Postmodern Moments in Modern Economics

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Summary: Keynes's definition of uncertainty is not postmodern
Review: The authors of this book,Ruccio and Amariglio(RA),lack the technical training in mathematics,statistics,probability and logic needed to follow the analysis of Keynes's development of the concepts of the weight of the evidence,w,and uncertainty,u,which were developed in the A Treatise on Probability(TP)in 1921 and the General Theory(GT)in 1936,respectively.RA's book contains three major flaws.The first flaw is RA's failure to use Keynes's definition of the weight of the evidence specified by Keynes on p.315 of the TP.w is defined to be an element of the set of numbers defined on the unit interval [0,1].Thus,0<=w<=1.Keynes is the first scholar in history to define an index to rank and/or measure the weight of the evidence.w measures the completeness and/or reliability of the total amount of potential evidence available on which a decision maker can estimate either a point estimate ,in some special cases or,ingeneral,an interval estimate of the probability, which lies BETWEEN a lower bound and an upper bound.Again,Keynes is the first scholar in history to put forth a coherent systematic approach for the calculation of interval estimates based on the earlier work of George Boole.In the GT,u=f(w).u and w are inversely(negatively)related.Thus, if w decreases,u increases and if w increases,u decreases.The reader should note that Keynes could have used any number of different terms instead of uncertainty.Keynes could have used other words or terms,such as vagueness,unclearness,ambiguity,fuzziness,unreliability,etc.No matter what relevant term he could of used ,you would end up with an inverse relationship.Uncertainty of the evidence must then be a range ,starting from complete or total uncertainty of the evidence(w=o so u=1)and declining to great uncertainty to acute uncertainty to severe uncertainty to moderate uncertainty to mild uncertainty to little uncertainty to no uncertainty[w=1,so u=0].RA reject Keynes's definitions and instead substitute the contradictory definitions of GLS Shackle,Paul Davidson,Tony Lawson and Anna Carabelli,which define uncertainty to mean complete or total uncertainty alone.Keynes used the word ignorance to specify the case of complete or total uncertainty.He reached the conclusion on p.310 of the TP that the case of decision making under ignorance was not a major problem in the real world.In the real world,it is the case of decision making with only partial or incomplete information that causes all the problems for a decision maker.Unfortunately,RA,in adopting the erroneous, extreme case of Shackle,Davidson,Lawson and Carabelli,that uncertainty is total(u=1 and w=0),totally and completely eviserate uncertainty as applicable in the real world.This extreme post Keynesian view of uncertainty is even more extreme than the classical-neoclassical belief that w=1(the case of risk only).The second flaw in RA is their acceptance of the badly flawed argument,first made by Frank Ramsey in two book reviews of Keynes's TP in 1922 and 1926,that Keynes's use of the terms "nonnumerical" and "nonmeasurable" in chapter 3 of the TP meant that it was not possible,with some special exceptions,to use numbers to quantify an estimate of probability.Supposedly,this meant that the BEST a decision maker could do would be to ordinally rank probabilities SOME of the time.There is no support for this silly and grossly incorrect interpretation of Keynes's path breaking work on interval(set) estimates done in chapters 15 and 17 of the TP.Keynes also clearly alerted the reader to the importance of these chapters in chapters 3,5 and 10 of the TP.Of course, it is most likely that intervals will overlap.In these cases,problems of incomparability,nonrankability and incommensurability OF THE INTERVALS will occur if the standard ordering relations ,such as less than or equal to,greater than or equal to ,or equal to are used.These two errors in RA appear continuously throughout the book.On pp.78-82,the above two errors are committed numerous times .RA's third error follows from errors 1 and 2.It is a combination of nihilism and the antinomian fallacy that all theories are period or time specific and hence always relative to the specific social,legal,political and economic institutions of a particular historical epoch or time period.The conclusion is that general theories are not possible.It is impossible for this reviewer to find any positive redeeming value in this book .However,a reader may want to read this book to measure the degree of ignorance of the economics profession concerning the technical breakthroughs made by J M Keynes almost a century ago.The only other comparable case of economists ignoring pathbreaking work is the case of Benoit Mandelbrot.His work, started in the early 1950's,presents overwhelming evidence that a decision maker can not rely on the normal probability distribution to calculate outcomes in financial markets.Economists still claim that you can.

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Summary: not your father's modernist economics...
Review: In most books exploring postmodernism's development and impact on the social sciences, economics is almost always left out of the disciplines examined because it is assumed that economics is buried in an intellectual grave of modernism and the Cartesian subject. This book flies in the face of such a view and reconfigures how economics as a field should be understood, as well as how its subdisciplines fit together (feminist economics, institutionalist economics, Keynesian/post-Keynesian economics, etc.). Ruccio and Amariglio will help you understand how various and seemingly disconnected economic subdisciplines are actually a response to a theoretical shift in which economists were forced to acknowledge certain sticky questions: how does uncertainty transform the perfectly masterful `rational economic man'? how do feminist challenges transform the central actor of neoclassical economics?

While some authors examine how post-structuralism shows its face in the writings of a few heterodox economists swimming against the tide in the `dismal science' of economics, Ruccio and Amariglio describe how postmodern questions about knowledge and subjectivity show up in economic authors who would never dream of touching postmodern theory. In a remarkable way, this book `reads' economics and discovers that despite its pretenses to a high modernist theory of the subject and knowledge, postmodernism has crept in the back door.