nep-hme New Economics Papers
on Heterodox Microeconomics
Issue of 2016‒10‒16
sixteen papers chosen by
Carlo D’Ippoliti
Università degli Studi di Roma “La Sapienza”

  1. The question of the firm. Organizational forms and dimensions By Fusari, Angelo
  2. Les rapports de force au cœur des relations de sous-traitance : conséquences sur les relations de travail By Corinne Perraudin; Héloïse Petit; Nadine Thevenot; Bruno Tinel; Julie Valentin
  3. What are production, work and consumption? Trans-historical re-conceptualisations By Edvinsson, Rodney
  4. Economic Crisis, Economic Methodology and the Scientific Ideal of Physics By Drakopoulos, Stavros A.
  5. Institutions as Emergent Phenomena: Redefining Downward Causation By Nicolas Brisset
  6. Gendering Utopia: A Feminist Literary Analysis of Marge Piercy’s Woman on the Edge of Time By Jessica Murray
  7. On Performativity: Option Theory and the Resistance of Financial Phenomena By Nicolas Brisset
  8. Jusqu’où l’économie écologique pense-t-elle l’inégalité environnementale ? Autour de l’oeuvre de Joan Martinez-Alier By Laura Centemeri; Gildas Renou
  9. Validity of Islamic economics' behavioral assumptions: A preliminary discussion on charity giving By Murat Çokgezen
  10. Caracterizaciones de la pobreza y las políticas para combatirla By Luisa Montuschi
  11. Responding to recent student protests at South African universities through curriculum development By Adrian Konik; Inge Konik
  12. Impact Evaluation in a Landscape: Protected Natural Forests, Anthropized Forested Lands and Deforestation Leakages in Madagascar's Rainforests By Sebastien Desbureaux; Eric Nazindigouba Kere; Pascale Combes Motel
  13. Intrahousehold allocation of resources and household deprivation By Elena Bárcena-Martín; Maite Blázquez; Ana I. Moro Egido
  14. The Gender Wealth Gap Across European Countries By Miriam Rehm; Katharina Mader; Alyssa Schneebaum; Katarina Hollan
  15. The political economy of income distribution: industry level evidence from Austria By Alexander Guschanski; Özlem Onaran
  16. Industrial diversification in Europe: The differentiated role of relatedness By Jing Xiao; Ron Boschma; Martin Andersson

  1. By: Fusari, Angelo
    Abstract: The paper will dedicate some development to the theory of the firm, that is: general considerations on organization, capabilities and uncertainty, with particular reference to interactions among entrepreneurship, uncertainty and innovation. Particular attention will be paid to the idea of radical uncertainty in order to clarify frequent misconceptions as to the meaning and substance of this variable, its links with the question of competence and profit and – one of the most abstruse of questions – its measurability and the possible implications of deriving such a measure, primarily on the management of the business cycle. The treatment of these subjects will lead into a discussion of the size of the firm, the connected organizational problems and, hence, the nature of the corporation, the question of its responsibilities, the monitoring role of the profit rate intended as an accountability (not distributive) variable, i.e. as an expression of a firm’s results and hence of the success of its decision making and some considerations on optimization .
    Keywords: Theories of the firm; Radical uncertainty; Dynamic competition process; The question of optimization; Size of the firm; Dimensional boundaries
    JEL: A1 D8 P0 Z00
    Date: 2015
  2. By: Corinne Perraudin (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Héloïse Petit (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CEE - Centre d'études de l'emploi - M.E.N.E.S.R. - Ministère de l'Éducation nationale, de l’Enseignement supérieur et de la Recherche - Ministère du Travail, de l'Emploi et de la Santé); Nadine Thevenot (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Bruno Tinel (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Julie Valentin (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The goal of this research is to analyse how the power relationship conveyed by subcontracting relations reflects in labour relations. By definition, subcontracting relations apply to situations where the principal contractor plans and conducts the subcontractors' activity and controls the sale of the fragmented product. Accordingly, subcontracting relations are part of power relations between firms which are understood here as the ability to transfer onto other firms their own external constraints (the principal contractor perspective), and in return the dependency of these subcontractors to external directives (subcontractors perspective). Power relations can also be highlighted through the nature of the subcontracted activity: principal versus secondary activities of the contractor. Based on the French survey Reponse matched with the administrative database on firms and workers (DADS) 2008-2010, this paper provides an overview of the subcontracting relations in France for all establishments of 11 and more employees in the private sector (excluding agricultural sector). The effects of these inter-firm relations on the main features of labour relations are examined: earnings, labour organisation and industrial relations.
