Home > Uncategorized > Is the CORE e-Book – Part Two: The basic background ideology

Is the CORE e-Book – Part Two: The basic background ideology

from Mouvement des étudiants pour la réforme de l’enseignement en économie (MEPREE) France and RWER #75

The basic background ideology: free individuals, free markets and “invisible hand”

The e-Book overtly proclaims that it adheres to “methodological individualism”. That is, individuals are society’s point of departure. They are “free to choose”, between consumption and leisure for “Angela the farmer” and “Mary the employee”, e-Book’s typical consumer, and between leisure and school-grades for “student Alexei”, e-Book’s typical producer.

They are selfish, at least as a first approximation, but happily there is the “invisible hand”. The e-Book, as almost all textbooks do, quotes Adam Smith:

“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest,” he wrote, adding that each would be “led by an invisible hand to promote an end which was no part of his intention” (Unit 1[1] page 7, our italics).

and, like other textbooks, forgets to tell the readers that several hundred pages separate the first phrase from the second – the first is in chapter 2 book I, the second in chapter 2 book IV.[2] Only ideology – or ignorance? – can explain the fact that Smith’s two phrases are artificially linked by the expression “adding that”.

Like other textbooks, the e-Book expresses its admiration for the way prices, “governed by supply and demand”, coordinate the choices of “millions of people”:

“The amazing thing about prices determined by markets is that individuals do not send the messages; they result from the anonymous interaction of sometimes millions of people, governed by supply and demand. And when conditions change — a cheaper way of producing bread, for example — nobody has to change the message (“put bread instead of potatoes on the table tonight”). A price change results from a change in firms’ costs. The reduced price of bread says it all” (Unit 8.0, our italics).

The “invisible hand” again…  

Last but not least, e-Book’s authors know that students have protested on a continuing basis against the models’ “unrealism” – especially in microeconomics. Yet, they invoke – in Unit 3.8, (“This is a good model”, p. 34) – Friedman’s Essay on positive economics and its “as if” argument to justify the model: only its predictions are important – their assumptions can be false but we act “as if” they were right (or true). No sensible person can accept such a fanciful “epistemology”. Except (some) economists that cling desperately, for ideological reasons, to their models, especially the “competitive markets” one.

And there is no “epistemology” that can justify an absurdity.


[1] By the word “unit”, CORE e-Book authors mean “chapter”.

[2] The first is about what I expect from my butcher, the second is about “an individual” who “endeavors to employ his capital … in such a manner that it produce may be of the greatest value”.

  1. August 9, 2016 at 12:51 am

    Modern Monetary Theory and Practice: an Introductory Text

    The first version of our MMT textbook – Modern Monetary Theory and Practice: an Introductory Text – was published on March 10, 2016 and is authored by Bill Mitchell, Randy Wray and Martin Watts.

    By way of explanation, this edition contains 15 Chapters and is designed as an introductory textbook for university-level macroeconomics students.

    It is based on the principles of Modern Monetary Theory (MMT) and includes the following detailed chapters:

    Chapter 1: Introduction
    Chapter 2: How to Think and Do Macroeconomics
    Chapter 3: A Brief Overview of the Economic History and the Rise of Capitalism
    Chapter 4: The System of National Income and Product Accounts
    Chapter 5: Sectoral Accounting and the Flow of Funds
    Chapter 6: Introduction to Sovereign Currency: The Government and its Money
    Chapter 7: The Real Expenditure Model
    Chapter 8: Introduction to Aggregate Supply
    Chapter 9: Labour Market Concepts and Measurement
    Chapter 10: Money and Banking
    Chapter 11: Unemployment and Inflation
    Chapter 12: Full Employment Policy
    Chapter 13: Introduction to Monetary and Fiscal Policy Operations
    Chapter 14: Fiscal Policy in Sovereign nations
    Chapter 15: Monetary Policy in Sovereign Nations

    It is intended as an introductory course in macroeconomics and the narrative is accessible to students of all backgrounds. All mathematical and advanced material appears in separate Appendices.

    A Kindle version will be available.

    Note: a sister edition will cover both the introductory and intermediate years of university-level macroeconomics (first and second years of study).

    The sister edition will contain an additional 10 Chapters and include a lot more advanced material as well as the same material presented in this Introductory text.

  2. merijntknibbe
    August 14, 2016 at 10:36 pm

    I just came home from vacation. The roads were crowded, with people coming home from vacation… Individual choice, you know. Makes me remember a movie about a chap called Brian and individualism: https://www.google.nl/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=0ahUKEwj5hObl7MHOAhXJmBoKHV8sBNUQyCkIIDAA&url=https%3A%2F%2Fwww.youtube.com%2Fwatch%3Fv%3DjVygqjyS4CA&usg=AFQjCNFjgcsY6g7JPMuqcY6xFYFWJE2hsQ

    More scientifically: it is not that hard to classify individual behaviour and even values into a lmited number of sub-cultural groups, using a surprising limited number of basic variables https://www.google.nl/search?q=sinus+milieu&client=firefox-b&tbm=isch&imgil=FXl_ahgVR2s0bM%253A%253B8A8fAzvia_e-GM%253Bhttps%25253A%25252F%25252Fprezi.com%25252Fow4lupz3tnit%25252Fdas-sinus-milieu%25252F&source=iu&pf=m&fir=FXl_ahgVR2s0bM%253A%252C8A8fAzvia_e-GM%252C_&usg=__qGdRYITb3mh_Zmd_H-6U9sQCVE4%3D&biw=1365&bih=671&ved=0ahUKEwi4yfuF7MHOAhXM1RoKHUpmBaUQyjcIKQ&ei=weGwV_jkDsyra8rMlagK#imgrc=FXl_ahgVR2s0bM%3A

    Economists should take such ideas – and their influence on how markets work – much more serious.

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