nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2015‒01‒03
nineteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. Finance and crisis: Marxian, institutionalist and circuitist approaches By Argitis, Georgios; Evans, Trevor; Michell, Jo; Toporowski, Jan
  2. One million miles to go: taking the axiomatic road to defining exploitation By Veneziani, Roberto; Yoshihara, Naoki
  3. Women.s empowerment: what works and why? By Cornwall, Andrea
  4. El capital en el siglo XXI de Thomas Piketty By Estrada, Fernando
  5. The superiority of economists By Fourcade, Marion; Ollion, Etienne; Algan, Yann
  7. Capital, richesse et croissance de la recherche empirique aux éclairages theoriques By Jean-Luc Gaffard
  8. Not Beautiful, not Just, not Virtuous; 'And It Doesn't Deliver the Goods'. Capitalism and “Fear of Goods” in Keynes's Thought. By Carabelli, Anna; Cedrini, Mario
  9. Approaching an investigation of multi-dimensional inequality through the lenses of variety in models of capitalism By G. Antonelli; P. P. Calia; G. Guidetti
  10. An Inquiry into the Epistemic Properties of Entrepreneurs' Theories of Action By Cavarretta, Fabrice; Furr , Nathan
  11. Michaël Polanyi on Reality, Knowledge, and Economics By Agnès Festré; Pierre Garrouste
  12. Contro il liberoscambismo By Veronese Passarella, Marco
  14. The Emerging Portuguese Maritime Mega Cluster: Endogenous Dynamics and Strategic Actions By Regina Salvador
  15. Joint Land Certification, Gendered Preferences, and Land-related Decisions: Are Wives Getting More Involved? By Holden, Stein; Bezu, Sosina
  16. Sir W. Arthur Lewis By Berhanu Abegaz
  17. The Anatomy of Business Failure. A Qualitative Account of its Implications for Future Business Success By Artur Raimundo Dias; Aurora A.C. Teixeira
  18. Le jeu de langage de la science économique et sa performativité : A propos du débat sur l'involontarité du chômage By Christophe LAVIALLE
  19. Transformacja systemowa by³ej NRD – oczekiwania a rzeczywistosc. Oceny procesu w literaturze niemieckiej. By Michal Moszynski

  1. By: Argitis, Georgios; Evans, Trevor; Michell, Jo; Toporowski, Jan
    Abstract: Most mainstream neoclassical economists completely failed to anticipate the crisis which broke in 2007 and 2008. There is however a long tradition of economic analysis which emphasises how growth in a capitalist economy leads to an accumulation of tensions and results in periodic crises. This paper first reviews the work of Karl Marx who was one of the first writers to incorporate an analysis of periodic crisis in his analysis of capitalist accumulation. The paper then considers the approach of various subsequent Marxian writers, most of whom locate periodic cyclical crises within the framework of longer-term phases of capitalist development, the most recent of which is generally seen as having begun in the 1980s. The paper also looks at the analyses of Thorstein Veblen and Wesley Claire Mitchell, two US institutionalist economists who stressed the role of finance and its contribution to generating periodic crises, and the Italian Circuitist writers who stress the problematic challenge of ensuring that bank advances to productive enterprises can successfully be repaid.
    Keywords: capitalism,finance,crisis
    JEL: B14 B15 B24 B25 E11 E32
    Date: 2014
  2. By: Veneziani, Roberto (School of Economics and Finance, Queen Mary University of London); Yoshihara, Naoki (The Institute of Economic Research, Hitotsubashi University)
    Abstract: This paper analyses the Marxian theory of exploitation. A general axiomatic approach is developed which is appropriate to study the concept of exploitation - what it is and how it should be captured empirically. Two properties are presented that capture some fundamental Marxian insights. It is shown that, contrary to the received view, there exists a nonempty class of definitions of exploitation that preserve the relation between exploitation and profits - called Profit-Exploitation Correspondence Principle - in general economies with heterogeneous agents, complex class structures, and production technologies with heterogeneous labour inputs. However, among the main approaches, only the so-called ‘New Interpretation’ satisfies the Profit-Exploitation Correspondence Principle in general.
    Keywords: Exploitation, profits, axiomatic analysis
    JEL: B51
    Date: 2014
  3. By: Cornwall, Andrea
    Abstract: Revisiting foundational feminist work on the concept of empowerment from the 1980s and 1990s, this paper draws on the findings of a multi-country research programme, .Pathways of Women.s Empowerment., to explore pathways of positive change in women.s live
    Keywords: women.s empowerment, gender equality, social policy
    Date: 2014
  4. By: Estrada, Fernando
    Abstract: This review of the book by Thomas Piketty, the capital in the XXI century, presents the central themes of the work and exposes its scope on the relationship between inequality and wealth. In particular a positive reflections on the progressive tax is added.
