nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2014‒03‒22
seventeen papers chosen by
Carlo D'Ippoliti
La Sapienza University of Rome

  1. On Ricardo and Cambridge By Geoff C. Harcourt; Peter Kriesler
  2. Keynes, Kalecki, Sraffa: Coherence? By Neil Hart; Peter Kriesler
  3. Beyond Extended Phenotype Evolution of extended identity in order to reconcile study of humanity with biological evolution By Mezgebo, Taddese
  4. La critique saint-simonienne de la secte des économistes : un positionnement original By Michel Bellet
  5. How to guide the economy towards socially desirable directions ? Some institutional lessons from the 2007 financial turmoil By Faruk Ülgen
  6. Constructivisme social, évolution de la profession d’économiste, et projet pour sa réforme radicale By Yefimov, Vladimir
  7. ‘Cold, Calculating Political Economy’: Fixed costs, the Rate of Profit and the Length of the Working Day in the Factory Act Debates, 1832-1847. By Toms, Steven
  8. An unexpected discovery: Johann Heinrich von Thuenen and the tragedy of the commons By Nellinger, Ludwig
  9. The Rhetorical Structure of Adam Smith’s Wealth of Nations (and the importance of acknowledging it) By Andreas Ortmann; Benoit Walraevens
  10. Gender Role Identity, Breadwinner Status and Psychological Well-being in the Household By Heather Brown; Jennifer Roberts
  11. Global Oriental Management: Transforming Capitalism and Maximizing Well-Being through Value-Oriented Leadership, Smart Marketing, Social Innovation and Sustainable Business Development By Josep Maria Coll
  13. Production theory: accounting for firm heterogeneity and technical change By G. Dosi; M. Grazzi; L. Marengo; S. Settepanella
  14. Economy as the value streams. Preliminary study. By Góralczyk, Andrzej
  15. Innovation and cognitive distance within a community of practice: an agent-based model By Widad Guechtouli
  16. Effective Transfer Entropy Approach To Information Flow Between Exchange Rates And Stock Markets By Ahmet Sensoy; Cihat Sobaci; Sadri Sensoy; Fatih Alali
  17. The Truly General Theory of Employment: How Keynes Could Have Succeeded By Kakarot-Handtke, Egmont

  1. By: Geoff C. Harcourt (School of Economics, Australian School of Business, the University of New South Wales); Peter Kriesler (School of Economics, Australian School of Business, the University of New South Wales)
    Abstract: David Ricardo’s key place in the history of economic thought is well established. However, both the understanding of his Principles of Political Economy and Taxation and its role in the development of economic analysis is much more controversial. Cambridge economists have contributed significantly to both of these issues. They have played an important part in two extremely divergent interpretations of Ricardo’s place in the development of economic thought. Understanding how Ricardo has been viewed in Cambridge does not result in homogeneity, but in a spectrum of interpretations. In this paper, we focus on the role of Ricardo’s Principles in the development of economics as seen by Cambridge economists.
    Keywords: Ricardo, Cambridge School, History of economic thought, short period, long period
    JEL: B12 B20 B41 E10
    Date: 2014–01
  2. By: Neil Hart (Industrial Relations Research Centre, the University of New South Wales); Peter Kriesler (School of Economics, Australian School of Business, the University of New South Wales)
    Abstract: This paper, in honour of John King, addresses the question raised by him in his A History of Post-Keynesian since 1936, reflected in the title. Initial surveys of post-Keynesian economics defined it in term of the Keynesian, Kaleckian and Sraffian strands. However, subsequently, it has become less clear that the Sraffian stream should be included under the ‘broad church’ known as post-Keynesian economics. Serious and irreconcilable methodological differences exist between Sraffians and post-Keynesians about the validity of comparisons of long-run equilibrium positions, the role of historical time and the importance of uncertainty.
