[2] AmajortaskofeconomistssincethepublicationofTheWealthofNations, asHaroldDemsetz3hasexplained, , andindividuals, whofollowtheirowninterest, ’sresultsaretobeachievedandwhere, intherealworld, suchconditionsdonotappeartobefound, .
[3] , indeed, , myoldchiefandwonderfulhumanbeing, LionelRobbins4, wrote, inAnEssayonTheNatureandSignificanceofEconomicScience5, aboutthe “glaringdeficiencies” oftheoldtreatmentofthetheoryofproductionwithitsdiscussionofpeasantproprietorshipsandindustrialforms: “Itsuggeststhatfromthepointofviewoftheeconomist‘organization’ isamatterofinternalindustrial (oragricultural) arrangement —ifnotinternaltothefirm, atanyrateinternalto ‘the’ — therelationshipofpricesandcost...” Whatthiscomesdowntoisthat, inRobbins’ view, aneconomistdoesnotinteresthimselfintheinternalarrangementswithinorganizationsbutonlyinwhathappensonthemarket, ’ attitudebutitisundeniablethatmicroeconomics6islargelyastudyofthedeterminationofpricesandoutput, indeedthispartofeconomicsisoftencalledpricetheory.
[4] Thisneglectofotheraspectsofthesystemhasbeenmadeeasierbyanotherfeatureofmoderneconomictheory — thegrowingabstractionoftheanalysis, whichdoesnotseemtocallforadetailedknowledgeoftheactualeconomicsystemor, atanyrate, ?m7andTirole8, writingonTheTheoryoftheFirmintherecentlypublishedHandbookofIndustrialOrganization9, concludeattheendoftheirarticleof63pagesthat “theevidence/theoryratio...iscurrentlyverylowinthisfield.” .
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