Theory Quotes - page 32
There is little doubt that the observation that quality may depend on price (productivity on wages; default probability on interest rates) has provided a rich mine for economic theorists: A simple modification of the basic assumptions results in a profound alteration of many of the basic conclusions of the standard paradigm. The Law of Supply and Demand has been repealed. The Law of the Single Price has been repealed. The Fundamental Theorem of Welfare Economics has been shown not to be valid.
More than that, the theories that we describe here provide the basis of progress toward a unification of macroeconomics and microeconomics. They pro vide an explanation of unemployment and credit rationing, derived from basic microeconomic principles. It is a theory in which the extensive idleness that periodically confronts society's resources, human and capital, is seen as but the most obvious example of market failures that prevasively and persistently distort the allocation of resources.
Joseph Stiglitz
I adopt Mr. Darwin's hypothesis, therefore, subject to the production of proof that physiological species may be produced by selective breeding; just as a physical philosopher may accept the undulatory theory of light, subject to the proof of the existence of the hypothetical ether; or as the chemist adopts the atomic theory, subject to the proof of the existence of atoms; and for exactly the same reasons, namely, that it has an immense amount of primâ facie probability: that it is the only means at present within reach of reducing the chaos of observed facts to order; and lastly, that it is the most powerful instrument of investigation which has been presented to naturalists since the invention of the natural system of classification and the commencement of the systematic study of embryology.
Thomas Henry Huxley
I can date my own personal 'revolution' rather exactly to May or June 1933. It was like this. It began... with Hayek. His "Prices and Production" is one of the influences that can be detected in The Theory of Wages; it could not have been otherwise, for 1931 was a Prices and Production year at the London School of Economics... I did not in fact find it all easy to fit in with my own ideas. What started me off in 1933 was an earlier work of Hayek's, his paper on 'Intertemporal Equilibrium', an idea which I found easier to reduce to my preferred (Paretian or Wicksellian) pattern.
John Hicks
It is not so well known that it [Keynes's and my own move from thinking in terms of price-levels and the rate of interest to thinking in terms of inputs and outputs] is matched by a movement from Hayek to Harrod. I once asked Harrod what had put him on to the construction of his so-call 'dynamic' theory; he said, to my surprise, that it was thinking about Hayek.
John Hicks
While economic theory in general may be defined as the theory of how an economic condition or an economic development is determined within an institutional framework, the welfare theory deals with how to judge whether one condition can be said to be better in some way than another and whether it is possible, by altering the institutional framework, to achieve a better condition than the present one.
John Hicks
The 'new theory of money and the cycle' which is spoken of in the opening paragraph is of course Hayek's. It was from Hayek that I began - where I got to will be seen. Even at the end, I was minimising my differences from Hayek. I could do so because, as I have elsewhere explained (Economic Perspectives, p. 141n), I still thought, like Pigou and Robertson, and Hayek, but by that time unlike Keynes, that 'we were talking about fluctuations, which, since they did not result in complete collapse or complete explosion, could not have engendered an expectation of going on forever. Booms could then be considered as times of high prices, slumps as times of low prices - with regard to some norm, which throughout the which throughout the fluctuations would not be changed, or not much changed'.
John Hicks
We must now ask how changes of this sort can come about, considering first discoveries, or novelties of fact, and then inventions, or novelties of theory. That distinction between discovery and invention or between fact and theory will, however, immediately prove to be exceedingly artificial.
Thomas Samuel Kuhn
To my complete surprise, that exposure to out-of-date scientific theory and practice radically undermined some of my basic conceptions about the nature of science and the reasons for its special success.
Those conceptions were ones I had previously drawn partly from scientific training itself and partly from a long-standing avocational interest in the philosophy of science. Somehow, whatever their pedagogic utility and their abstract plausibility, those notions did not at all fit the enterprise that historical study displayed. Yet they were and are fundamental to many discussions of science, and their failures of verisimilitude therefore seemed thoroughly worth pursuing. The result was a drastic shift in my career plans, a shift from physics to history of science and then, gradually, from relatively straightforward historical problems back to the more philosophical concerns that had initially led me to history.
