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A First Idea from Schmid. Knowledge, psychology and power

Schmid believed that institutional analysis must include knowledge, psychology and power.  He took some of these original ideas from Vilifredo Paerto's writing.  Schmid states that neoclassical economics has been very narrowly focused on knowledge via knowing cost and productions functions and psychology via use of the consumer utility function. He states that power is rarely if ever addressed in neoclassical economics and the only real issue of concern is monopoly power and concentration of the ownership of resources.  Schmid believes that human interdedpendence is much richer and more interconnected that simply monopoly power.  his analysis will focus on the issue of power because it has been neglected in traditional analysis.  Schmid also wants to expand our understanding of how knowledge and psychology are used in analysis. He writes that "rights and rules govern access to and use of power" (pg. 6)

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