Методические указания: профессиональный английский язык для студентов 5 и 6 курсов заочного факультета специальность 060800: Экономика и управление (стр. 7 из 14)

Throughout the last three decades of the 19th century, the English, Austrian, and French contributors to the marginal revolution largely went their own way. The Austrian school dwelt on the importance of utility as the determinant of value and vehemently attacked the classical economists as completely outmoded. A brilliant second-generation Austrian economist, Eugen von Bohm-Bawerk, applied the new ideas to the determination of the rate of interest, putting his stamp for all time on capital theory. The English school, led by Alfred Marshall, sought a reconciliation with the doctrines of the classical writers. The classical authors, Marshall argued, concentrated their efforts on the supply side in the market; marginal utility theory was concerned with the demand side, but prices are determined by both supply and demand, just as a pair of scissors cuts with both blades. Marshall, seeking to be practical, applied his "partial equilibrium analysis" to particular markets and industries.

The leading French marginalist was Leon Walras, who carried the approach furthest by describing the economic system in general mathematical terms. For each product there is a "demand function" that expresses the quantities of the product that consumers demand as depending on its price, the prices of other related goods, the consumers' incomes, and their tastes. For each product there is also a "supply function" that expresses the quantities producers will supply as depending on their costs of production, the prices of productive services, and the level of technical knowledge. In the market, for each product there is a point of "equilibrium"— analogous to the equilibrium of forces in classical mechanics — at which a single price will satisfy both consumers and producers. It is not difficult to analyze the conditions under which equilibrium is possible for a single product. But equilibrium in one market depends on what happens in other markets (a "market" in this sense being not a place or location but a complex of transactions involving a single good), and this is true of every market. There are literally millions of markets in a modern economy, and therefore "general equilibrium" involves the simultaneous determination of partial equilibria in all markets. Walras' efforts to describe the economy in this way led the historian of economic thought Joseph Schumpeter to call his work "the Magna Carta of economics." Walrasian economics is undeniably abstract, but it provides an analytical framework for incorporating

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all of the elements of a complete theory of the economic system. It is not too much to say that nearly the whole of modern economics is Walrasian economics. Certainly, modern theories of money, of employment, of international trade, and of economic growth are all Walrasian general equilibrium theories in a simplified form.

The years between the publication of Marshall's Principles of Economics (1890) and the Great Crash in 1929 may be described as years of reconciliation, consolidation, and refinement. The three national schools gradually coalesced into a single mainstream. The theory of utility was reduced to an axiomatic system that could be applied to the analysis of consumer behaviour under various circumstances, such as a change in income or price. The concept of marginalism in consumption led eventually to the idea of marginal productivity in production, and with it came a new theory of distribution in which wages, profits, interest, and rent were all shown to depend on the "marginal value product" of a factor. Marshall's concept of "external economies and diseconomies" was developed by his leading pupil, Arthur Pigou, into a far-reaching distinction between private costs and social costs, thus laying the basis of welfare theory as a separate branch of economic inquiry. There was a gradual development of monetary theory, which explains how the level of all prices is determined as distinct from the determination of individual prices, notably by the Swedish economist Knut Wicksell. In the 1930s the growing harmony and unity of economics was rudely shattered, first by the simultaneous publication of Edward Chamberlin's Theory of Monopolistic Competition and Joan Robinson's Economics of Imperfect Competition in 1933 and then by the appearance of John Maynard Keynes's General Theory of Employment, Interest and Money in 1936.

The critics

Before going on, it is necessary to take note of the rise and fall of the German Historical school and the American Institutionalist school, which levelled a steady barrage of critical attacks on the orthodox mainstream. The German historical economists, who had many different views, basically rejected the idea of an abstract economics with its supposedly universal laws; they urged the necessity of studying concrete facts in national contexts. While they gave impetus to the study of economic history, they failed to persuade their colleagues that their method was invariably superior. The institutionalists are more difficult to categorize. "Institutional economics," as the term is narrowly understood, refers to a movement in American economic thought associated with such names as Thorstein Veblen, Wesley Clair Mitchell, and John R. Commons. These writers had little in common aside from their dissatisfaction with the abstract theorizing of orthodox economics, its tendency to cut itself off from the other social sciences, and its preoccupation