    Keywords: Keynes, post-Keynesians, Sraffians, methodology, path determinacy, traverse
    JEL: B2 B41 B5 D4 D5
    Date: 2014–01
  3. By: Mezgebo, Taddese
    Abstract: The question: “How much of biological evolution based theories, as they are understood presently, apply to human behaviour?” is highly controversial and perhaps highly politicized as well. The inference that human beings are evolutionarily programmed to have urges toward aggression, rape, murder, adultery, genocide and so on is a politically rejected idea within the social sciences. To be politically correct those who use evolutionary framework do claim that people can learn or have capacity for self restraint. However it is not clearly understood, how such restraint can possibly evolve within the evolutionary framework. This paper argues that the missing link that explains such behavior is the concept of extended identity. How extended identity can evolve, following the framework of selfish gene, is explained by integrating theories related to selfish gene, institutional analysis, information economics and social capital literature. Archaeological evidence from evolutionary cognition is also used to show that such evolution could happen 4 million years ago (MYA).
    Keywords: extended identity, extended phenotype, selfish gene, asymmetric information, evolution, trust, social capital, imperfect information
    JEL: B52 J1 P00 Z10 Z13
    Date: 2014–03–13
  4. By: Michel Bellet (GATE Lyon Saint-Étienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure (ENS) - Lyon - PRES Université de Lyon - Université Jean Monnet - Saint-Etienne - Université Claude Bernard - Lyon I)
    Abstract: L'antiphysiocratie des saint-simoniens peut paraître assez naturelle. En effet, une doctrine saint-simonienne réputée pour son industrialisme utopiste ne pouvait, semble t-il, que s'opposer à ce que Smith a appelé le "système agricole". Cette interprétation, sans être totalement erronée, est une réduction abusive du point de vue saint-simonien. En effet, si, au début du XIXème siècle, les saint-simoniens peuvent être rangés dans la catégorie des "néo-smithiens" qui réfutent la thèse selon laquelle la terre est à l'origine de la richesse, ils le font à partir d'une approche spécifique, opposant oisifs et travailleurs. Cette partition modifie les débats classiques concernant le rôle des diverses classes et des revenus qui y sont associés, tout en légitimant un programme anti-physiocrate, opposé au rôle économique et politique des propriétaires fonciers. Pour autant, les saint-simoniens ne se contentent pas de cette opposition : ils soutiennent la méthode de Quesnay et sa définition de l'économie politique. Selon eux, il faut raisonner à partir d'un système, et une philosophie générale des rapports sociaux doit précéder la science des richesses. Même si la nature de cette philosophie diffère (droit naturel vs évolutionnisme historique et physiologique), cette communauté de vue revendiquée concernant la méthode et le refus d'autonomie de l'économie politique conduit les saint-simoniens à une définition et un usage originaux de leur antiphysiocratie, dans le contexte du premier tiers du XIXème siècle.
    Keywords: Physiocracy; Quesnay; Saint-Simonism; Post-Smithian Theory; System
    Date: 2014–03–06
  5. By: Faruk Ülgen (CREG - Centre de recherche en économie de Grenoble - Université Pierre-Mendès-France - Grenoble II : EA4625)
    Abstract: This article maintains that capitalist market economies have a threefold composite characteristic (the central role of money and financial relations, the crucial role of institutional patterns, and the macro nature of stability and viability concerns) that makes social control a consistent way of designing an efficient macro environment. Institutional economics precisely relies on such a triptych and reveals to be an appropriate theoretical and practical reference to deal with today's major economic issues such as the 2007-08 systemic crisis. Therefore the article suggests an institutional analysis that points to the role of institutional-regulatory framework and the rationale of social control principles in the stabilization of the working of capitalist finance. It then advocates for an alternative organization of the banking and financial system in order to ensure systemic sustainability and to guide the economy towards socially efficient directions.
