Evolution And Comparison About Cognition And Processing Methods On Time Dimension Between Neoclassical Economics And Evolutionary Economics

Time is the basic dimension of human existence, with people’s economic behaviorsand various economic phenomenon closely linked. How to handle the time dimension isa basic problem that any kind of economic analysis must confront. Compared with otherproblems, the problem of time dimension has its particularity. People never form aunified view on time dimension through the ages. There are many different views andprocessing methods on time dimension in the history of economics. Based on the divisionof equilibrium analysis paradigm and evolution analysis paradigm, the paper summarizesand tries to find out the evolution clues about these different views and processingmethods on time dimension in the history of economics, and makes a comparative studyof these different views and processing methods on time dimension in each of the basicparadigm and between them.Rooted in the philosophy foundation of reductionism and mechanical determinism,orthodox neoclassical economics perceives time dimension as absolute time dimensionlike in Newton’s classical physics. The peculiarities of this view of time dimension aresubstantive, homogeneous, symmetrical and reversible. Based on this cognition, the basicmethods of disposing the time dimension of the neoclassical economics are staticanalysis and dynamic analysis. Static analysis could be completed without thinking aboutthe time dimension because it only pays attention to the equilibrium and the conditions ofachieving the equilibrium. Dynamic analysis focus on the process of changes of theequilibrium, time must be treated as an argument and be a part of the dynamic analysis.However, time is just a parameter to show continuity here just like when we investigatethe change process of the rigid body in Newton’s classical physics.General equilibrium analysis of Walras and partial equilibrium analysis of Marshallare both paragons of static analysis. Sweden school put forward the difference betweenthe ex ante and ex post, emphasized the important role of the prospect and suggested touse plan to link the past and the future. Hicks designed a new set of processing timemethod based on three concepts: week, plan and prospect.Samuelson put forward the corresponding principle, and illustrated the relation between static analysis and dynamic analysis, and pointed out that the economic systemmay occur as six kinds of form through the analysis of the causal system and historysystem. Namely: static-stabilizing system, static-history system, dynamic-causalsystem, dynamic-history system, random-history system and random-causal system.Lucas suggested that unforeseen changes in the money supply would impact oneconomic system in short-term period and the economy would be stable in long-termperiod in the equilibrium state which is determined by the natural rate. Prescott suggestedthat economic fluctuations are pareto optimality reaction when rational people meettechnology impact, therefore, the division of short term and long term is abandoned.In Walras and Marshall’s theory, equilibrium analysis paradigm got its completeform, their understanding and processing methods of time dimension also laid a solidfoundation for subsequent economists. In order to develop a more dynamic and moresophisticated economic model, the later economists have developed a lot of processingtime means. Like equilibrium analysis paradigm, evolution analysis paradigm has a longhistory, but the modern evolutionary economics didn’t appear until the end of thetwentieth century. Before this, Marx, Menger, Veblen and Schumpeter’s certain parts ofthe economic theory and the method of their understanding and the processing time had afoundational role for the birth of modern evolution economics. Here at them, we can findvery different from under equilibrium analysis paradigm for understanding andprocessing time. Due to different philosophy, in fact, their understanding of time andtreatment is of distinctive.Marx distinguished between the natural time and social time, and emphasizedpractice activities are the innate character of the social time. Time is the core of Marxismanalysis category, on macroscopic level, Marx’s view of time always show that match thedevelopment of history and hierarchical structure. And on microscopic level, Marxpointed out that the essence of the exploitation of the laborer by the capitalists was thepossession of the employee’s free time.Menger emphasized the important effect of time in the economic analysis by theinfluence of Kant’s philosophy. In the analysis of the Austrian School, the passage of timeand the appearance of knowledge, the development of organization and system with thepassage of time occupied the most significant position. Veblen emphasized the importance of history, evolution, growth, change andcumulative changes. In Schumpeter’s dynamic picture of capitalist economy, behaviorsubject, events and time were linked closely. Entrepreneur’s innovative behavior broughtfundamental changes, so time was irreversible and history was important.The philosophy foundations of the evolution economics are level ontology andindeterminism. Contrary to the neoclassical economics, the evolution economics deemsthat time is objective, heterogeneous, asymmetric and irreversible. Based on thiscognition, the evolution economics emphasize historical analysis and process analysis;emphasize to use historical comparison and backtracking method to seek the causalassociation behind the economic phenomenon.The sponsor of the modern evolution economics, Nelson and Winter, built a set ofevolution theory about economic transition, in their theory, the enterprise evolutiontheory and the growth evolution theory were described as a Markov process, a period ofthe state decided the probability of the state of the next period. Hodgson studied theproblem of history features. The evolution of development economics emphasize the useof historical analysis, backtracking method and pay attention to cumulative causal way tograsp the economic law.If we use equilibrium paradigm to analysis the economic problem, the advantage iswe can describe the relationship between the variables accurately through elaboratemathematical model and put forward specific policy which is easy to implement. And ifwe use evolution paradigm to analysis the economic problem, the advantage is we canprovide deeper insight into the process of economic operation.