    Abstract: L'objectif de cette recherche est d'analyser les effets des rapports de force entre entreprises inhérents aux relations de sous-traitance sur les relations de travail dans les entreprises. Par définition, le recours à la sous-traitance conduit en effet les donneurs d'ordres à planifier l'activité des sous-traitants et à contrôler la vente de leurs produits fragmentés. Dès lors, les relations de sous-traitance s'inscrivent dans des rapports de force entre entreprises, que l'on appréhende ici par la capacité de répercuter sur l'extérieur les contraintes subies (perspective des donneurs d'ordres) ou, à l'inverse, la dépendance aux injonctions extérieures (perspective des preneurs d'ordres). Les rapports de force sont également appréhendés par la nature de l'activité sous-traitée, selon qu'elle relève au moins en partie de l'activité principale ou qu'elle ne concerne que des activités secondaires. A partir des données de l'enquête REPONSE 2010-2011 appariées aux données DADS 2008-2010, cette recherche présente un état des lieux des relations de sous-traitance en France, puis analyse les conséquences de ces relations de sous-traitance sur plusieurs dimensions de la relation de travail pour les établissements de 11 salariés et plus du secteur marchand non agricole : les rémunérations, l'organisation du travail et de la production, et enfin les relations professionnelles.
    Keywords: subcontracting,labour relations,wages,industrial relations,trade unions,power relations,sous-traitance,relation de travail,relations professionnelles,salaires
    Date: 2014–12
  3. By: Edvinsson, Rodney (Dept. of Economic History, Stockholm University)
    Abstract: This paper argues for trans-historical reformulations of the basic economic concepts of production, work and consumption. The definition of the production boundary by System of National Accounts (SNA) is inconsistent from a scientific point of view. For example, while some non-market and illegal services are viewed as productive, others are not, and services and goods are treated differently. The definition proposed by feminist economics, the so-called third person criterion, is consistent, but in need for further development; furthermore, it is a definition of work and not of production. The purpose of this study is to investigate whether it is possible to formulate a non-eclectic set of logically consistent definitions that could be considered variations of a common underlying understanding across various theoretical traditions – mainly Classical, Neoclassical, Institutional, Marxist, Feminist and Keynesian Economics – of how humans consciously change external nature in order satisfy human needs. Important issues concern how to deal with violence, double counting of transaction costs, human capital formation, non-market activities and causation of final consumption. Production, work and consumption are defined as relations between events, the subject matter and the agent, and in the main definitions reduced to non-economic sentences. Even the utility concept is avoided. First-order logic is used, complemented with modal operators for some of the sentences. In this study, it is shown that production, work and consumption all share the common feature of intentional physical transformation of the intrinsic properties of the subject matter. The object transformed during the productive activity and work must at some point in time be external to the agent. For work, the purpose of transforming an external object must not lie in the transformation of the agent. A productive activity must potentially be able to cause the satisfaction of human needs, or final consumption, which is not a condition for work or required by the third-person criterion. Final consumption involves the transformation of the subject matter that is a final purpose for the consumer or serves as a purpose for transforming the consumer. Using a criterion applied by the institutional economist Cheung to identify transaction costs, this study defines social reproduction as an activity that would not occur in a Robinson Crusoe economy. Social reproduction occurs under an institutional setting. We can further differentiate between coercive and non-coercive social reproduction. In this study, eight different definitions of production are presented. The definition of agent external production is close to the third person criterion, but the possible causation of future final consumption is included as a condition for a productive activity. It is also related to the basic neoclassical model with its assumptions of no transaction costs. The definition of agent external non-coercive production entails that transformations of