    Keywords: capitalist market economy ; financial instability ; institutions ; money ; regulation ; social control
    Date: 2014–01–03
  6. By: Yefimov, Vladimir
    Abstract: This paper proposes to reconsider the methodology (in the first part of the paper) and the history (in the second part of the paper) of economics on the basis of the constructivist institutionalism practiced at present in political science. In the third part of the paper a project for the economics profession is presented, which I call discursive troika. Economics, as Discursive Troika, is an inquiry, a policy development activity and a social philosophy. All of them must be based on discursive ontology, so economics, as an investigative activity, represents discourse/text analysis, and this is the first element of the discursive troika. The second element of the discursive troika is policy development activity in the framework of discursive or deliberative democracy. The necessary condition of the efficiency of this type of policy development is argumentational integrity of participants, which is linked with the third element of the discursive troika called discourse ethics. Without deliberative democracy there is no demand by the public for non-deviated inquiry and no large-scale supply of research by economists, as they will not be given the opportunity to conduct their research-investigation. Neither discursive inquiry nor deliberative democracy is possible without discourse ethics.
    Keywords: constructivist institutionalism, discursive troika, discourse/text analysis, deliberative democracy, discourse ethics
    JEL: A11 A13 A14 B0 B4
    Date: 2014–02–10
  7. By: Toms, Steven
    Abstract: The paper re-analyses the evidence presented by pro and anti-regulation interests during the debates on factory reform. To do so it considers the interrelationship between fixed costs, the rate of profit and the length of the working day. The interrelationship casts new light on the lobbying positions on either side of the debate. It does so by comparing the evidence presented in the debates before parliament and associated pamphlets with actual figures contained in the business records of implicated firms. As a result the paper identifies the compromise position of the working day length compatible with reasonable rates of profit based on actual cost structures. It is thereby able to reinterpret the validity of the claims of contemporary political economy used to support the cases for and against factory regulation.
    Keywords: Factory Acts, working hours, rate of profit, cost structure, accounting records
    JEL: J21 J31 L50 L67 M4 N4 N44 N8 O14 O15 O38
    Date: 2014–03–13
  8. By: Nellinger, Ludwig
    Abstract: William Forster Lloyd's 1833 sketch about poor cattle on the commons and the well-fed animals on the adjacent enclosures published in his 'Two lectures on the checks to population' has hitherto been assessed as one starting point of the economics of renewable resources. In the 20th century the question of the use of common property resources has initially been treated by fisheries economists, at first in unknown publications of Jens Warming in 1911 and 1931, and after a disruption of more than 40 years starting again with the contributions of Gordon and Scott in the 1950s. Important results have been the derivation and presentation of the economic criteria for the open access equilibrium case on the one hand and the private property equilibrium case on the other hand. Garrett Hardin's well known 1968 Sciences article brought a new title and increased awareness to the 'tragedy of the commons' and Elenor Ostrom's 2009 nobel prize in economics finally underlined the importance as well as the diversity of institutional rules to achieve an efficient use of the natural resources - challenging the favored liberal concept of a privatization of scarce resources. Johann Heinrich von Thuenen's contributions on the commons - hidden in an 1831 article about urban agriculture in the journal 'Neue Annalen der Mecklenburgischen Landwirtschaftsgesellschaft' and in an unpublished manuscript - have been totally neglected until now, although he published his article about the core problem of the commons two years earlier than William Forster Lloyd and almost in the clarity of the fisheries economists 80 resp. 120 years later. He not only presented the correct allocation criteria for both property rights scenarios but additionally developed a framework a) how to gain the maximal rent of a resource through an auction system - drafting the first demand table b) how to redistribute the gains to the communal property owners - developing an adequate compensation mechanism c) and finally how to establish this institutional innovation democratically - thereby applying important elements of Elenor Ostrom's Common Property Rights Framework. Due to these contributions Johann Heinrich von Thuenen deserves the title of the founder of the economics of renewable resources. Moreover, in combination with his publications on forestry, land use, soil improvement and agricultural processing industries he should also be seen as the creator of a discipline which got its name but now, the creator of bioeconomics. --
    Keywords: bioeconomics,economics of renewable resources,tragedy of commons,fisheries economics,urban agriculture,factor demand table,auction system
    JEL: B13 B15 B16 Q15 Q21 Q22 Q24
    Date: 2014
