The world is full of surprises, a fact with which rational-expectations theorists have not yet come to grips. Yesterday I was surprised to find that a post of mine from May 2016, was attracting lots of traffic. When published, that post had not attracted much attention, and I had more or less forgotten about it, but when I quickly went back to look at it, I recalled that I had thought well of it, because in the process of calling attention to Wicksteed’s anticipation of the Coase Theorem, I thought that I had done a good job of demonstrating one of my favorite talking points: that what we think of as microeconomics (supply-demand analysis aka partial-equilibrium analysis) requires a macrofoundation, namely that all markets but the one under analysis are in equilibrium. In particular, Wicksteed showed that to use cost as a determinant of price in the context of…
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Utopia, you are standing in it! 
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