Perfectly elastic collisions and point masses are also impossible, but that doesn’t stop physicists from using them in their models sometimes. A simplification can be theoretically useful even if it can’t exist in reality, especially when you’re studying something as complicated as markets.
And perfect competition does have desirable qualities, it (along with some other conditions) allows for maximum allocative efficiency, meaning that all goods and services are held by the people who value them the most.
And utility incomparability is not a big problem for Pareto efficiency, as its not that hard (at least conceptually) to work out whether someone is better or worse off. The incomparability of utility functions is a problem for Kaldor-Hicks efficiency, but that’s not what we’re talking about here.
I reject the coherence of neoclassical modeling. I am a definite Misesian in this vein. Predictability and meaningless non-economic situations have nothing to do with the real economy, and have no impact on helping us to understand the real economy (except as counter-factuals, to isolate certain elements, but then they are counter-factuals and ONLY counter-factuals).
Perfectly elastic collisions and point masses are also impossible, but that doesn’t stop physicists from using them in their models sometimes. A simplification can be theoretically useful even if it can’t exist in reality, especially when you’re studying something as complicated as markets.
And perfect competition does have desirable qualities, it (along with some other conditions) allows for maximum allocative efficiency, meaning that all goods and services are held by the people who value them the most.
And utility incomparability is not a big problem for Pareto efficiency, as its not that hard (at least conceptually) to work out whether someone is better or worse off. The incomparability of utility functions is a problem for Kaldor-Hicks efficiency, but that’s not what we’re talking about here.
I reject the coherence of neoclassical modeling. I am a definite Misesian in this vein. Predictability and meaningless non-economic situations have nothing to do with the real economy, and have no impact on helping us to understand the real economy (except as counter-factuals, to isolate certain elements, but then they are counter-factuals and ONLY counter-factuals).