He publishes a list of "'Free Market' Double Standards" that leaves a lot to be desired.
First I still don't understand his obsession with marginal product or why the marginalist condition for profit and utility maximization is so repugnant to him. Humans don't do calculus when the optimize, I'll grant (and I have granted recently), but they do (roughly) optimize, which implies an equation of marginal costs and benefits (at least in a competitive market). And, btw, while people don't use calculus "do X until it costs about as much to do one more time as it benefits me to do one more time" is a pretty easy heuristic to follow, for those of you who like to emphasize the heuristics point. That takes up the first couple lines of his critique. Moving on...
On #3: Alex Tabarrok and Justin Wolfers are different people. This is not a "double standard".
On #4: Milton Friedman and Robert Lucas are different people. This is not a "double standard". This one is particularly aggravating because while Friedman and Phelps did foreshadow some of Lucas's (excellent) critique, they still contributed to the literature on a reduced form Phillip's Curve that was Lucas's target in the first place!
On #5: Scott Sumner is one person. Good job. [I couldn't decide if that one was snarky or positive reinforcement... eh, who cares]
On #7: This seems like an empirical question. Anyway, I don't think any free market economists have denied that profits and income motivate those who earn obscene amounts of profit and income (and I use "obscene" in the nicest way possible).
On #8: This badly misrepresents Arrow-Debreu. There is no one consumer with one set of preferences. There are, in fact, i consumers each with their own idiosyncratic, perverted, quaint, or boring set of preferences (Arrow-Debreu, 1954, pg. 269). i can be more than one if Unlearningecon wants it to be. i can be 10,000,000,000, thus exceeding the number of consumers currently living on the planet, if Unlearningecon wants it to be. The only constraints on the preferences are that they be complete, transitive, and continuous. That doesn't seem like too much to ask to me. "Complete" is the really suspect one, but I think "locally complete" should be enough to appreciate the point of the model. Even given that particular nit that you may be interested in picking, it hardly seems like a "double standard" to me. It strikes me as being more along the lines of Nobel Prize material (and I am not alone in this assessment. The Nobel Prize committee, for one, seems to agree with me. The last line is pretty dumb too... how are you "robotically responding" if you follow your preferences??? Isn't that the opposite of responding robotically? Don't we usually reserve the word "robotic" to describe people who respond to some predetermined protocol regardless of their preferences? Don't we reserve the word "robotic" for people who don't even appear to have preferences of their own? Isn't Arrow-Debreu exactly the opposite of this?
On #9, #10, #12, Kudos.
I think the #11 community is probably pretty narrow, and they're probably people we all ignored anyway.
On #13, counterfactuals work both ways. I'm not quite sure this is fair. I do think the point is right (assuming we put in some language in there about cyclicality... cuts probably do crowd in during booms).
On #16: I don't understand how this problem doesn't solve itself.
#17 Just seems wrong, but I have to think about it more. Anyway, in terms of monopolies we often draw flat marginal cost curves for monopolies for precisely this reason. I don't se why upward sloping supply curves depends on diminishing returns - it seems to only require heterogeneous technology.
On #18 I think this describes very few people.
On #20: I think almost everyone thinks 2008 is related to the last several decades... they just have different perspectives on the relevant contributing features of the last several decades.
On #21: This is more of a technicality, but Caplan is talking about relative prices in the first post and general prices in the second post. Those are two quite different things. The observation that these are two quite different things is an observation that spans all sorts of ideological backgrounds.
On #22: Dr. Pirie is not a Congressional Republican. this is not a double standard.
And #23 isn't even a double standard at all!!! This is one of the greatest virtues of capitalism!!! That Unlearningecon is identifying this as a contradiction is not a good sign at all.
Demand, Supply, and Macroeconomic Models
5 hours ago