| An ideal type, as I explained, is a construct that we apply aginst empirical reality to aid interpretation, understanding, analysis and critique. As I said in my original post, it does not imply anything about this is the way things should be (my exact words were to exclude: "any moral or instrumental value". It says this is the way the theory described the phenomena in question -- the ideal type allows you to compare it to reality. Libtertarian economics is the school of thought that applies pure market concepts to the real world as being the best way to operate. An ideal type analysis would reveal very quickly the problems that this approach is going to encounter (by highlighting the areas where real markets are different from perfect competition). Most schools of modern economics focus on how to model markets where the assumptions of perfect competition do not apply. It was also the basis upon which Marx developed his critique of capitalism and developed the concepts of Marxism. |