persons against their own will, whether legally or illegally performed, are unproductive activities. The definition of agent external non-social production entails that all socially reproductive activities are unproductive, and comes close to the distinction made by Classical and Marxist economists of productive and unproductive work. Humanity external production only includes the transformation of non-persons. The three definitions of time scale invariant production entails that human capital formation could be considered productive activities. Market production comes close to Keynesian theory and the present definition of SNA, with the difference that it excludes non-market goods production. The present study also opens for the possibility of unproductive work, for example failed production or professional murder, and productive final consumption that does not involve any work, for example hobby-hunting, play with children or research activity for own pleasure. Which definition of production is applied greatly affects the modelling and empirical application of growth theory and the analysis of the driving forces in economic history. For example, assume trade causes labour productivity outside of trade to increase four-fold due to specialisation, while the share of GDP in total working time increases from nil to half. With the same value added per productive hour and with total hours worked kept constant, the value added of agent external production then records a four-fold increase, while that of non-social production only a doubling. Similarly, during wars the SNA GDP often increases substantially, while the concept of agent external non-coercive production entails that all war expenses are treated as unproductive. Time frame invariant production grows faster than agent external production during expansions of the education system. Market production could serve important analytical purposes, for example to investigate the relation between money supply and inflation, but should be rid of inconsistencies such as the inclusion of non-market goods production.
    Keywords: GDP; production; work; consumption; economic philosophy; SNA
    JEL: A10 B13 B14 B40 B50 B51 B52 B54 D10 E00 E21 E23 J00 J24 N00 N01 O00
    Date: 2016–10–09
  4. By: Drakopoulos, Stavros A.
    Abstract: The methodological foundations of mainstream economics have been cited as one of the main reasons for its failure to account for the economic crisis of 2008. In spite of this, the status of economic methodology has not been elevated. This is due to the persistent aversion towards methodological discourse by most mainstream economists. The anti-methodology stance has a long presence as exemplified in Frank Hahn’s (1992) work. After focusing on the debate originating after the publication of Hahn’s arguments, the paper offers a categorization of the main explanations for mainstream methodological aversion. Subsequently, it suggests an explanation based on the role of the physics scientific ideal, arguing that the endeavor to achieve the high scientific status of physics by following the methods of physics, contributed to the negative mainstream attitude towards economic methodology. The relevant writings of the extremely influential mainstream economists Irving Fisher and Milton Friedman, reinforce the assertion that the alleged hard science status of economics renders methodological discussions and especially methodological criticism, rather pointless. The paper also calls for a more systematic discussion of this issue, especially in the wake of the line of argument that links the recent failings of mainstream economics to its methodological basis
    Keywords: Economic Methodology; History of Economic Thought; Economics and Physics; Economic Crisis
    JEL: B0 B30 B40
    Date: 2016–09
  5. By: Nicolas Brisset (Université Côte d'Azur, France; GREDEG CNRS)
    Abstract: The concept of emergence is frequently used in the social sciences in order to characterize social institutions. Nevertheless, philosophy of mind argues that the idea of emergence is problematic because it encompasses the dubious notion of downward causation, i.e. the fact that an entity at a given ontological level might have a causal influence on lower level entities. This work shows that although it is problematic in some fields, emergence is an ontological feature of the social world. In order to justify this point of view and to show how institutions relate to individuals' actions, we define an institution as an exogenous device, which enables us to show that the relationship between institution and individual actions is not only a causal one but also an intersubjective and a constitutive one.
