Saving "the Market” out of Cambridge: “Marginality”

 

Have you ever been interested in one tenth a piece of sushi? Have you ever gotten one thousandth of Domino’s pizza doggy-bagged? Have you ever had a half bottle of Hermes gift-wrapped? Have you ever seen half a Mercedes driven on the road?

             If ever, that was not in this world. Incidentally, there is a story in the East about a village dwelt by half the creatures. There you go! You see half a wild cat and half a stray dog strolling in the community. Fairly fairy-tale-like!

             By now, it is apparent that the “marginal unit” as called in economics represents the smallest working unit. Never, a tenth, a hundredth, not to mention the infinitesimal. I am two hundred percent sure that my demand curve in the market for whatever is discrete, way beyond mathematical differentiation. Water? Well, I always and everywhere buy it bottle by bottle. Home, I pay for tab water in CC. How about you? Must be the same!

             Some of you might hint at “fallacy of composition” of Paul Samuelson. Well, she is “barking up the wrong tree” in J.M. Keynes’ words. The term never applies to the market: as each trades in the working unit, so must the whole do. The demand and the supply curves shall be discrete, period.

             More simply, the curve cascades up or down. On the flipside, all that we can do at the end of the day is aggregation in economics jargon, never integration in mathematics jargon., of the quantity traded. Seems trivial but never so. Aggregation of apples as traded does not make any change in the quality of apples: Apples remain apples. On the contrary, integration makes apples “squared” if in mathematics.

             By construct, you have also to square the metric of counting apples. If so, apples sold in the square of units? The square of kg, pound, dozen or score? Please Do Not Annoy or Tease the MINI. Me, neither.

             In conclusion, beware not to overuse, misuse or abuse the innocent mathematics! In the first place, mathematics is invented for the only sake of calculation convenience. Mathematics is one science is another in the 21^st century, at least and at the latest.

             Amazingly, graceful or otherwise, certain macroeconomists in Cambridge propose “fixed supply,” as a tip of the corrupted iceberg. How in the world could supply be fixed? Mon Liza? Rooms for rent in Manhattan?

             Between you and me, they do not even differentiate the asset as of a moment (“stock”) from its service over the accounting period (“flow”). No matter how versatile in mathematics may they be, they seem to be short of common sense.

             A stock market? When in Economics don’t even think about it!