书评 For the Theory of Price by George Stigler
Classical is classical, April 10, 2000
Reviewer: A reader
It is amazing how this book is still valuable and such a few people know that. This is a book which every undergraduate student of Economics (actually every economist) should know, because it is pretty well written and it gives all the basic intuition for Microeconomics in a very good humour style - something I thought hardly possible in this field. It starts with the consumer theory and then goes through the firm theory. Many things we learn from Varian and Pindyck and Rubinfeld are there. I recommend this book mainly because you can learn very difficult things having fun, and the level of formality is very appropriate even for those who do not have a first year calculus (the tough stuff is in the appendix). I regret not having known this book before.
书评 For Microeconomic Analysis by H.R.Varian
Mathematized ideology trying to pass as science, May 15, 2002
Maybe the clearest, most readable description of neo-classical economic belief. I used it to to read about utility (after reading Samuelson's papers), also to learn about the (utility-free) capital asset pricing model, which is presented via a simple derivation. A description of Scarf's counterexample in 'equilibrium dynamics' is also presented, if too sketchy. One would have liked to see Radner's '67 paper discussed here as well, and the proof that even if textbook demand-price, supply-price curves existed individually, the aggregate curves could be anything, including no curve at all, just a scatter of points.
Osborne showed earlier that the textbook supply-demand curves do not exist empirically and explained quanlitatively why they do not exist in the individual case. I explained quantitatively in a paper 'The Futility of Utility' (Physica A, 2000) why such curves do not due to nonintegrability of the underlying dynamics of production, thereby resolving Mirowski's thesis in an unexpected way.
So what's the problem? The theory is presented as if it would qualify as an internal logic system, not as science, it's presented as if data did not exist (theory without data, whereas econometrics is data without theory). There is essentially no comparison with empirical data in this text, and there is a good reason for that: all comparisons with real markets show that the utility-based theory is totally wrong.
Not only is the standard assumption of 'equilibrium'(and the implicit assumption of stability) not a good zeroth order approximation to markets, these ideas do not even provide a BAD zeroth order approximation to market dynamics, which markets are totally unstable and far from equilibrium in every known case. The retort of the academic economists (the empiricist Greenspan does not belong to that school) that 'we are only trying to understand the ideal case' is so far off the mark as to be ridiculous.
One might compare neo-classical economic theory with Aristotelian 'physics', except that the latter has one advantage: it does take into account a (wrong) qualitative description of air resistance, whereas utility maximization describes nothing that happens in real markets.
To the claim that, 'but we need utility maximization to derive the CAPM' (which also does not describe real markets!), I reply, nonsense! ... . For the story of how this state of affairs came to be, see Mirowski's 'Machine Dreams'.