    Keywords: Piketty, Capital in the 21st century, Capitalism, Distribution, Theory of economics.
    JEL: B13 B15 B16 B22 B23 B25 B41 B52 C21 C22 C82 E62 E64 H23 H26 N10 O11 O4 O5
    Date: 2014
  5. By: Fourcade, Marion; Ollion, Etienne; Algan, Yann
    Abstract: In this essay, we investigate the dominant position of economics within the network of the social sciences in the United States. We begin by documenting the relative insularity of economics, using bibliometric data. Next we analyze the tight management of the field from the top down, which gives economics its characteristic hierarchical structure. Economists also distinguish themselves from other social scientists through their much better material situation (many teach in business schools, have external consulting activities), their more individualist worldviews, and in the confidence they have in their discipline's ability to fix the world's problems. Taken together, these traits constitute what we call the superiority of economists, where economists' objective supremacy is intimately linked with their subjective sense of authority and entitlement. While this superiority has certainly fueled economists' practical involvement and their considerable influence over the economy, it has also exposed them more to conflicts of interests, political critique, even derision.
    Date: 2014
  6. By: Popov, Vladimir
    Abstract: Why even after the dramatic increase in inequality in the 1990s and after the emergence and enrichment of “oligarchs”, the alternative (leftist, social democratic) economic policies that could have improved material and social wellbeing of the majority of the population is not supported by this majority? It is argued that in immature democracies (without efficient restrictions for the participation of private capital in politics) mass media and electoral campaigns are controlled by the rich, so there is vicious circle: market reforms and private property create the class of the wealthy (“oligarchs”) that are not only interested in these reforms, but also have power to maintain their political and eonomic might through mass media and democratic elections. The return of public opinion to the “norm” so that it reflects interests of the majority is possible only if mass media and political process are separated from private capital and private financing. =================================================== Почему после резкого увеличения неравенства в 90-е годы прошлого века, после появления и стремительного обогащения «олигархов», альтернативная (левая, социал-демократическая) экономическая политика, которая могла бы улучшить материальное и социальное положение значительного большинства населения не поддерживается этим большинством? В статье доказывается, что в условиях незрелой демократии (без эффективных барьеров для участия частного капитала в политике) средства массовой информации и избирательные кампании контролируются владельцами крупных состояний, так что возникает замкнутый круг: рыночные рефоры и частная собственность рождают класс богатых («олигархов»), которые не только заинтересованы в этих реформах, но и обладают рычагами поддержания своего экономического и политического влияния через СМИ и демократические выборы. Возвращение общественных предпочтений к «норме» – к стереотипам, отражающим интересы большинства, возможно лишь при отделении СМИ и политического процесса в целом от частного капитала и частного финансирования.
    Keywords: Public opinion, transition from socialism to capitalism, inequalities, elections, mass media
    JEL: H00 P26 P3
    Date: 2014–08–08
  7. By: Jean-Luc Gaffard (OFCE)
    Abstract: Le livre de Thomas Piketty « Le Capital au XXIème siècle » est ambivalent. D’un côté, une lecture théorique trop simple, fondamentalement a-institutionnelle, retient un taux de croissance définitivement exogène et ignore l’hétérogénéité du capital, faisant de la répartition des revenus et des richesses une donnée technique sans influence en retour sur la croissance elle-même. D’un autre côté, les faits stylisés rassemblés et les intuitions qui y sont associées incitent réfléchir sur les tenants et aboutissants de la répartition des revenus et des patrimoines pour lui redonner une place centrale dans la théorie économique et lui restituer sa dimension sociale.
    Keywords: capital; distribution ; growth; rent; wealth
    JEL: D30 H20 O40
    Date: 2014–11
  8. By: Carabelli, Anna; Cedrini, Mario (University of Turin)
    Abstract: Offering a view of the other side of the liquidity-issue, the paper elaborates on the concept of “ fear of goods” in Keynes’s thought. It therefore illustrates numerous evidences of “fear of goods” in his economics , and aims to show that the notion might be considered as playing a quite important role as organising concept, helping to establish connections between ideas that are apparently only weakly related. The article fosters an interpretation of the development of Keynes’s theoretical arguments and proposed policy instruments for both domestic and global economy, as reactions to the “fear of goods” of capitalism, which Keynes saw as an inborn propensity of monetary economies of production.