    Keywords: Emergent Phenomena, Institution, Downward Causation, Convention
    JEL: B52 B41
    Date: 2016–10
  6. By: Jessica Murray (University of South Africa)
    Abstract: In Woman on the Edge of Time, Marge Piercy offers a utopian revisioning of a society in which gender, mothering, madness and social organization are all radically reconstructed. By means of a feminist literary analysis of the ways in which the text revisions some of the most urgent gendered challenges that continue to plague contemporary societies, this article seeks to shed light on the utopian future that feminist theorists and activists continue to strive towards. The novel represents the experiences of Connie, a Mexican American woman who periodically escapes from her oppressive existence in contemporary American society by entering the alternative, utopian society of Mattapoisett. Piercy does not simply accept the traditional view of man and woman, individual and community, heterosexual and homosexual, mad and sane as polar opposites. Rather, in her construction of utopia, she sees them as constitutive elements of a harmonious whole. In her utopia, it becomes clear that patriarchy does not only oppress women and the reader sees male characters basking in the joy of parenting and children flourishing in communal caregiving environments. Through her literary vision of a new type of society, Piercy suggests that a reconfiguration of gender can benefit all members of such a new, utopian society.
    Keywords: Gender; utopia; science fiction; mothering; madness
  7. By: Nicolas Brisset (Université Côte d'Azur, France; GREDEG CNRS)
    Abstract: The issue of performativity concerns the claim that economics shape rather than merely describing the social world. This idea took hold following a paper by Donald MacKenzie and Yuval Millo entitled “Constructing a Market, Performing Theory: The Historical Sociology of a Financial Derivatives Exchange” (2003). This paper constitutes an important contribution to the history of economic thought since it provides an original way to focus on the scientific construction of the real economy. The authors discuss the empirical success of the Black-Scholes-Merton (BSM) model on the Chicago Board Options Exchange (CBOE) during the period 1973-1987. They explain this success in part as instead of discovering pre-existing price regularities, it was used by traders to anticipate options’ prices in their arbitrages. As a result, options’ prices came to correspond to the theoretical prices derived from the BSM model. In the present article I show that this is not a completely correct conclusion since the BSM model never became a self-fulfilling model. I would claim that the October 1987 stock market crash is empirical proof that the financial world never fitted with the economic theory underpinning the BSM.
    Keywords: Performativity, Black-Scholes-Merton, Self-fulfillment
    JEL: B23 B41 G12
    Date: 2016–10
  8. By: Laura Centemeri (IMM - Institut Marcel Mauss - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique); Gildas Renou (SAGE - Sociétés, Acteurs, Gouvernement en Europe - Université de Strasbourg - CNRS - Centre National de la Recherche Scientifique)
    Abstract: L’objectif de cette contribution est, d’abord, de présenter l’oeuvre de l'économiste catalan Joan Martinez-Alier, un des fondateurs de l'économie écologique, en la situant dans sa trajectoire politique et intellectuelle. Il s’agira ensuite de développer une réflexion plus large concernant le type de pluralisme des valeurs qui est en question dans une critique écologique ayant l’ambition d’être attentive aux inégalités environnementales mais également à la pluralité des modes qu’ont les humains de tenir à l’environnement.
