The Demise of Neo-RealismDr Abdalla E. Sidahamed, Minerva Press, £12.99
In writing The Demise of Neo-Realism the author attacks the microeconomic origins of the theory of neo-realism defined by Dr Kenneth Waltz.
Knowing nothing about Waltz or his theories it is difficult to judge the truth of this criticism. However, the work throws light on the utility of theories in the world of academia. As Dr Sidahmed says: “Theories always incapacitate each other. They die due to time's passage, advancement in knowledge, the nature of new problems and man's brain development.
In examining the way governments fund public services and transport in particular, he asserts that government funding encourages the public to feel they shouldn't pay for something that is for the public good. This, he says, describes the behaviour of consumers of collectively consumed goods and explains why the financing of such public goods on a private payment basis is so difficult to achieve, and gives rise to the question of how authorities can properly fund services economically without limiting access. This sort of debate gives birth to economic theory, and Dr Sidahmed attempts to bury the ageing theory of neo-realism. But wherever economists are attracted to justice and prosperity in economic dealings, they look not for ever-changing theories but immutable principles such as those Henry George bequeathed to the world.
When David Ricardo was challenged by Thomas Malthus to justify his opposition to the theory that population always tends to outrun the means of subsistence, he said: “It appears to me that one great cause of our difference in opinion on the subjects which we have so often discussed is that you have always in your mind the immediate and temporary effects of particular changes, whereas I put these immediate and temporary effects quite aside, and fix my whole attention on the permanent state of things which will result from them. Perhaps you estimate these temporary effects too highly, whilst I am too much disposed to undervalue them.*
This argues for a balanced view of economics and is a point that the theorists of our time would do well to assimilate. It suggests the need for a new kind of realism in a subject that has suffered too much from shifting theories in preference to unchanging principles of the kind that guided George.
*John Maynard Keynes, Essays in Economics, Thomas Robert Malthus, Royal Economic Society Edition, 1972.
John D Allen
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