Sunday, October 23, 2011

The Problem with "The Problem of Social Cost" -- revised

I've completed a second draft of "The Problem with 'The Problem of Social Cost'" and have posted the whole article (sans bibliography) as a Scribd embed. My earlier post, The Prince and the Pauper serves as a teaser for this new piece, which substantially reworks and rearranges some of the material I previously serialized on Ecological Headstand, starting about a month ago.

I'd like to say a few words about what I'm doing and why I'm doing it. To quote Ronald Coase, what is wrong with economics -- both in the world and in the academy -- is not due to "a few slips in analysis. It stems from basic defects in the current approach to problems of welfare economics."

I doubt, though, that Coase would endorse the rest of my argument. Those defects are not simple flaws of method or approach. They are symptoms either of pathological neurosis or cynical ideological deception. The system is either sick or evil. Period. My historical analysis allows for either possibility and I'm content to leave the question undecided.

What I don't find plausible, though, is simple mistake or misunderstanding. There is too much repetition of falsehood and concealment to credit "innocent" error. The "defects in the current approach" are either deliberate or they are compulsive. I say this partly from conviction and partly as a challenge to academic economists: "show me I'm wrong."

People who know about the Sandwichman's "obsession" may be surprised to find that the lump-of-labor fantasy doesn't appear anywhere in the draft. There's a simple explanation. It doesn't have to. The bogus fallacy claim was a symptom, a tic that pointed to something out of place. In "The Problem with 'The Problem of Social Cost'" I have identified what that missing something is that was out place and restored it to the narrative.


  1. Mr. Walker/Sandwichman,

    just wanted to say, I read yr blog regularly; as an econ student ( fairly autodidactic one), i really appreciate yr approach. read a good bit of lefty/heterodox/marxish economics in addition to the neoclassical stuff i read for school, but it's just really interesting to read someone reading some historical context back into this stuff, especially into the roots of the theory. also fascinating to read neoclassical/marginalist types who had their doubts about their own school. anyways, just thought i'd drop you a line.