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  • Print publication year: 2009
  • Online publication date: June 2009

7 - Hicks and the emptiness of general equilibrium theory


The ontology of general equilibrium

In his great classic work Value and Capital, John Hicks claims that static general equilibrium theory is somewhat sterile (see Bliss, 1994: 87–8). What did he mean by that, and how did he propose to deal with the problem? Before elaborating Hicks's particular answer to my question – which answer, I argue is not correct – I exposit a broader account of the emptiness of general equilibrium theory.

Bologna, which hosted the Hicks anniversary conference, was the home of some of the finest medieval philosophy. And a good starting point for me is the famous ontological proof of the existence of God. Put very simply, this argument claims that there must exist a perfect being – identified as God – because non-existence would be an imperfection, for which reason God must exist. I cannot detail here the numerous problems with the ontological argument. Thomas Aquinas was unconvinced. Bertrand Russell pointed out decisively that existence is not a predicate. It is not a property of an entity, as having one horn is for the unicorn, despite that poor creature being poorly endowed where existence is concerned.

I want to focus here on a secondary difficulty with the ontological proof. Even if one were to accept the proof, we are not told much about the God whose existence is demonstrated. He (though it might be she, or neither he nor she) is perfect, which is hard to visualize, and – that apart – exists.