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The Archaic, the Obsolete and the Mythical in Neoclassical Economics
Author(s) -
Hosseini Hamid
Publication year - 1990
Publication title -
american journal of economics and sociology
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.199
H-Index - 38
eISSN - 1536-7150
pISSN - 0002-9246
DOI - 10.1111/j.1536-7150.1990.tb02262.x
Subject(s) - rationality , economics , positive economics , neoclassical economics , simple (philosophy) , dimension (graph theory) , ideal (ethics) , mainstream economics , epistemology , bounded rationality , philosophy , applied economics , mathematics , microeconomics , pure mathematics
A bstract . The assumptions of omniscient rationality and of optimizing behavior of neoclassical economics are serious flaws in that theoretical system. By imitating Newtonian mechanics , by going back to 18th century psychology and philosophy and to Benrtham's rationalism and hedonism, and by assuming the ideal world of perfect competition , neoclassical economics had to ignore its psychological dimension and thus focus on the behavior of a simple and abstract “economic man” , who lacks social, ethical and political dimensions, and who is not a creature of habit, hunches, impulses, etc. The rationality postulate cannot be tested empirically and economic behavior is much too complicated to warrant use of the classical optimization techniques of Newtonian mechanics. Economics , dealing with open systems and being an evolutionary science , once again is not logically consistent with the application of classical Newtonian optimization techniques.