Jennifer Burns: evaluation

Transcript context

…Some of these ideas are things we would pick up at a microeconomics class. Oh yes, this is still out there. This is the basic foundation of microeconomics, marginal analysis, and so- … of microeconomics, marginal analysis. And so, in the German-speaking intellectual tradition, this is the root of Austrian economics and people picking up the marginal revolution in the German-speaking lands are opposed to the historicists who are thinking in a more evolutionary way about how societies grow and change and they have a vision of economic ideas as applying differently to different types of social arrangements. Where the marginalists, remember, inspired by physics and this is a set of natural laws that applies anywhere to any human society. So, that’s his first really big fissure that we’ll see again and again. Are you historically minded? Do certain traits of economic life in here adhere and become expressed in certain types of societies or are there universal economic laws that flow through any type of society? So, that’s a juncture, a break and so marginalism … First, people start using, really, geometry to graph things but marginalism is also opening up to the possibility of calculus and the possibility of creating models. But at that point in time, late 19th century, a model is something like a physicist does. Think of an inclined plane and how fast does the ball roll from one to the other, it’s a physical representation of the world and eventually economists will start to create mathematical representations of the world but we’re not quite there yet. So, we’re late 19th century and we have this fissure, we have this introduction of marginal analysis that marks the juncture from classical economics to economics. So, let’s say now we have economics but we still have this fissure between historical thinking and let’s call it natural law thinking, that’s not quite right, but physical laws versus contingency. And then, in the United States, this ends up mapping onto debates about capitalism and so more historically minded economists tend to be interested in the progressive movement which is invested in taming and regulating industrial capitalism and changing its excesses, factory safety laws, wage laws, working conditions laws. Yet, in general, American economists all use marginal analysis just in different ways. The ones who are more drawn to marginal analysis become known as neoclassical economists. They’re neoclassical, the neo is because they’re using marginal analysis, the classical is because they don’t think we need to change the way the economy operates or the government operates, they’re not progressive. Whereas the progressives are saying things like we need to use social control. The state and the people, collectively and democratically, need to control the way economics unfolds and make sure things are fair and equal. ives are saying things like we need to use social control. The state and the people, collectively and democratically, need to control the way economics unfolds and make sure things are fair and equal. So, that school of thought becomes known as institutional economics in the United States by the 20th century. So, it’s part of the progressive movement late 19th century, into the 20th century, it really becomes institutional economics and it’s quite dominant and the neoclassical economists are still there but they’re very much a minority. And Frank Knight, Milton Friedman’s teacher, is one of the minority neoclassical economists and the institutionalists are much more progressive still.…

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