efficient markets quite by definition are allowing greater progress along individual value scales than inefficient markets, though not necessarily as much progress as some further refinement

Inefficient markets are great for increasing individual wealth of certain groups. I think Rothbard would disagree with the second point (regulation) - as would I.

In short, I, and much of the modern profession of economics, hold little attachment to the origins of economic theory (though I am surprised that you didn't include Smith's Wealth of Nations in your list, being more directly foundational for economics through the 19th century).

The wealth of nations was built on the philosophical foundations set in TMS it is even referenced as such with Smith labeling economics as the study of the nature of morality.

Indeed, you define out the very kind of economics that is most prevalent in modern departments (Berkeley perhaps excepted): mathematical models that seek to understand and predict how humans will act.

Explain to me how that is different than statistics. You cannot do economics without good statistics, but if it stops there, then you are a statistician; by definition. Just because you are discussing markets is irrelevant.

As I said in other responses, modern economics seeks to be little more than advanced statistics as you mentioned. You undoubtedly took econometrics so you will know what I am referencing. Masters level economics might as well be a masters of statistics currently.

The reason this is the case is because political economy was getting a bad rap around the time of the first U.S. depression (1893) and was being marginalized to the point of extinction. The result was that Thorsten Veblen, Alfred Marshall and others formed what we now call neoclassical economics in the late 19th century. At that point the basis' and market theories implicit in the assumptions in each of the Smith/Marx/Mises camps. Further study from there revolved around either supply and demand, labor theory of value or time preference assumptions. The first example taking the broadest foothold.

Again, this is the stuff that economic philosophers debate and really has no relation to the original topic at this level.

The Difference Between Utility and Utility

by Matt_Simpson 1 min read2nd Dec 200916 comments


Recently I argued that the economist's utility function and the ethicist's utility function are not the same.  The nutshell argument is that they are created for different purposes - one is an attempt to describe the actions we actually take and the other is an attempt to summarize our true values (i.e., what we should do).  I just ran across a somewhat older post over at Black Belt Bayesian arguing this very point.  Excerpt:

Economics (of the neoclassical kind) models consumers and other economic actors as such utility maximizers... Utility is not something you can experience. It’s just a mathematical construct used to describe the optimization structure in your behavior...

Consequentialist ethics says an act is right if its consequences are good. Moral behavior here amounts to being a utility maximizer. What’s “utility”? It’s whatever a moral agent is supposed to strive toward. Bentham’s original utilitarianism said utility was pleasure minus pain; nowadays any consequentalist theory tends to be called “utilitarian” if it says you should maximize some measure of welfare, summed over all individuals... Take note: not all utility maximizers are utilitarians.

There’s no necessary connection between these two kinds of utility other than that they use the same math. It’s possible to make up a utilitarian theory where ethical utility is the sum of everyone’s economic utility (calibrated somehow), but this is just one of many possibilities. Anyone trying to reason about one kind of utility through the other is on shaky ground.