Re: CAMREC: The 'no supply-demand curve' sign

From: the Campaign for Real Economics (
Date: Tue Oct 17 2000 - 16:41:51 BST

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    From: the Campaign for Real Economics <>
    Date: Tue, 17 Oct 2000 16:41:51 +0100
    Subject: Re: CAMREC: The 'no supply-demand curve' sign

    Each point on the supply curve and each point on the demand curve is the sum
    of the equilibrium supplies and demands of each individual who sells or buys
    (resp.) in the "market". If each individual were in that sort of equilibrium
    and responded to prices with such fine optimising behaviour as is required to
    construct these curves, then we almost certainly would not observe the power
    law distributions studied by the owner of the web page Moreover, economists do not ever specify the
    "market". It is "an analogy for an unmodelled process" in the words of
    Binmore and Samuelson. So the theory cannot be validated by identifying a
    corresponding institutional reality; there is plenty of evidence that
    individuals never behave in the manner described by constrained optimisation
    algorithms (defining the equilibrium of the individual) and the statistical
    evidence of real exchange is incompatible with the sort of normally and
    independently distributed series economists assume on the basis of a system
    equilibrium. Consequently, supply and demand curves have no relationship
    whatsoever to real economies.

    The point is not just that the real world is more complex than indicated by
    supply and demand curves (though that is certainly true) but, far more
    importantly, that the particular simplifications of conventional economics
    (typified by the supply and demand diagram) constitute a conceptual barrier
    between conventional economics and the economics of the real world.

    Besides, as Bruce said, it was amusing to devise the CAMREC logo.


    the Campaign for Real Economics wrote:

    > What is the message behind the 'no supply-demand curve' sign on the CAMREC
    > homepage?

    Professor Scott Moss
    Centre for Policy Modelling
    Manchester Metropolitan University
    Aytoun Building
    Manchester M1 3GH

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