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

From: the Campaign for Real Economics (
Date: Thu Oct 19 2000 - 11:25:08 BST

  • Next message: the Campaign for Real Economics: "Re: CAMREC: The 'no supply-demand curve' sign"

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    From: the Campaign for Real Economics <>
    Date: Thu, 19 Oct 2000 11:25:08 +0100
    Subject: Re: CAMREC: The 'no supply-demand curve' sign

    the Campaign for Real Economics wrote:

    > I'm sitting here imaging taking an introductory economics class. When the
    > teacher puts the first supply/demand curve up, I get up and point out that
    > no one uses such a curve to make any decisions and no empirical data
    > justifies the curve. The teacher then replies, 'you are right, but this is
    > the best we can do for an approximation.' I've never known how to get past
    > that reply.

    I raise issues of what constitutes good science and what constitutes bad
    science. Bad science makes unjustified and unjustifiable claims about its
    subject. Economics is bad science because formal properties of its core theory
    ensure that the assumptions of the theory cannot be validated and there is no
    evidence that its implications (or predictions) can be validated.
    Consequently, economics tells us nothing about it purported target systems.

    > As I recollect, that is what my economics teacher told me 32 years ago when
    > I asked that question at age 17. I doubt the answer has changed, but it
    > has been a long time. What passes for an adequate justification for simple
    > supply/demand curves these days?

    I think the first few steps are asserted to be plausible (higher prices induce
    people to consume less and sellers to offer more). The next step is to slip in
    a little formalism: "everyone would prefer to be happier and everyone would
    pay more for things they like a little better" gets turned into a utility
    function or indifference map. Those who like formal approaches get sucked in.
    Once you have accepted something as plausible, a slightly less plausible notion
    that deepens the plausible thing might be more easily accepted.

    I wonder if this would be an interesting research issue for psychologists and
    social psychologists?

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

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