    Date: 2014–11
  9. By: G. Antonelli; P. P. Calia; G. Guidetti
    Abstract: After a synthetic presentation of the state of poverty and inequality in the world and the contradictions incurred by economic theory in this field after decades of globalization and in the midst of a persisting global crisis, in paragraphs 2. and 3. we outline the rational for our theoretical analysis, underlining two main aspects. First of all, in paragraph 2. we recall the reasons which makes inequality a multidimensional phenomenon, while in paragraph 3. we explore the reasons why the models of capitalism theory is relevant for studying multidimensional inequality. These paragraphs emphasise that inequality is a multidimensional and cumulative phenomenon and it should not be conceived only as the result of the processes of personal and functional distribution of income and wealth, which even by themselves are intrinsically multidimensional. The basic idea is that institutions, the cobweb of relations among them and their interaction with the economic structure define the model of capitalism which characterises a specific country and this, in turn, affects the level and the dynamics of inequality. This approach is consistent with the sociological approach by Rehbein and Souza (2014), based on the analytical framework developed by Pierre Bourdieu. In paragraph 4. we outline the rational for our empirical analysis, applying the notion of institutional complementarity and examining the relationship between institutional complementarity, models of capitalism and inequality. Besides, refining Amable’s analysis (2003), we provide empirical evidence on the relationship between inequality in income distribution and models of capitalism. Additionally, basing on cluster analysis, we identify six different models of capitalism in a sample of OECD countries, provide preliminary evidence on the different level of inequality which characterises each model and suggest that no evidence supports of the idea that a single model of capitalism is taking shape in this sphere in EU. In paragraph 5. we give some hints about issues in search for a new interpretation capable to fasten together the process of increasing inequality, the notion of symbolic violence and the models of capitalism theory. In the last paragraph we focus on conclusions useful for carrying on our research agenda.
    JEL: P16 B52
    Date: 2014–12
  10. By: Cavarretta, Fabrice (ESSEC Business School); Furr , Nathan (BYU (Brigham Young University) Marriott School of Management)
    Abstract: Boundedly rational managerial actors struggling to process information often use a limited set of “theories of action,” or simple rules. However, simple rules may have a hierarchical structure, with some simple rules guiding others. Assuming the existence of such “keystone rules,” we establish the complexity of determining an efficient set, and therefore the necessity of using meta-heuristic approaches. We explore the development of “keystone rules” among entrepreneurs as a genetic algorithm, where the computationally hard problem of picking rules is solved by social calculation. We find that the emergent keystone rules among the observed entrepreneurs do not match existing “scientific” theories but have particular epistemic properties. The identification of keystone rules could fill a theoretical gap between the rational decision and the social construction perspectives.
    Keywords: entrepreneurship; simple rules; theory; cognition; evolution
    JEL: L26
    Date: 2014–11
  11. By: Agnès Festré (GREDEG CNRS; University of Nice Sophia Antipolis); Pierre Garrouste (GREDEG CNRS; University of Nice Sophia Antipolis)
    Keywords: Michael Polanyi, economics, science, reality, tacit knowledge
    Date: 2014–12
  12. By: Veronese Passarella, Marco
    Abstract: The article aims to show that the opposition «welfare or barbarism» is historically linked to the degree of globalization of advanced economies. I argue that the current trend is not the zeroing of the welfare state, but a radical re-definition of it along both «universalist» and «minimalist» lines. In fact, welfare state programmes are being reduced to a unique residual monetary benefit, whose function is to bridge the gap between the actual real wage and the minimum subsistence threshold of the working class. Against this background, this article provides a radical critique to the unconditional, and sometimes apologetic, acceptance of capitalist globalization and of its ideological superstructure, namely, the neo-liberal agenda. In addition, a different idea of the organisation of the economy is proposed, recovering and updating the concept of the «economic planning».
