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EN
The aim of the current article to present the views of Milton Friedman contained in his methodological critiques of two works relating to the significance of the process of how price are determined in the economy. The works in question are Abba Paul Lemer’s Economics of Control. Principles o f Welfare Economics and the monograph by Oskar Lange Price Flexibility and Employment. Both the reviews by Friedman and the works that were subject to his critique were published in the 1940s. They can therefore be regarded as classics in the history of economic thought. Friedman’s critiques were later contained in his retrospective writings on the principles of positive economics. A collection of his essays on that subject was published in Chicago in 1953 under the title Essays in Positive Economics. Both of Friedman’s works discussed in the present article are to be found in the chapter of that book devoted to a criticism of the methodology of positive economics. The present article consist of three sections. The first is devoted to a presentation of two methodologically different approaches to socio-economic order developed within the framework of neo-classical economics. The author draws upon the ideas of another eminent economist of the 20th century, Friedrich von Hayek, who made a distinction between the ideas of a spontaneous social order and the principles a rationally ordered economy, invoking the dichotomous concept of the world prevalent in Greek philosophy, which distinguished between natural order, „cosmos”, and artificial order, reflected in the idea of „taxis”. The idea that the economy can be treated as a reality which is subject to control is reflected in the views held by Lerner and Lange, while Friedman is clearly inclined towards the „cosmos” concept of the economy. The second and third section of the current article contain a discussion of the polemical views expressed by Friedman. The author discusses Friedman’s comments on the works by Lemer and Lange respectively. Since Friedman’s argumentation is based on the highly abstract conventions of deductive economics, the author of the article makes an attempt to reproduce Friedman’s reasoning as closely as possible, trying to show the incisive nature of the economist’s mind and the precision with which he was able to pinpoint the logical flaws in the reasoning of Lemer and Lange. Milton Friedman’s critical paper entitled Lange on Price Flexibility and Employment. A Methodological Criticism, which referred to Oskar Lange’s monograph of 1944, was originally published in the American Economic Review in September 1946, while his polemic with the book by Abba Paul Lemer (which appeared in 1946), entitled Lemer on the Economics of Control was first published in October 1947 in the „Journal of Political Economy”.
2
Content available remote Ekonomia neoklasyczna - ujęcie retrospektywne
EN
The name ‘neoclassical economics’ is used with respect to three different schools of economics that developed independently of one another in the 1870s, in England, Austria and Switzerland. The first of the schools, among whose members were economists from the University of Cambrige, had its intellectual continuation in America, and is for this reason also referred to as the Anglo-American school. Another designation used for it is the school of partial equilbiria, because that was the method which members of the school mainly used in their research. The name neoclassical school is sometimes used exclusively for this particular school, out of the three concurrently developing schools, because it was the ideas of this school, its methods of analysis, directions of research and ways of describing economic phenomena that best correspond to the general characteristics of neoclassical economics. The school was founded by William Stanley Jevons, but an unquestioned master of this orientation in economic thinking was Alfred Marshall, the key figure of the Cambridge school. The neoclassical school is sometimes also described as the Marshall school, while the name of its founder is associated with the socalled Jevons rervolution in economics. In America, the school’s idea were developed especially by John Bates Clark. The founder of the Austrian school, which developed at the same time at the University of Vienna, was Carl Menger; among the best known economists of the second generation of that school were Friedrich von Wieser and Eugen von Boehm-Bawerk. The school stressed the psychological premises of human action, and that is why it is sometimes referred to as the psychological or subjectivist school; this name is sometimes combined with basic method of economic analysis used by its representatives, marginal calculus, and it is therefore called the subjective-marginal (subjective-marginalist) school, a name that is also used for the whole of economics that developed as a result of the Jevons revolution. The third of the schools of economics discussed is the Lausanne school, whose founder, Leon Walras, was connected with University of Lausanne; the Polish members of this school included Władysław Zawadzki, later a professor at the University in Wilno and the Warsaw School of Commerce [Szkoła Głowna Handlowa]. Among the main representatives of the school one should mention the names of Vilfredo Pareto, Enrico Barone and Luigi Amoroso. The Lausanne school is also called the mathematical school, because of the widespread use of mathematical methods in economics, which was a novelty at the time when the school developed. The school is sometimes also referred to as the school of general equilibrium, because of the fact that it viewed equilibrium globally for the whole economy, on all the markets in parallel. All three schools developed as a result of the so-called Jevons revolution, which brought into focus the individual consumers with their problems and motivations of choice. The Jevons revolution changed the perspective in the way that economics was perceived, going back to analysing phenomena in individual terms, from the perspective of particular economic agents. Generally speaking, the Jevons revolution not only formulated a basis for the theory of the consumer, but it also laid a foundation for the economics of firms, for the description of interrelated markets and for the study of markets for particular goods and services. We thus treat the revolution as marking the beginning of microeconomics in its modem form. The Jevons revolution is also described as the marginal, marginal-subjectivist or marginalist-subjectivist revolution. These names stress the methods of research in which, for the first time, and on a large scale, the principles of differential calculus were used in economics for isolating marginal measures, which became the foundation of microeconomic thinking. The adjective ‘subjective’ stressed the role of an individual’s psyche in making economic decisions. All those elements constituted a new approach to economic phenomena, as classical economics conceived of economic processes in macroeconomic terms and focused on processes of production, ignoring consumer economics and the internal economic analysis of firms, thus paying no attention to the behaviour of particular economic agents.
EN
The aim of this study is to compare the research methodology cotained in two works of eminent Polish economists - Oskar Lange and Jan Drewnowski. The area under study focuses of the theory of planned economy, and especially two key works in this field - Oskar Lange's "O ekonomicznej teorii socjalizmu" [On the economic theory of socialism] published in Cambridge in the years 1936-37, and Jan Drewnowski's Habilitationsschrift "Próba ogólnej teorii gospodarki planowej" [An attempt at a general theory of planned economy] published in the years 1937-1938, in the journal "Ekonomista". Both theories are characterized by a high degree of abstraction, logical coherence and clarity of the conclusions. However, they differ greatly in their methodology. Both employ the analytical methods of the neo-classical school. Oskar Lange's model bases on the methodology of the Lausanne school as contained in the model of general equilibrium of Léon Walras. This model specifies the set of prices at which an economy reaches equilibrium. It is a certain methodological fiction, and one of its basic assumptions is the stability of data or the variables that affect the basic economic magnitudes. The data include the consumers' preferences, the resources and qualifications of the labour force, the state of technology, the socio-economic system etc. Oskar Lange's model placed the central planner in a position of being responsible for effecting such a set of prices that would ensure the economy's highest efficiency, at a given level of resources and methods of production. The Central Planning Office was in this model supposed to replace the function of the market with regard to information and motivation towards rational decision-making. The aim of the model was to provide a theoretical basis for the efficiency of the socialist economy in the field of ensuring welfare. Jan Drewnowski's model was also based on the methodology of the Lausanne School but it focused on the preference theory of Vilfred Pareto. Jan Drewnowski analyzed the functions of preferences of different economic entities, and additionally introduced the notion of the functions of possibilities, i.e. restrictions stemming from institutional barriers, which were reflected in the legal regulations specific for different socio-economic systems. Socio-economic system was one of the data adopted in research on the state of economic equilibrium. Jan Drewnowski tried to show that changes relating to that datum could shape new preferences and possibility functions in the economy. The aim of Jan Drewnowski's model was to show the essential differences between socio-economic systems.
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