Book Review of Economics in Real Time: A Theoretical Reconstruction
In a Walrasian auctioneer market, the auctioneer calls out the demand and supply prices. An agreement is reached between a single buyer and seller. The two parties come together to make an exchange in instantaneous time. The transfer of services/goods is full and fair. After the exchange has taken place, there is no further attachment between the seller and buyer.
These are familiar concepts to students of economics. Of course, familiarity is not the same as believability. In fact, most students—including those of neoclassical leaning—realized that these concepts are rare occurrences in everyday real life. John McDermott observed the same paradox, but unlike most contented neoclassical economists, he wanted an escape from this fairy tale quagmire.
One cannot stage a complete escape from neoclassical theory by attacking fringe ideas, and McDermott seemed to understand this point. He began his book, Economics in Real Time: A Theoretical Reconstruction, by dismissing the very heart of neoclassical theory. First, McDermott argued that economic purchases are not carried out in instantaneous time, but rather, in positive time intervals. He cited four classes of contemporary goods and services that require positive time exchanges: 1) automobiles and other mechanical appliances, 2) electronic goods such as personal computers, 3) semi-prepared food, and 4) medical and retirement plans (p.2). Second, McDermott called for the abandonment of an individualistic microeconomics. All economic analyses must begin at the social level because people are born into and live in human fabricated societies. He believed that the existence of government and private po...
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...esides the policies mentioned by McDermott? Third, are there other classes of goods and services whose purchases exhibit positive time intervals, complex distribution processes, and investment advances made by buyers? The list goes on.
In our opinion, McDermott’s ability to generate these questions and motivate others to seek out answers is perhaps his greatest achievement in this book. And this is an accomplishment that any economist is more than happy to accept.
Works Cited
Langlois, R.N. (2006), The Dynamics of Industrial Capitalism: Schumpeter, Chandler, and the New Economy, London: Routledge.
McDermott, J. (2004), Economics in Real Time: A Theoretical Reconstruction, Ann Arbor: University of Michigan Press.
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