    Keywords: Welfare State, Neoliberal Agenda, Economic Planning, Socialism
    JEL: B5 B51
    Date: 2014–12–02
  13. By: Vinicius Vale; Fernando Perobelli
    Abstract: Nowadays, an important debate in the international economies is the problem of greenhouse gas emissions and climate change related. Discussions begin to gain the world with the signature of the Kyoto Protocol (1997), where an international agreement was reached to reduce global emissions. However, in this context of mitigation, many controlling policies are based on reducing domestic emissions of GHG, which ignores, for example, CO2 emissions embodied in international trade. Moreover, given sudden expansion and globalization of world economies, pollution embodied in trade flows becomes important for measurement of responsibilities, because the use of final goods and production inputs that a country need not necessarily produced by itself, leading to a growing concern about the problem of carbon leakage. Thus, many studies have taken into consideration the estimated emissions embodied in international trade through, for example, the input-output analysis. In this context, this paper seeks to make an empirical investigation on the responsibility for emissions and international trade. We use data from WIOD, where the data structure consists of Input-Output Tables for 40 countries (27 EU countries and 13 other selected countries) plus the "Rest of the World" for the period 1995 to 2009. Furthermore, the production side is disaggregated into 35 productive sectors. Finally uses atmospheric emissions of CO2 for the same 40 countries selected and RoW. The overall aim is to measure emissions embodied in international trade and to analyze the interactions in terms of sectors and regional, from such countries. We propose the following specific aims: a) to observe, through CO2 emissions in international trade, if there is a concentration of emissions and if this behavior is maintained over the years (1995-2009), b) measure CO2 emissions embodied in production and consumption, c) measure the CO2 emissions embodied in exports and imports of each country and thus verify if the international trade has been used as a way to reduce emissions by countries, d) construction carbon balance for each country. The methodology used involves input-output techniques for calculating carbon emissions embodied in international trade. Thus, aggregate indicators for different countries are obtained, such as coefficients of intensity of CO2 emissions. Moreover, trade balances global CO2 emissions embodied in international trade are calculated and the major net exporters and net importers of CO2 emissions in the world economy are identified. Moreover, these indicators represent the empirical basis for the discussion on the responsibility for emissions, being possible, for example, to make a discussion of responsibilities between producer and consumer countries for environmental impacts. Finally, Miyazawa multipliers are calculated, a methodology that approach the issues of feedback loop between countries, through the decomposition of the Leontief inverse matrix in sub-matrices.
    Keywords: CO2 emissions; International trade; Multi-regional input-output model;
    JEL: C67 D57 Q53 Q54 Q56
    Date: 2014–11
  14. By: Regina Salvador
    Abstract: In these last four or five years, the creation of a Maritime Cluster in Portugal has been an issue of first political and economic relevance in the Country. The enlargement of the Continental Shelf under national jurisdiction into a total surface of 2.2 millions square kilometres (with a predictable high level of mineral, genetic and hydrothermal resources) ? particularly taking into account the economic crisis in current context ? awakes all kinds of hopes and ambitions. This "last big change in the World Map" ? in direct connection with the main guidelines of the Integrated Maritime Policy for the European Union ? requires the creation of a maritime mega-cluster. It should include both traditional (fishing, canning industry, ship building, maritime transports), and modern sectors (wave and tide energy, biotechnology), in a country that it is not known for a high level of social capital or its capacity of developing joint efforts. The current paper defines and presents the Maritime Cluster basic and most important characteristics in terms of main territories and regions. More specifically, the critical stage which corresponds to the Cluster initial emergence (during which the seeds for future economic growth are launched) has a strong dependence from different local conditions and the launch of specific processes. Starting with the assumption that geographical proximity and enterprises/institutions strategic cooperation promote competitiveness and innovation and, in consequence, the development, we propose to determine the existence of cooperation relationships and/or partnerships between activities connected with the maritime sector; if those relationships exist, are they partnerships at local, regional or national scale; and if recent trends point out towards innovation. The paper quantifies the sea cluster main intersectorial linkages, based on the integrated system of Portugal's Input-Output Matrix, to which we call Sea Input/Output Matrix (SIOM). It is also put in evidence the multiplier factors of direct, indirect and induced effects. Taking into consideration the final quantitative results, the authors present some remarks in terms of Employment, GVA and Investment in Portuguese Sea Cluster Economic Sectors. Finally, it is presented the preliminary results of a questionnaire that was launched among the members of the so called Sea Entrepreneurial Forum.
    Keywords: Maritime Cluster; Input-Output analysis; Extension of the Continental Shelf.
    Date: 2014–11
  15. By: Holden, Stein (Centre for Land Tenure Studies, Norwegian University of Life Sciences); Bezu, Sosina (Centre for Land Tenure Studies, Norwegian University of Life Sciences)
    Abstract: We have investigated whether joint land certification in Southern Ethiopia has contributed to a strengthening of the perceived land rights of women and an increase in their intra-household involvement in land-related decisions. We use gender-disaggregated household panel data and generate indices for wives’ and husbands’ land rights attitudes and for wives’ involvement in land-related decisions. After controlling for endogeneity of land certification, using a Control function approach, we find that receipt of land certificate has strengthened wives’ awareness of their land rights. We also find evidence of an intra-household bargaining effect and an intracommunity social process effect that both contribute to stronger involvement of wives in landrelated decisions within households.