  9. By: Andreas Ortmann (School of Economics, Australian School of Business, the University of New South WalesAuthor-Name: Craig Freedman); Benoit Walraevens (Centre for Research in Economics and Management,Université de Caen Basse Normandie)
    Abstract: Analyzing the rhetorical structure of The Wealth of Nations (Smith WN) and its context, we make the case for the central importance of its Book V, "Of the Revenue of the Sovereign or Commonwealth”, which tends to be neglected in most accounts of Smith’s oeuvre (even, most recently, Phillipson 2010; see Ortmann & Walraevens 2014) but which in our reading is, rather than a general treatise on optimal taxation and spending, a book focused on the future of an empire being threatened by a Mercantilist system. The Empire in question was, of course, the British one. Book V follows Book IV, in which Smith -- after having documented the slow and unnatural progress of opulence in, among others, England and Scotland in Book III – had undertaken a “very violent attack” (Smith EPS p. 208; Smith Corr., p. 251) on those responsible for the low growth rates (“opulence”) in Scotland and, even more, England: manufacturers and merchants and those politicians who propagated Mercantilist philosophies and practices of the commercial class. Aware that those he targeted would not take kindly to the attack, Smith made his case against the Mercantilist system as well as its colonial policy by marshaling his earlier insights into rhetorical theory and practice. We explain why and how he organized his attack.
    Keywords: Adam Smith, The Wealth of Nations, rhetoric, rhetorical structure of The Wealth of Nations
    JEL: B10 B12 C70 C72
    Date: 2014–01
  10. By: Heather Brown (Institute of Health and Society, Newcastle University, UK); Jennifer Roberts (Department of Economics, University of Sheffield, UK)
    Abstract: It is only recently that the psychological concept of identity has entered economic discourse. This paper is concerned with an important aspect of social identity - gender roles within couples. We explore the extent to which compliance with this identity influences individual utility. We consider gender roles and attitudes in a sample from the British Household Panel Survey, within a framework that controls for individual heterogeneity. Our work offers some support for the identity model. Women in 'traditional' marriages who accept this role have improved well-being. In couples with 'modern' views, women who earn more than their husbands and still have to do most of the domestic work, have lower well-being; this persists if they work part-time and if they report no time pressures. Men who hold traditional views have lower well-being if their wives work; and men who hold modern views on gender roles only have higher well-being if their wives are the higher earner but only work part-time. Our results have implications for the validity of traditional household bargaining models which are largely gender neutral.
    Keywords: social identity; gender roles; household; well-being; panel data
    JEL: D1 J16 Z13
    Date: 2014–03
  11. By: Josep Maria Coll (Dr. Josep Coll, Senior Expert and Project Evaluator for the European Commission in Economic Development)
    Abstract: Business needs to unleash its full potential to contribute to social and environmental challenges, and to increase global well-being. A simple idea that still clashes with mainstream capitalism and its ‗business as usual‘ practices. Grounded in indigenous oriental knowledge, this paper uncovers a comprehensive holistic human-centered worldview that drives higher purpose maximization through sustainable business and management development. Taoist Yin-Yang and the Five Elements theories, along with Zen Buddhism main principles and western-based management models, provide a comprehensive framework to lead conscious businesses through value-oriented strategies. They coach a balanced relationship among corporate‘s dynamic processes putting leadership, marketing, innovation and finance at the service of a spiritual-wise business model. This is devoted exclusively to lead organizational transformation, marketing social change and render positive externalities. This paper is not only about showing that there is more to business than making money, it rather seeks to bring to the debate the personal, organisational and systemic transformational power of business when it is based in values and human-centred models that raw upon ancient human knowledge.
    Date: 2014–02
  12. By: Galbreath, Jeremy
    Abstract: This is the first known large-scale study in the literature to examine women in the wine industry. By investigating the top wine-producing states in Australia and using a unique database, women across CEO, winemaker, viticulturist, and marketing roles are tracked for the years 2007-2013, resulting in 16,763 firm year observations. By relying on social identity theory, a hypothesis is put forth that women’s representation in top roles is actually less than predicted. The hypothesis is confirmed. A hypothesis is also posited that women in South Australia have higher representation in top roles than women in any other wine-producing state. The hypothesis is partially supported. Finally, this study hypothesizes that were a wine firm has a woman CEO, the likelihood of women representation in the other roles studied increases, which finds support. The results are discussed, along with future research directions and limitations.