    Keywords: transition écologique, décroissance, valeur, critique écologique, mouvements sociaux,economie écologique, justice environnementale, inégalités environnementales
    Date: 2016–07–08
  9. By: Murat Çokgezen (Marmara University - Istanbul)
    Abstract: Economics literature witnessed the revival of Islamic economics over the last few decades as an alternative to conventional economic theory. Islamic economists criticized value-free nature and unrealistic assumptions of conventional economics and offered a new paradigm based on behavioral assumptions. Aim of this paper is to explore validity of these behavioral assumptions, in general, or more specifically, assumptions of Islamic economics concerning to giving. The validity of behavioral assumptions of IE and their results is rarely questioned in the literature. Particularly, empirical studies, in this regard, are very limited. This study aims to make a contribution to this methodological issue by analyzing country level charity data. Additionally, it also provides a modest contribution to empirical studies on charity/giving at the macro level. Results of the study shows that countries with more pious citizens give more than the others but found no difference between giving rates of Muslim-majority countries and the others. The finding is consistent with a limited number of other studies claiming that Muslims, in general, are not different from the others or are not behaving as described in Islamic economics. Increasing numbers of studies supporting findings of this study or raising questions about the validity of Islamic economics' assumptions may cause the Islamic economics to evolve in a different direction
    Keywords: Philantrophy,Islamic economics,Economic methodology,Charity,Zakah
    Date: 2016–07–29
  10. By: Luisa Montuschi
    Abstract: La pobreza constituye un problema de extrema seriedad en cualquier sociedad, que la limita y que obstaculiza el sendero hacia el progreso social. Mucho se ha dicho respecto de la pobreza, pero el punto esencial e ineludible es que la verdadera solución del problema consiste en remover los factores que la sostienen a lo largo del tiempo. Y esta sería la única forma posible que podría ayudar a un país a emprender la senda hacia el progreso social. Un punto importante que debe ser tenido en cuenta es señalado por ciertos autores quienes han sostenido que “…definiciones de pobreza claras y transparentes son prerrequisitos esenciales de cualquier política de desarrollo que ubique en el centro la reducción de la pobreza”. A fin de clarificar tal objetivo debemos remitirnos a la caracterización del concepto de pobreza y al análisis de distintas nociones o calificaciones que se han propuesto en los análisis pertinentes. Summary: Poverty is a problem of extreme seriousness in any society that limits and hinders the path to social progress. Much has been said about poverty, but the essential and inescapable point is that the real solution to the problem is to remove the factors that sustain it over time. And this is the only possible way that could help a country to embark on the path to social progress. An important point that should be taken into account has been pointed out by some authors who have argued that "clearer and more transparent definitions of poverty are essential prerequisites of any development policy that puts poverty reduction at its center”. To clarify this objective we must refer to the characterization of the concept of poverty and to the analysis of different notions or qualifications that have been proposed in studies and reports.
    Date: 2016–10
  11. By: Adrian Konik (Nelson Mandela Metropolitan University); Inge Konik (University of the Free State)
    Abstract: South Africa has recently seen escalating student protests at universities, involving calls for the thorough ‘decolonization’ of university curricula and the related dismantling of ‘white privilege.’ Yet, what has emerged on the ground is that these protests – increasingly characterized by intimidation, violence, and the destruction of university property – represent the concerns of a relatively small segment of the student body. Furthermore, while the student protesters employ many of the tropes and images of the erstwhile anti-apartheid struggle when articulating their grievances, they persistently ignore the disconnect between such sentiments and the politico-economic transformation of South Africa over the last two decades. Transformation that has seen previous struggle leaders, now in government, actively endorse the neoliberal organization of South Africa, while also benefiting many black South Africans through mechanisms such as Black Economic Empowerment (BEE), which have contributed to the rapid rise of a black middle class. Admittedly, this has come at the expense of much of the black working class, who have faced workforce rationalization, and contract rather than full-time employment, along with heavy-handed reprisals when workers protest low wages – of which the Marikana massacre is an example. Yet instead of recognizing the related continued socio-economic suffering as deriving largely from neoliberal policies implemented by a predominantly black government – headed by the African National Congress (ANC) – the protesters continue to blame South African socio-economic ills on ‘whiteness’ and/or ‘whites.’ This much is evinced in calls by participants in the #RhodesMustFall and #FeesMustFall movements for the removal of white thinkers from university curricula and indeed white professors from universities. This paper argues that such calls can be understood in existential terms, as part of a process of mourning the loss of the ‘new South Africa’ dream. This is a dream woven in the euphoria of 1994 from assumptions of precolonial harmony and related expectations of an imminent better life for all, but one with little historical basis and one that has not been able to withstand the exigencies of South Africa’s imbrication within the global economy. In the interest of contributing to socio-political stability in South Africa, what is advanced is the importance both of recognizing the pain that such loss entails, and of incorporating such recognition into university curricula, while at the same time avoiding the potential pitfalls of identity politics.
