The frame of reference for new economic thinking

Leiashvily, Paata (2018): The frame of reference for new economic thinking.

Abstract

After the crisis of 2018-2010, which led to the complete discrediting of neoclassical theory, the demand for new scientific ideas and an alternative vision of the most fundamental economic problems has sharply increased in economic science. At the same time, the discrediting of the neoclassical theory led to a critical attitude to the very idea of a general economic equilibrium, which is the central idea of neoclassical paradigm. The emphasis is increasingly shifting to the creation of disequilibrium models of economy. This book argues that this approach is incorrect. The wrong is not the very idea of equilibrium, but its neoclassical understanding and its concepts and equilibrium models, which are caused by false methodologies of neoclassicists. Without a preliminary dialectic analysis of economic categories and the operationally closed model of commodity-money flows of a market economy created on its basis, it is impossible to find out feedbacks that ensure the self-regulation of the economic system. The “Symmetrical model” of general economic equilibrium, which shows how economic forces arise, where they are directed and how interact with each other, which provide the homeostasis of a decentralized economic system, is proposed. This model shows the attractor of a real disequilibrium economy. It is shown that the evolution of market economy, which due to the immanent logic of intrasystem processes generates extreme inequality in income distribution, leads to a disruption in the harmony and symmetry of counter flows of commodity and money, thus destroying the system of positive and negative feedbacks that provide the homeostasis of economic system. This book is a collection of articles. Since each of them is a complete whole, the reader can get acquainted with the articles in any sequence, but after reading all of the articles, he will get a new non-standard understanding of functioning of a market economy. Although each article gives a complete analysis of a specific topic, nevertheless, all of them are arranged in such a sequence that they serve as different stages in the development of a single original concept, beginning with a methodology and ending with a mathematical model of a general economic equilibrium.

• Item Type: MPRA Paper
• Language: English
• Keywords: economics, dialectics, market economy, cost, utility, economic equilibrium, mathematical model
• Subjects: A - General Economics and Teaching > A1 - General Economics > A10 - General; A - General Economics and Teaching > A1 - General Economics > A13 - Relation of Economics to Social Values; B - History of Economic Thought, Methodology, and Heterodox Approaches > B4 - Economic Methodology > B40 - General; D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D50 - General

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