ABSTRACT
This chapter investigates some highly oversimplified economic systems to see what we can learn from them. It shows that the neoclassical mechanism of supply and demand can be bypassed in favor of a much simpler procedure, for the purpose of determining prices in the steady state. The chapter points out that this procedure must be modified when steady-state conditions do not obtain, i.e., for dynamic economics. The Sraffa example is most important in warning against asking for superfluous information. The information requirement of neoclassical theory is so enormous that it is hardly ever fulfilled even for the steady state. The chapter intends to relate the purely mathematical models of the earlier sections to possible historical or quasi-historical societies, so as to investigate the reasonableness, or otherwise, of our initial assumptions. The mechanism for maintenance of the “right” prices is therefore more than a bit disconcerting: the economy does not correct itself; it simply runs down to starvation point.
