. (2024) article. via Healthcare Economist https://ift.tt/MIzOPVF September 09, 2024 at 07:11PM

[edwad]

do neoclassical economists think markets are a law of nature

no not really. they might describe their operation through analogy with natural physical laws (the language of equilibrium etc) but that's not the same as suggesting the markets themselves are natural mechanisms even if they have something which we could call a law-like nature (in the sense that we can talk about the "nature" of a thing in terms of its peculiar characteristics without necessarily suggesting that it is a wholly natural phenomenon in the typical sense, eg it is the nature of performing a particular task that it will be difficult etc).

you might still find economists who accept some silly free market anthropology where humans have the innate smithian propensity to truck, barter, and exchange, so that markets are the natural result of human development or whatever, but this isn't theoretically necessary and, regardless, doesn't automatically lend itself to a naturalization of the complex markets which dominate the globe today. in fact, much of the turn toward the marginalism which animated the early neoclassical theory was specifically oriented away from the naturalizations common to smith et al and toward an understanding of markets as artificial human institutions which ought to be designed and maintained with care in order to generate the greatest utility for all economic actors involved.

this last point is one of the reasons why i've offered the provocation that if marx's critique of political economy was, in some sense, a failure (which, for all kinds of reasons and to varying extents we have to admit it was, even if only because it was left unfinished), then the closest thing to a proper, fully consummated CoPE would be marginalism itself. this also means that large parts of marx's work are incapable of adequately dealing with marginalist thinking, although not for the reasons usually assumed -- namely that marginalism post-dates marx so he had no way of grappling with it, which isn't entirely true. instead, marx's work is unable to handle marginalism at its core or at its strongest (as an immanent critique ought to) because the latter does not rely on the assumptions that marx ascribes to so-called classical economics which is his chief object, and in fact rose to prominence specifically to overthrow many of the same undesirable elements in economic thinking which marx was going after (and *not* because they were simply scared of the theoretical rigor of marx's relatively obscure work, despite what the marxists might tell you)

[racefortheironthrone]

i know this isn't really relavant to your last posts but i was wondering, did marx mark a distinction between land and capital or did he follow the later neoclassical view that land is a form of capital. did marxists do the same or diverge on their view of the factors of production?

After consulting with a Marxist political economist, I can say that Mar definitely viewed land as a form of capital.

Why?

[rgmuskan]

Neoclassical Economics Made Simple: Understanding Its Significance — Nishant Verma 

Neoclassical economics is a bit like a map for figuring out how money and buying things fit together. Imagine it’s a special tool that helps us understand why people decide to buy stuff and how the places where we shop, known as markets, actually work. Now, in this article, we’re going to take this economics stuff and make it super easy to understand. Plus, we’ll explain why it’s so important for making sense of the world around us.

Think of neoclassical economists as a user manual for the economy. It’s like having the inside scoop on why people buy the things they do and how the whole buying and selling dance happens in the marketplace. If we break down these ideas step by step, it’s like putting together a puzzle where all the pieces fit perfectly.

To Read More about Neoclassical economics visit Nishant Verma Website.