Mainstream Economics

Topics: Economics, Institution, Economy Pages: 3 (910 words) Published: February 8, 2011
Mainstream EconomicsOur Alternative Stance
What Many Mainstream Economists BelieveEconomics from an Alternative Perspective As a discipline, economics is defined in terms of a set of specific core assumptions and analytical techniques. As the general "science of choice" economics is applied to any living organism, and it is not restricted to human, market, monetary or business phenomena.Economics is defined in terms of the scientific study of a real object – the economy. The economy is that part of human society concerned with the production and distribution of wealth. Because of the alleged power of these core assumptions and analytical techniques, economists do not need to learn much from other disciplines. Instead they apply these choice-theoretic assumptions and analytical techniques to other zones of enquiry.Understanding the economy requires an appreciation of the psychological and other mechanisms behind human decision-making. Other disciplines such as sociology, politics and history provide vital insights on how economic institutions work. The best way of understanding a phenomenon is to build a model of it, by simplifying assumptions.Models can be useful but their value is limited, especially when the phenomena are highly complex. Appropriate simplification is a matter of critical enquiry and experiment. A rich knowledge and understanding of economic and institutional history is often of greater value than a mathematical model. The principal purpose of any model is to make correct predictions With complex phenomena and non-linear interactions, the possibilities for prediction are limited. The primary purpose of any science is causal explanation. Precision in a mathematical sense is a supreme virtue. But precision over central concepts such as “market” and “firm” is inessential.Conceptual precision is no less important than mathematical precision. But no science can be absolutely precise. Being roughly right is better than being precisely wrong....
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