ABSTRACT
Theorists tend to analyze what can be understood with the methods available, and,
unfortunately, this may lead to concentrating on less important but more tractable
questions at the expense of what really counts. This is not just another recital of the
familiar complaint that economic theory is ‘unrealistic’. In a certain sense any theory is
necessarily unrealistic; theories have to leave out the inessentials and abstract from detail.
The problem here is that what has been left out is neither inessential nor a detail. It is an