    Keywords: neoliberalism; #RhodesMustFall; #FeesMustFall; decolonization; curriculum; identity politics
    JEL: I24 A00 D74
  12. By: Sebastien Desbureaux (CERDI - Centre d'études et de recherches sur le developpement international - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique); Eric Nazindigouba Kere (CERDI - Centre d'études et de recherches sur le developpement international - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique); Pascale Combes Motel (CERDI - Centre d'études et de recherches sur le developpement international - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper analyzes deforestation leakages from natural rainforests to anthropized habitats following the creation of Protected Areas in Madagascar. A simple theoretical framework highlights that a conservation constraint does not necessarily create deforestation leakages on secondary forests. An original dataset is built combining fine scale vegetation cover images and spatialized census data over the period 2000 to 2012. Cover images allow us to distinguish a mosaic of landscapes. Multilevel panel regressions and matching techniques indicate a causal effect of Protected Areas on deforestation leakages. Though Protected Areas reduce deforestation in protected natural forests, forest clearing is mostly reported on other types of anthropized forests. Our results demonstrate the limitations of Porter-like mechanism in agricultural innovation. They also support the hypothesis of a conservation dilemma: protecting biodiversity may come at the expense of the welfare of locals who rely on local (provisioning) ecosystem services.
    Keywords: Land use patterns,Environmental policies,Agricultural innovation.
    Date: 2016–07–05
  13. By: Elena Bárcena-Martín (Dpto. Estadística y Econometría, University of Málaga.); Maite Blázquez (Universidad Autonoma de Madrid.); Ana I. Moro Egido (Department of Economic Theory and Economic History, University of Granada.)
    Abstract: This paper analyzes to what extent the financial regime of the couple, defined in terms of the level of income pooling and decision-making responsibilities, is associated with different levels of household deprivation and also with specific domains of deprivation, namely economic strain, durables and housing. We conclude that contributing incomes to the household, either totally or partially, reduces deprivation, specifically economic strain. This reduction is even more noticeable in the presence of children. We also find that sharing the responsibility for decision making reduces deprivation. In particular, by areas of decision we find that, first, deprivation is not significantly influenced by which member of the couple, either the man, the woman or both, has most decision-making responsibilities in terms of durables; second, deprivation increases when the female (male) decides on issues related to borrowing (children); third, if the woman decides about everyday shopping, deprivation diminishes and this effect is weaker if she is the one who earns more in the couple; and finally, deprivation decreases if the partner who earns more decides about savings, and even more so in the economic strain domain. All these results give evidence of the need to take into account the standard determinants of deprivation together with variables that capture the ways in which household members make decisions and how they pool incomes in designing policies to reduce deprivation.
    Keywords: Deprivation, income pooling, decision-making responsibility, gender, children
    JEL: C21 D13 I32
    Date: 2016–10–01
  14. By: Miriam Rehm; Katharina Mader; Alyssa Schneebaum; Katarina Hollan
    Date: 2016
  15. By: Alexander Guschanski; Özlem Onaran
    Keywords: Österreich, Einkommensverteilung
    Date: 2016
  16. By: Jing Xiao; Ron Boschma; Martin Andersson
    Abstract: There is increasing interest in the drivers of industrial diversification, and how these depend on economic and industry structures. This paper contributes to this line of inquiry by analyzing the role of relatedness in explaining variations in industry diversification, measured as the entry of new industry specializations, across 173 European regions during the period 2004-2012. There are significant differences across regions in Europe in terms of industrial diversification. Relatedness has a robust positive influence on the probability that new industry specialization develops in a region. A novel finding is that the influence of relatedness on the probability of new industrial specializations depends on innovation capacity. We find that relatedness is a more important driver of diversification in regions with a weaker innovation capacity. The effect of relatedness appears to decrease monotonically as the innovation capacity of a local economy increases. This is consistent with the argument that high innovation capacity allows an economy to ‘break from its past’ and to develop, for the economy, truly new industry specializations. We infer from this that innovation capacity is a critical factor for economic resilience.
    Keywords: industrial diversification, related diversification, evolutionary economic geography, unrelated diversification, European regions, resilience
    JEL: B52 L16 O14 O18 R11
    Date: 2016–10

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