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with the automatic market mechanism. They failed to develop a theoretical apparatus that would replace or supplement the orthodox theory. This may explain why the phrase "institutional economics" has become little more than a synonym for "descriptive economics." The hope that institutional economics would furnish a new interdisciplinary social science proved stillborn. (This is perhaps not surprising, because it was by abstracting purely economic forces from the totality of social interactions that economics got so far ahead of the other social sciences in theoretical rigour.) Although there is no longer an institutionalist movement in economics, the spirit of institutionalism is alive in such works as the Harvard economist John Kenneth Galbraith's The Affluent Society (2nd ed., 1969) and The New Industrial State (1967).

Returning to the innovations of the 1930s, the theory of monopolistic or imperfect competition remains somewhat controversial to this day. The older economists had devoted all their attention to two extreme types of market structure, that of "pure monopoly," in which a single seller controlled the entire market for one product, and that of "pure competition," characterized by many sellers, highly informed buyers, and a single, standard product. The theory of monopolistic competition gave recognition to the range of market structures that lie between these extremes, including (1) markets having many sellers with "differentiated products," employing brand names, guarantees, and special packaging that cause consumers to regard the product of each seller as unique; (2) "oligopoly," markets dominated by a few large firms; and (3) "monopsony," markets with a single monopolistic buyer and many sellers. The theory produced the powerful conclusion that competitive industries in which each seller has a partial monopoly because of product differentiation will tend to have an excessive number of firms, all charging a higher price than they would if the industry were perfectly competitive. Since product differentiation — and the associated phenomenon of advertising — seems to be characteristic of most industries in developed capitalist economies, the new theory was immediately hailed as injecting a healthy dose of realism into orthodox price theory. Unfortunately, its scope was not great enough. It failed to provide a satisfactory theory of price determination under conditions of oligopoly. In advanced economies many of the manufacturing industries are oligopolistic. The result has been to leave a somewhat undigested lump at the centre of modern price theory, a constant reminder of the fact that economists still lack an adequate explanation of the conditions under which the giant firms of rich countries conduct their affairs.

Keynesian economics

The second major breakthrough of the 1930s, the theory of income determination, was primarily the work of one man — John Maynard Keynes. Keynes asked questions that in some sense had never been asked before; he was interested in the level of national income and the volume of employment rather than in the equilibrium of the firm or the allocation of resources. It was still a problem of demand and supply, but "demand" here means the total level of effective demand in the economy, and "supply" means the nation's capacity to produce. When effective demand falls short of productive capacity, the result is unemployment and depression; when it exceeds the capacity to produce, the result is inflation. The heart of Keynesian economics consists of an analysis of the determinants of effective demand. If one ignores foreign trade, effective demand consists essentially of three spending streams: consumption expenditures, investment expenditures, and government expenditures, each of which is independently determined. Keynes attempted to show that the level of effective demand so determined may well exceed or fall short of the physical capacity to produce goods and services: that there is no automatic tendency to produce at a level that results in the full employment of all available men and machines. This fundamental implication of the theory came as something of a shock to exponents of the traditional economics who had been inclined to take refuge in the assumption that economic systems tend automatically to full employment. By keeping his attention focussed on macroeconomic aggregates, like total consumption and total investment, and by a deliberate simplification of the relations between these economic variables, Keynes achieved a powerful model that could be applied to a wide range of practical problems. His system subsequently underwent considerable refinement — some have said that Keynes himself would hardly have recognized it — and became thoroughly assimilated into the body of received doctrine (see economic stabilizer). Still, it is not too much to say that Keynes is perhaps the only economist to have added something really new to economics since Walras and perhaps since Ricardo.

Keynesian economics as conceived by Keynes was entirely "static"; that is, it did not involve time as an important variable. But a disciple of Keynes, Roy Harrod, soon developed a simple macroeconomic model of a growing economy; in 1948 he published Towards a Dynamic Economics, launching an entirely new speciality, "growth theory," which absorbed the attention of an increasing number of economists.

