ABSTRACT
On the one hand, the neoclassical approach can be seen in at least two different perspectives: (i) the Walrasian approach and thus the idea that perfectly competitive markets via price fluctuations, are able, to achieve equilibrium, so that external interventions are counterproductive for the purpose of obtaining a Pareto-efficient allocation of resources;166 (ii) the so-called neoclassical synthesis, based on the idea that inefficient outcomes depend on market imperfections (such as incomplete information) and that the Keynesian view of the functioning of a market economy is simply a ‘special case’ of the neoclassical picture.167 In both cases, the following basic assumptions hold: (i) agents are rational, in the specific sense that they maximize a utility function – given their exogenous preferences – under the budget constraint (see Robbins 1932); (ii) market economies are not affected by uncertainty, and culture, instincts, habits and customs do not enter the analysis; (iii) scarcity of all resources affects agents’ behaviour, and it is because resources are scarce that agents have the incentive to use them more efficiently; (iv) individualism is accepted both on the methodological plane, – that is, individuals choose independently of the ‘social class’ they belong to – and on the moral plane (see later). For these reasons, one can consider the neoclassical view of economics to be axiomatic: agents behave in a similar way independently of the historical, social and institutional settings in which they live, consume, produce and save. Pier Luigi Porta and Roberto Scazzieri (2001, p. 10) see the neoclassical approach as ‘a pure logic of choice’:
following [the] dominant view, economics comes to distinguish itself [. . .] among the social sciences not for its subject matter but for its approach. It is straightforward to see that Robbins’s definition may in principle be suitable in describing any kind of human choice problem, whether economic or not.
