Dilemmas in Economic Theory: Persisting Foundational Problems of Microeconomics

Contents......Page 8
1. Introduction: The Transformation of Economic Theory......Page 14
1.1 Three transitions......Page 15
1.2 The timing of the transitions......Page 18
1.3 Theory versus practice......Page 19
1.4 Where early neoclassical theory fails......Page 21
1.5 Interest theory: a further blindspot......Page 22
1.6 Why the history of economic theory?......Page 24
2.1 Introduction and overview......Page 27
2.2 Marginal productivity theory......Page 30
2.3 Initial criticisms of marginal productivity theory......Page 31
2.4 Nondifferentiable production and indeterminacy......Page 33
2.5 Alternatives to differentiable production......Page 34
2.6 Fixed-coefficients theory and its critics......Page 36
2.7 Long-run theories......Page 41
2.8 Factor pricing in contemporary theory......Page 48
2.9 Factor-price indeterminacy revisited: Sraffa and general equilibrium theory......Page 57
2.10 Conclusion......Page 60
Appendix......Page 61
3.1 Overview......Page 63
3.2 Factor pricing in classical economics......Page 64
3.3 The wage fund......Page 66
3.4 J.S. Mill and elastic factor supply......Page 70
3.5 Between the wage fund and marginal productivity......Page 72
3.6 The emergence of marginal productivity......Page 75
3.7 Conclusion......Page 76
4.1 Introduction......Page 77
4.2 Demand analysis and neoclassical economics......Page 79
4.3 Hedonism and its advantages......Page 83
4.4 Early neoclassical accounts of deliberation......Page 87
4.5 Ordinal preference theory......Page 89
4.6 Ordinalism versus cardinalism......Page 93
4.7 Diminishing marginal utility and psychological concavity......Page 96
4.8 Should assumptions be placed only on preferences?......Page 98
4.9 Convexity versus diminishing marginal utility......Page 104
4.10 Transitivity and completeness......Page 107
4.11 Conclusions......Page 115
4.12 Postscript: choice under uncertainty......Page 118
5. Historical Issues in Preference Theory: Cardinality and the Transition to Ordinalism......Page 121
5.1 Cardinality and cardinal measurability......Page 122
5.2 Cardinality based on pleasure......Page 123
5.3 The end of hedonism......Page 126
5.4 Fisher: non-hedonistic cardinality......Page 128
5.5 The move to ordinalism......Page 132
6.1 Introduction and overview......Page 134
6.2 Economic utilitarianism......Page 136
6.3 Early neoclassical definitions of efficiency......Page 142
6.4 The rejection of utilitarianism......Page 145
6.5 Bergson-Samuelson social welfare functions......Page 147
6.5.1 An example: Harsanyi social welfare functions......Page 149
6.6 Compensation criteria......Page 151
6.6.1 Hicksian variations: cost-benefit analysis......Page 153
6.6.2 Output comparisons......Page 156
6.7 The postwar consensus......Page 161
6.8 Problems with Pareto optimality......Page 164
6.9 Policy paralysis: a social-choice example......Page 168
6.10 Conclusion......Page 173
7.1 Introduction......Page 175
7.2 The classical position......Page 178
7.3 Early neoclassical interest rate theory......Page 181
7.4 Contemporary interest rate theory and the impatience assumption......Page 186
7.5 Technological arguments for a positive interest rate......Page 191
7.6 Land and interest......Page 198
7.7 Conclusion......Page 199
Appendix......Page 200
8.1 Anomaly versus norm in theoretical models......Page 202
8.2 Form and content......Page 203
References......Page 204
B......Page 214
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G......Page 216
I......Page 217
M......Page 218
P......Page 219
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Z......Page 222