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A Sense of Irrelevance

  • Amos WitztumEmail author
Chapter

Abstract

Synopsis : After exploring the logical pitfalls which raise question marks over the validity of economics’ paradigmatic core as a theory of social organisation, we will explore in this chapter some of its relevance. For a theory to be relevant, it must capture the essence of the world both about which it makes pronouncements and into which it feeds back. We noticed that for the system of competitive decentralised decision-making to deliver a solution to the economic problem which is also universal and ethically neutral, competition (in its perfect form) must be complete and total. All economic activities must be conducted through perfectly competitive markets that will attach a competitive price (which reflects the true social cost) to all goods so that an allocation can emerge which is both productive and allocative efficient (and, thus, a solution to the economic problem). The absence of such completeness may produce an impression of competition but not a solution to the economic problem with the properties of universality and ethical neutrality . Therefore, we set out in this chapter to explore some stylised facts about the world which may give us the confidence that the model we created, in spite of its logical difficulties, is nevertheless relevant. There are two basic areas in which the question regarding the extent (and limitation) of competitive practices come to the fore. The first is the role of government in the economy and the second the ability of individuals to solve by themselves their economic problem through market interactions and without a need for collective intervention.

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Copyright information

© The Author(s) 2019

Authors and Affiliations

  1. 1.Centre for Philosophy of Natural and Social SciencesLondon School of Economics and Political SciencesLondonUK

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