To say that economic theory provides a framework rather than precise predictions is not to damn it with faint praise. Darwin’s theory of natural selection, long regarded as one of the great scientific insights of all time, does not provide precise theoretical predictions either. It, too, is a loose theory, a framework that helps us think about and describe important phenomena. Finally, it should be emphasized that our focus here is on American society in the second half of the twentieth century. We do not need to face the question of how well the universalist assumption would hold if we were simultaneously trying to explain behavior in classical Athens, medieval England, and the contemporary Kalihari desert.
With these qualifications in mind, we can return to the economic perspective and look at its most important application-the market paradigm.