Cutting the Gordian Knot of GE Theory

Cutting the Gordian Knot of GE Theory

Steve Reglar (2005) writes:

As a tool of capitalist hegemony the doctrine of general equilibrium is very useful. It assumes that the normal condition of society is for the state to play as little a role in economic life as possible, because the market is part of human nature and the most efficient form of economic organization. The theory, therefore, has a role in legitimizing capitalist hegemony.Review of Political Economy1) One's value scale is totally (linearly) ordered:

i) Transitive; p ≤ q and q ≤ r imply p ≤ r

ii) Reflexive; p ≤ p

iii) Anti-Symmetric; p ≤ q and q ≤ p imply p = q

iv) Total; p ≤ q or q ≤ p

2) Marginal (diminishing) utility, u(s), is such that:

i) It is independent of first-unit demand.

ii) It is negative monotonic; that is, u'(s) < 0.

iii) The integral of u(s) from zero to infinity is finite.

3) First-unit demand conforms to proportionate effect:

i) Value changes each day by a proportion (called 1+εj, with j denoting
the day), of the previous day's value.

ii) In the long run, the εj's may be considered random as they are not
directly related to each other nor are they uniquely a function of
value.

iii) The εj's are taken from an unspecified distribution with a finite
mean and a non-zero, finite variance.


REFERENCES

Aguilar, Victor. 1999. Axiomatic Theory of EconomicsPolicy OptionsEssays in Positive Economics. Chicago, IL: University of Chicago Press.

Keen, Steve. 2001. Debunking Economicshttp://www.elequity.com/contego/pdfbooks/IncorporatingAmericanMinds.pdfSSRN-The Politics, Mathematics and Morality of Economics: A Review Essay on Robert Nelson`s Economics as Religion by Cristobal YoungReview of Political Economy. 19 ( 1): 81-113 EconPapers: A Comprehensive Incentives Analysis of the Potential Performance of Market Socialism