Political Economy and Capitalism: Some Essays in Economic Tradition by Dobb Maurice

Author:Dobb, Maurice [Dobb, Maurice]
Language: eng
Format: epub
Tags: Marxisme, Economie
Publisher: Taylor and Francis
Published: 2012-03-21T23:00:00+00:00

Chapter VI

Concerning Frictions and Expectations: Certain Recent Tendencies in Economic Theory

ONE of the marked features of economic thought in recent years, and in particular in the last decade, has been a decline in the older dogmatism, a quickening of scepticism and a reawakening of controversy. What a few years back was treated as settled doctrine, requiring only refinement of its implications and application to special problems, is to-day questioned in its basic assumptions. Systems of thought whose final shape was regarded as perfected, save for a few trifling elaborations, are thrown back into the melting-pot. In these movements of thought it is not hard to see reflected the startling events of the real world of affairs in the last two decades. On its practical side this deepening of scepticism has consisted in the virtual break-up of laissez-faire as a body of doctrine: one might almost say that it is of this that the shift of doctrine has essentially consisted— a change which has followed and not preceded the decline of laissez-faire in the real world. To-day this doctrine, at least in its traditional form, retains relatively few, if noteworthy, defenders. But it can hardly be said that where the old faith and certainty has been supplanted much beside confusion and eclecticism at present reign.

These recent shifts of perspective mainly centre, I believe, in two significant modifications of traditional assumptions. Both of these seem to be connected with the characteristics of a new age of monopoly, the one directly, the other only indirectly. The first of these consists in a criticism, or at least reconsideration, of the traditional concept of competition and an attempt to restate the conditions of equilibrium in terms of monopoly or the presence of monopolistic elements. The second consists in an emphasis on the qualifications which have to be introduced into traditional equilibrium-analysis— into the statement of economic laws and tendencies— in situations where the expectations of individuals can exercise a significant influence on events. The traditional doctrine of laissez-faire , as we have seen, was based on the harmonious and self-regulating effect of competition, whether this was stated in the form of the classical law of cost or according to the subjective theory of value in the form of the equality of marginal utility and cost. If, in fact, not this but a different equilibrium rules, the results of actual laissez-faire must be different from those which have been imagined. Again, the essence of the classical theory had been that what ultimately occurred was independent of the subjective wishes or expectations of the individual entrepreneur. If this was not so, and subjective expectations became an independent determining factor in the result, the “invisible hand” was to that extent thwarted, and again the outcome of actual laissez-faire must be different from what had previously been deduced.

Both innovations were concerned with the significance of factors which are usually referred to as “frictions”. Traditionally it had been admitted that where competition was displaced by absolute monopoly, or some-thing approaching

Download

Copyright Disclaimer:
This site does not store any files on its server. We only index and link to content provided by other sites. Please contact the content providers to delete copyright contents if any and email us, we'll remove relevant links or contents immediately.