File spoon-archives/bhaskar.archive/bhaskar_1996/96-05-20.182, message 129

Date:          Thu, 11 Apr 1996 10:31:51 GMT-700
Subject:       Re: Returned mail: Host unknown (Name server: list.village.


Thank you for your perceptive remarks about "the importance of a 
critical realist ontology for economics."  I wholeheartedly agree 
with you except that your comments about time might be a little 
misleading. You wrote:

> The mainstream economic theory (neo-classical economics) the 
> conception of human agency is one of "rational" economic agents 
> acting in "logical" time.  That is to say that human action is 
> treated as mechanical and ideally rational; and social struture is 
> forever enduring, predictable, and consequently closed.

I agree. In fact the agent in Neoclassical economics is no agent at 
all, because this agent has no power to exert any influence upon 
restrictions he faces with. You are also right in that this agent 
acts in "logical" time. However, this sounds like implying that an 
alternative conception (based upon critical realism) should discard 
the idea of "logical time". As you say,

> In an open-world, where time is historical (forward) and not logical 
> (forward and backward); the ontological commitment has great implications.
> The (neo-classical) conception of human agency in a closed soical world 
> in logical time, (for one example) has the tendency of blaming 
> individuals for dismal economic performance -- rather than 
> understanding that there exists certain structural tendencies 
> (understood as a duality between structure and agency) that accounts 
> for much of the social phenonomea that we observe or understand. 

There is no question about that time is "historical" in 
an open world. But once again we should distinguish between the world 
itself and our knowledge or ways of acquiring knowledge about this 
world (I mean, of course, that we should avoid "epistemic fallacy"). 
In regard to time, I believe that even the world itself is constituted 
through real time, the analysis might require to work with "logical" 
time. Let me give two example from Marx (who, allegedly, is committed 
to an implicit critical realist ontology).

First example has to do with his Labor Theory of Value (LTV). It seems 
to me that this value theory, like its Neoclassical counterpart, 
adopts a "logical" or "reversible" time. In other words, LTV is as 
static as Neoclassical (subjective) value theory. For example, in 
Capital vol. III, ch. 9, Marx talks about prices of production: the 
price of production of a single firm includes rate of profit, 
but this rate of profit is the general (uniform) rate of profit which 
is prevalent throughout the economy; it is not the rate of profit of 
the single firm. In the next chapter, Marx explains the equalization 
of the general rate of profit through competition. It is obvious that 
this equalization is a process in "real" (i.e. historical) time; 
however, analytically, this process must be complete for the 
calculation of prices of production, and hence the transformation of 
values into prices (prices of production are essential in the 
"transformation problem"). In other words, this process, at the level 
of analysis, takes no time, i.e., it takes place within the logical 

Second example is about Marx's "historical materialism" (actually, I 
need some help here.) As is well known, Marx is always careful about 
distinguishing between what is historically specific and what is 
general. One might argue that historical materialism, even if we 
might not agree with the "base-superstructure" thing, has to do with 
these general aspects of human societies (i.e., with "praxis"). In 
this regard, it is not very clear (at least to me) that how 
"historical" this approach is, because it, too, works with 
"reversible" or "logical" time. I use the term, "reversible" 
deliberately, because, in  _The Constitution of Society_, Giddens 
makes use of the "reversible time of the institutions" abundantly, 
based upon Claude-Levi Strauss's "reversible time" concept (also 
Fernand Braudel's the "longue duree" concept, regarding 
institutional framework of societies). These (two) concepts, 
and Giddens's framework, seems to me, fits very well to Marx's 
historical materialism; at least, from a methodological point of view.

Thus, just because Neoclassical economics works with "logical" time 
doesn't mean that critical realism must dismiss it altogether. The 
problem is, as it seems to me, is not whether or not we can use 
"logical" time (we can and we should), but whether our own approach 
can handle "real" (historical etc.) time adequately. Put this way, I 
agree that Neoclassical economics cannot handle historical time, 
whereas critical realism with its ontology can.

Any thoughts?


Huseyin Ozel
Graduate Student
Dept. of Economics
U. of Utah



Driftline Main Page


Display software: ArchTracker © Malgosia Askanas, 2000-2005