Reading Notes on: Nicholas Kaldor, The Irrelevance of Equilibrium Economics, in Further Essays on Economic Theory, Holmes & Meier, 1972.

Equilibrium Economics, as embodied by Walras and Debreu (where equilibria of competing forces determine observed economic states), is “barren and irrelevant.”

Assumptions of economics, unlike hard sciences, are not based on observation. For example, some are unverifiable: producers maximize their profits, consumers maximize utility. Some are counter-factual: perfect competition never exists, markets are not impersonal, economic actors never act from perfect knowledge.

Equilibrium economics wasn’t intended to describe reality, but it is often asserted as the description of how individuals act in a decentralized market to maximal outcomes. Neoclassical economics takes this view as the axiomatic starting point for all other theories.

This sort of economic theory started as a first-draft approach that was buttressed by intellectual scaffolding (“assume perfect competition for now… we’ll deal with the real world when we understand the theory better…”), but instead of removing such unrealistic scaffolding, more and more was added, such that now, economics is even more divorced from the real world than ever before-more filled with arbitrary assumptions than previously-in order to satisfy the modern demand for logical cohesion.

“In fact, equilibrium theory has reached the stage where the pure theorist has successfully (though perhaps inadvertently) demonstrated that the main implications of this theory cannot possibly hold in reality, but has not yet managed to pass his message down the line to the textbook writer and to the classroom.”

… To be Continued …

Reading notes for Egalitarian Societies by James Woodburn, University of London.

• Egalitarianism is an enforced equality
• Individual ownership leads to greater wealth and wealth inequality
• Only Hunter-Gatherer societies permit realized egality, though non-hunter-gatherer societies may attempt it
• Hunter-Gatherer societies are bifurcated into Immediate Return and Delayed Return organization.  
  • Immediate Return societies use low-labor, high-skill tools and consume what is hunted or gathered nearly immediately with no complex food storage processes or structures
  • Delayed Return societies use limited-access, high-labor tools and have involved food-storage processes or structures, delaying the use of produce.
  • Most human societies are Delayed-Return societies

Systems and operations that give rise to Egality in Instant-Return Hunter-Gatherer Societies:

• Mobility and Flexibility 
  • Inter-camp movement is permitted with no economic penalty
  • Movement between camps is more than just ecologically-motivated.  It can be a means of escape of inequality and a leveling mechanism
  • Free movement reduces conflict and subverts the accumulation of wealth or authority
• Equal Access to Means of Coercion
  • Each (male) member has equal access to weapons and tools for hunting which can and are also used for assassination or coercion 
  • Accumulation of wealth is thwarted by the threat of envy
  • Provides universal, immediate, and direct access to social control, as opposed to social control institutions which dispense social control on behalf of an individual.
• Equal Access to Resources
  • Access to resources hunted, gathered, or immediately available is universal and equal
  • No member may withhold resources in equal share from any newcomer to the group
  • Ownership is discouraged as it leads to permanent associations which reduce equality
  • Boundaries necessarily lead to material inequality as resources move from one area to another or are depleted in one area over time.  Boundary-less occupation of the land reduces this source of inequality.
• Sharing
  • Boasting on the return of a hunt is discouraged.  The hunter is denied first-access to their kill to actively prevent a sense of privileged access to the resources
  • Societal values reinforce equality
  • Transactions are not forms of reciprocal exchange, but rather a form of taxation where the incomes of the successful are redistributed by the society.
• Sanctions on Accumulation of Personal Possessions
  • Above the requirement of a nomadic existence, even the accumulation of small, easily transported possessions is discouraged
• Fluid Transmission of Property Among Individuals
  • Mechanisms exists to fluidly circulated property among individuals rather than allowing specific people to accumulate specific property
  • The Hadza use a gambling game with randomized outcomes to redistribute valuable property among members.  
  • Winners are encouraged to gamble away proceeds and garnered items are expected to be exchanged in future gambling games.
  • This mechanism of exchange ensures that items available only in a particular place are semi-randomly distributed throughout the society.
  • In societies with non-random, formal exchange mechanisms, no individual is dependent on any specific other individual for subsistence.  
  • The inherent abundance and equality of distribution of wealth leads to very low values for goods, ensuring equality of access and discouraging accumulation

Other Notes:

• Equality arises from disengaging people from property and from the potential of accumulation to create dependency
• Equal, but not Egalitarian societies often exhibit competitive equality, where the individual must compete with others to maintain equal status.  Egalitarian societies assert an automatic entitlement which guarantees equality despite comparative advantage.
• Since Egality relies on discouraging accumulation, a transition to agriculture is difficult as agricultural production requires accumulation.