    Keywords: Australia, gender diversity, social identity, women, wine, Agricultural and Food Policy, Farm Management,
    Date: 2014–02
  13. By: G. Dosi; M. Grazzi; L. Marengo; S. Settepanella
    Abstract: The paper presents a new framework to assess firm level heterogeneity and to study the rate and direction of technical change. Building on the analysis of revealed short-run production functions by Hildenbrand (1981), we propose the (normalized) volume of the zonotope composed by vectors-firms in a narrowly defined industry as an indicator of inter-firm heterogeneity. Moreover, the angles that the main diagonal of the zonotope form with the axes provide a measure of the rates and directions of technical change over time. The proposed framework can easily account for n-inputs and m-outputs and, crucially, the measures of heterogeneity and technical change do not require many of the standard assumptions from production theory.
    JEL: D24 D61 C67 C81 O30
    Date: 2014–03
  14. By: Góralczyk, Andrzej
    Abstract: Economy can be generally described as a bunch of value streams. At least a part of capital accumulation is assumed to be the consequence of value stream blockage, and a means too keep such blockage. Negative relation between capital accumulation and foreign trade balance coming out from this assumption is supported by the data from national accounts, and hence justify the idea of economy as the value streams. A lot of research ideas are following this assertion, most of them promising results useful for socio-economic policies, and for optimizing institutions and business practices in order to make them more conductive to capital flows.
    Keywords: value streams, economic stability, economy growth, economic shocks, scaling in economy
    JEL: A10 A12 B00 B50 C00 C50 E20 F01 O10 Y20
    Date: 2014–03–17
  15. By: Widad Guechtouli
    Abstract: The development of New Information and Communication Technologies (NICT) in particular brought considerable changes in the management of codified knowledge. Nevertheless, the management of such a capital quickly appears problematic. In fact, a great quantity of knowledge is not transmitted this way; it is rather diffused by means of social interactions. We focus here on communities of practice and wish to know what impact does the cognitive distance that may exist between different members of a community have on the process of knowledge creation. We use agent-based modelling and preliminary results show that the cognitive distance that may, or may not, exist between the different members of a community does not seem to have an impact on the process of knowledge creation.
    Keywords: innovation, knowledge, cognitive distance, agent-based simulations
    Date: 2014–02–25
  16. By: Ahmet Sensoy; Cihat Sobaci; Sadri Sensoy; Fatih Alali
    Abstract: We investigate the strength and direction of information ow between exchange rates and stock prices in several emerging countries by the novel concept of effective transfer entropy (an alternative non-linear causality measure) with symbolic encoding methodology. Analysis shows that before the 2008 crisis, only low level interaction exists between these two variables and exchange rates dominate stock prices in general. During crisis, strong bidirectional interaction arises. In the post-crisis period, the strong interaction continues to exist and in general stock prices dominate exchange rates.
    Keywords: Effective transfer entropy, symbolic encoding, information theory, exchange rates, stock markets
    Date: 2014–01
  17. By: Kakarot-Handtke, Egmont
    Abstract: There is not much use to attack standard economics because deep in his heart the representative economist long knows that he is tied to a degenerating research program. The problem is, rather, that it seems to be exceedingly difficult to build up a convincing alternative. Keynes, for one, tried and was successful – albeit not fully. Unfortunately, he got some basics wrong. The conceptual consequence of the present paper is to discard the accustomed subjective-behavioral axioms and to take objective-structural axioms as the formal point of departure for the analysis of employment as the main practical issue of economics.
    Keywords: new framework of concepts; structure-centric; axiom set; price setter; full employment; multiplier; price mechanism; profit mechanism
    JEL: B59 E12 E24
    Date: 2014–03–12

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