Thomas Samuel Kuhn
These three classes of problems-determination of significant fact, matching of facts with theory, and articulation of theory-exhaust, I think, the literature of normal science, both empirical and theoretical. They do not, of course, quite exhaust the entire literature of science. There are also extraordinary problems, and it may well be their resolution that makes the scientific enterprise as a whole so particularly worthwhile. But extraordinary problems are not to be had for the asking. They emerge only on special occasions prepared by the advance of normal research.
Thomas Samuel Kuhn
Normal science, the puzzle-solving activity we have just examined, is a highly cumulative enterprise, eminently successful in its aim, the steady extension of the scope and precision of scientific knowledge. In all these respects it fits with great precision the most usual image of scientific work. Yet one standard product of the scientific enterprise is missing. Normal science does not aim at novelties of fact or theory and, when successful, finds none.
Thomas Samuel Kuhn
I have a theory, that there is a terrific link between what is funny and what is scary. I think there is a very close connection between what frightens people and what makes them laugh. Laughter is a kind of nervousness. Animals don't laugh. Smiling is, anthropologists agree, directly linked to the baring of the teeth.
Christopher Walken
In fact, for a voluntarist like Schopenhauer, a theory so sanely and cautiously empirical and rational as that of Darwin, left out of account the inward force, the essential motive, of evolution. For what is, in effect, the hidden force, the ultimate agent, which impels organisms to perpetuate themselves and to fight for their persistence and propagation? Selection, adaptation, heredity, these are only external conditions. This inner, essential force has been called will on the supposition that there exists also in other beings that which we feel in ourselves as a feeling of will, the impulse to be everything, to be others as well as ourselves yet without ceasing to be what we are.
Miguel de Unamuno
The decisive weakness in neoclassical and neo-Keynesian economics is not the error in the assumptions by which it elides the problem of power. The capacity for erroneous belief is very great, especially where it coincides with convenience. Rather, in eliding power - in making economics a nonpolitical subject - neoclassical theory destroys its relation to the real world. In that world, power is decisive in what happens. And the problems of that world are increasing both in number and in the depth of their social affliction. In consequence, neoclassical and neo-Keynesian economics is relegating its players to the social sidelines where they either call no plays or use the wrong ones. To change the metaphor, they manipulate levers to which no machinery is attached.
John Kenneth Galbraith
There is an honesty in science which demands that the best means be used for the determination of truth. Certainly there are many sorts of truth in the universe, and many aspects of truth must be taken into account if man is to live most effectively in the social organization to which he belongs. But in regard to matter---the stuff of which both non-living materials and living organisms are made---scientists believe that there is no better way of obtaining information than that provided by human sense organs. No theory, no philosophy, no body of theology, no political expediency, no wishful thinking, can provide a satisfactory substitute for the observation of material objects and of the way in which they behave. (page 9).
Alfred Kinsey
From semantics to shipbuilding, from dream theory to propositional logic, any specialist ... is invariably astonished to discover that modern knowledge was foreshadowed at the time. ... Should we not replace these foreshadowings by the study of the influences of Hellenistic thought on modern thought?
Lucio Russo
The one intelligible theory of the universe is that of objective idealism, that matter is effete mind, inveterate habits becoming physical laws. But before this can be accepted it must show itself capable of explaining the tridimensionality of space, the laws of motion, and the general characteristics of the universe, with mathematical clearness and precision ; for no less should be demanded of every Philosophy.
Charles Sanders Peirce
In reality the cycles we have the occasion to observe are generally not damped. How can the maintenance of the swings be explained? Have theses dynamic laws deduced from theory and showing damped oscillations no value in explaining the real phenomena, or in what respect do the dynamic laws need to be completed in order to explain the real happenings? They (dynamic laws) only form one element of the explanation: they solve the propagation problem. But the impulse problem remains.
Ragnar Frisch
