Saving “the Market” out of Cambridge: “Alice in Wonderland”
Two millennia and a half ago, the great Chinese teacher Confucius preached, “Masters shall get the names correct before leading people” ( 正名 , zhèngmíng ). This maxim could not be more relevant as regards macroeconomic theories of today. The unfortunate facts of macroeconomics includes an abundancy of misnomers and miscomprehension of names in other disciplines, classical economics included. With so many misnomers and misuses, macroeconomics naturally misleads people, “endogenous” or “exogenous.” Mainstream macroeconomists seem at best to be masters in name only. For instance, “equilibrium,” general or otherwise, is for mechanisms, never for organisms. In every sense, ether the market or the economy is an organism The “marginal unit” must mean a small but accountable unit o...