    Keywords: joint land certification; gender; empowerment of wives; Ethiopia
    JEL: D03 J16 Q15
    Date: 2014–11–18
  16. By: Berhanu Abegaz (Department of Economics, The College of William and Mary)
    Abstract: Raised by school-teacher parents in the Caribbean island of St. Lucia and educated in St. Mary’s College there—a school that also produced poet Derek Walcott, the other Nobel Laureate of St. Lucia—Lewis began his studies and career at the London School of Economics (LSE). He subsequently held distinguished professorships at the universities of Manchester and Princeton. He also served as a senior economic advisor in West Africa in addition to administrative stints as Vice Chancellor of the University of the West Indies and as founding president of the Caribbean Development Bank. Knighted by Queen Elizabeth in 1963, Arthur Lewis retired in 1983 and died in 1991 at the age of 76 in his summer home in Grenada. It was in Manchester that he did some of his most significant works in development economics, especially the seminal article `Economic Development with Unlimited Supplies of Labor' (1954) and the treatise, The Theory of Economic Growth (1955). Lewis is also known for his work, while at Princeton, on the history of the second industrial revolution and the new international economic order. While The Theory of Economic Growth (1955) and Growth and Fluctuations 1870–1913 (1978) are both regarded as classics, it is the 1954 article that constitutes his most influential single contribution having spawned a large literature on development as structural transformation. Lewis’s foundational and pioneering research arguably launched the field of modern development economics. This and a deep knowledge of economic history earned him the ultimate recognition as a Nobel Laureate in Economics in 1979. A gifted scholar and a perceptive public intellectual with the sensibilities of a British Fabian socialist (a view he shared with the likes of Gandhi), he was blessed with the good luck of appearing in an era on the cusp of major world events, including decolonization, the global civil rights movement, centrally planned economies, and the urgency for accelerating economic development felt in the newly independent countries of Africa, Asia, Latin America and the Caribbean. Lewis is also remembered as an independent-minded trailblazer: the first black man to serve on the faculties of LSE, Manchester, and Princeton; to head the University of the West Indies; and to be awarded the Nobel Prize in a field other than peace and literature. Given his origins in a poor outpost of the British Empire and the blatant institutional racism he had to confront at the intellectual centers of the metropole, his life’s journey provides a great inspiration to all who cherish the life of the mind, responsible citizenship, and dream of living in a world free of racial injustice and abject poverty.
    Date: 2014–09–10
  17. By: Artur Raimundo Dias (Faculdade de Economia do Porto); Aurora A.C. Teixeira (CEF.UP, Faculdade de Economia, Universidade do Porto; INESC TEC; OBEGEF)
    Abstract: The aim of the present study is to contribute to the empirical literature on the consequences of Business Failure (BF), resorting to qualitative methods in order to better understand the aftermath of BF. Semi-structured interviews were used in order to collect data, which were later transcribed and analyzed using Interpretative Phenomenological Analysis. Evidence gathered based on the experience of six entrepreneurs (three from the north of Europe and three from the south) showed that previous failure impacted individuals strongly. Such an impact appears to be shaped by the individual’s experience and age, and their perception of blame for the failure. However, for these particular individuals, it does not seem to be affected by the size of the project or the amount of financial loss. An array of moderator costs was identified, ranging from antecedents to institutions that were present in the individual’s lives. The outcomes are directly relatable to the failed experience by the individual. It was also found that the failure had a significant effect on the individual’s career path.
    Keywords: business failure, consequences; interpretative phenomenological analysis; learning from failure
    JEL: G33 L26 M21
    Date: 2014–11
  18. By: Christophe LAVIALLE
    Keywords: , performativité , jeu de langage , chômage involontaire , Keynes , Lucas
    Date: 2014
  19. By: Michal Moszynski (Nicolaus Copernicus University, Poland)
    Abstract: In this paper an attempt is made to outline the views on the transformation of the former GDR formulated in the German scientific literature. Due to the limited scope of the paper and the magnitude and complexity of the phenomena, discussion is limited to the most important and most controversial – according to the author – aspects around which discussions were held between leading economists from academia and politicians. The study starts with a brief introduction regarding the merits of the transformation of the economic order of the former GDR. Further outlines early assessments of the economic condition of Eastern Germany and ideas on eventual reunification of the country. Then, following, if possible, the chronological order, an overview is provided of the most important assessment about elements of a new order, such as the monetary union and the deregulation of prices, changes in the ownership structure, the creation of the institutional framework and the situation on the labor market and financial transfers. The main scientific method applied is analysis of literature, evaluation of official documents and historical analysis.
    Keywords: institutional economics, effectiveness of institutional system, TOPSIS method, global knowledge-based economy, European Union
    JEL: B52 N14 P20 P30
    Date: 2012–12

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