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Methodological considerations in contemporary economics

Economists are sometimes confronted with the charge that their discipline is not a science. Human behaviour, it is said, cannot be analyzed with the same objectivity as the behaviour of atoms and molecules. Value judgments, philosophical preconceptions, and ideological biases must interfere with the attempt to derive conclusions that are independent of the particular economist espousing them. Moreover, there is no laboratory in which economists can test their hypotheses.

This argument raises issues for all of the social sciences. Only a very general reply can be given here. Economists are wont to distinguish between "positive economics" and "normative economics." Positive economics seeks to establish facts: Will a subsidy to butter producers lower the price of butter? Will a rise in wages in the automobile industry reduce the employment of automobile workers? Will devaluation improve the balance of payments? Does monopoly foster technical progress? Normative economics, on the other hand, is not concerned with matters of fact but with questions of policy, of "good" or "bad": Should the goal of price stability be sacrificed to that of full employment? Should income be taxed at a progressive rate? Should there be legislation in favour of competition?

Positive economics in principle involves no judgments of value; its findings may be as impersonal as those of astronomy and meteorology, two natural sciences that are also denied the advantage of conducting laboratory experiments. As the British philosopher David Hume argued 200 years ago, there is no logical way to deduce "ought" from "is" or prescriptions from descriptions; all statements of fact are ethically neutral. In that sense a value-free economics is possible (at least in principle): if economics is about the application of means to achieve given ends, there would seem to be no reason why one cannot analyze the allocation of means to achieve any end. This is not to deny that most of the interesting economic propositions involve the addition of definite value judgments to a body of established facts, that ideological bias creeps into the very selection of the questions that economists investigate, that what is a means from one point of view may be an end from another, nor even that much practical economic advice is loaded with concealed value judgments, the better to persuade rather than merely to advise. This is only to say that economists are human. The commitment of economists the world over to the ideal of value-free positive economics (or to the candid declaration of personal values in normative economics) serves as a defense against the attempts of special interests to bend the science to their own purposes. The best assurance against bias on the part of any particular economist is the criticism of other economists. The best protection against special pleading in the name of science is the professional standards of scientists.

Methods of inference

But how, one may ask, are facts established in a science that cannot conduct experiments? In essence, the answer is: by means of statistical inference. Economists typically begin by describing the area under study according to what they feel to be important. Then they construct a "model" of the real world, deliberately repressing some of its features and emphasizing others; they abstract, isolate, and simplify, thus imposing order on a world that at first glance appeared disorderly. Having evolved an admittedly unrealistic representation of the real world, they then manipulate the model by a process of logical deduction, arriving eventually at some prediction or implication that is of general significance. At this point, they return to the real world to see whether or not the prediction is borne out by observed events.

But the observable events that are available to test a theory never exhaust the population of all such events: they are merely a sample of it. This raises the problem of statistical inference; namely, what can be inferred about a population from a sample of the population? The theory of statistical inference is simply an agreed-upon procedure for making such inferences, but in the nature of the case it never succeeds in removing all elements of judgment from an inference. Thus the empirical truths of economics are invariably surrounded by a band of doubt, and economists speak of them as "probable" or "likely"; they are propositions in which economists have "a certain degree of confidence" because it is unlikely that they could have come about by chance.

It follows that judgments are at the heart of both positive and normative economics. It is easy to see, however, that judgments about "degrees of confidence" and "statistical levels of significance" are of a totally different order from those that crop up in normative economics. When men say that every individual should be allowed to spend his income as he likes, that people should not be free to control material resources and to employ others, or that governments must offer relief for the victims of inexorable economic forces, they are making the kind of value judgments that laymen have in mind when they accuse economists of producing personal preferences in the guise of scientific conclusions. There is no room for such value judgments in positive economics.

Microeconomics

Since Keynes, economic theory has been of two kinds: macroeconomics — or the study of the determinants of national income — and the traditional microeconomics. The latter approaches the economy as if it were made up only of business firms and households (ignoring governments, banks, charities, trade