Good piece by David Ruccio “A funny thing happened on the way to the teaching of neoclassical economics.” I’m teaching intermediate microeconomics this quarter and doing my best to introduce the neoclassical theory of value and distribution in a theoretical context which touches on classical notions (Ricardo and Marx) and contemporary Post Keynesian and Institutionalist (the original version) critiques. I’m using my own notes, furiously updating them on a weekly basis on Blackboard, since a “textbook” that explores these ideas from this broader perspective is non-existent. I’m allowing students to pick any mainstream intermediate microeconomic text to follow my explanations of the core neoclassical portions of the course, supplemented by readings in post keynesian economics and my own notes.
The course focuses on the institutions of the firm, the household and the market, by explaining them from the above alternative perspectives. Most of the course is focused on the neoclassical narrative, but in a fashion that contrasts that narrative with the classical (Ricardo and Marx), post keynesian and institutionalist alternatives. In addition, I’ll be providing historical, empirical, data on the actual behavior (structure) of these three institutions. In this last part I’m particularly interested in explaining the social construction of wants, underscoring the reality of necessities, difficulties with the notion of substitutability, the concentration of corporate power, and the monopoly capital thesis.
In this introductory week, I’ve introduced the Ricardian Corn Model as a way of explaining an alternative theory of distribution and to focus the students’ attention on the classical notion that it’s the marginal producer that sets the price in competitive markets. I’m also introducing a simplified input-ouptut table as a way of highlighting the relationship between income flows, final demand, and prices. This also allows me to talk about the classic notion of an equal profit rate, the exogeneity of wages, and the priority of income distribution (economic power) and technology, in a discussion of pricing.