The principles of economics

Should we accept the principles of neoclassical economics? This book attempts to develop effective critiques of neoclassical economics and is primarily directed towards the neoclassical economist. It is marked by a Socratic sense of the importance of criticism as a tool for enhancing understanding. The focus of the critiques is the foundations of neoclassical theory, beginning with those Alfred Marshall called the 'Principles of Economics'. Professor Boland explains why it would be futile to base critiques on this assumption. However, the lesser known 'Principle of Continuity' is shown to be more important because it can be a more rewarding target of criticism.

Static neoclassical models typically ignore matters of continuity and instead substitute questions surrounding the existence of a general equilibrium solution. Modern criticism of neoclassical economics is concerned with the necessary conditions for the existence of a general equilibrium. Can general equilibrium models which assume perfect competition be plausible representations of reality? Unfortunately, we cannot simply append the assumption that firms are imperfectly competitive to produce models that are any more plausible.

The Principles of Economics demonstrates that there is still much work to be done to make neoclassical economics more realistic. Much of what needs to be done can be easily understood by today's students. The appropriate beginning is honest but constructive criticism of the principles of economics.