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on History and Philosophy of Economics |
| By: | Freeman, Alan |
| Abstract: | This paper undertakes a critical examination of the concept of 'centre of gravity' as adapted by economics from classical mechanics, relating it to the idea of 'long-run' profits, prices and quantities, as presented in the work of the post-Sraffians.(1) It will also address the origin of this concept of 'long-run' in Marshall's distinction between long-run and short-run determinations of economic magnitudes. It shows that economists have generally conceived of centre of gravity as a theoretical magnitude which is not observed, but around which observed magnitudes oscillate either randomly or in some deterministic manner; this much is generally agreed. This idea has, however, been interpreted in two distinct ways in the history of economic thought: (1) as an attractor dynamically determined at each point in time by path-dependent historical processes which have led the economy to be in its present state. (2) as a hypothetical static equilibrium state of the economy determined independent of history by its current exogenous parameters (utility, technical capacity, etc) It demonstrates that these two ideas are necessarily distinct and that both must be taken into account in any pluralistic research programme. Mathematically the attractor of a variable is not in general equal to its hypothetical static equilibrium, except in highly restricted circumstances such as the absence of technical change. Moreover, again outside of exceptional circumstances, the divergence between the predictions of observed magnitudes given by the two approaches increases over time, so that it cannot even be accepted that one converges on the other. Error will therefore result if it is assumed a priori that (1) is identical to (2). The fact that the two conceptions lead to different predictions does not decide that either one is correct. This should be determined empirically and therefore, an agreed empirical test should be established by the community of social scientists or, better still, society. The paper will argue that, empirically, the 'test variable' against which both conceptions should be checked is the time average of the variables in question. This is not a distinct concept of 'centre of gravity' but an empirical observable. In a pluralistic programme, the predictions of both conceptions should be evaluated against this proposed test variable. The second part of the paper examines the common basis for the critical stance taken by both Keynes and Marx to the second conception, which is rooted in a common attitude to the relation between substance and accident, and a correspondingly similar conception of uncertainty. It will relate this to the work of Quetelet and the development of the statistical method in sociology which, it will argue, is rooted in an ontologically distinct conception of social magnitudes to that found in economics, closer to the concept which Keynes and Marx shared. It argues that the post-Sraffian conception of long-run is based on a fallacious identification of these two distinct concepts, rendering the post-Sraffian approach equally incompatible with Keynes's and Marx's theories. It argues that the post-Sraffian conception of centre of gravity is 'intrinsically antipluralistic' in that it depends absolutely on the conflation of two concepts which are in fact necessarily distinct, leading to the suppression of the non-equilibrium concept as an alternative to the scientific procedure of testing the predictions of both concepts against an observable. |
| JEL: | B5 B51 B14 B4 B31 B12 |
| Date: | 2006–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6812&r=hpe |
| By: | Neil Arnwine |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:bil:bilpap:0709&r=hpe |
| By: | Francisco Louçã |
| Abstract: | The paper investigates the “widest cleft”, as Savage put it, between frequencists in the foundation of modern statistics: that opposing R.A. Fisher to Jerzy Neyman and Egon Pearson. Apart from deep personal confrontation through their lives, these scientists could not agree on methodology, on definitions, on concepts and on tools. Their premises and their conclusions widely differed and the two groups they inspired ferociously opposed in all arenas of scientific debate. As the abyss widened, with rare exceptions economists remained innocent of this confrontation. The introduction of probability in economics occurred in fact after these ravaging battles began, even if they were not as public as they became in the 1950s. In any case, when Haavelmo, in the 1940s, suggested a reinterpretation of economics according to the probability concepts, he chose sides and inscribed his concepts in the Neyman-Pearson tradition. But the majority of the profession indifferently used tools developed by each of the opposed groups of statisticians, and many puzzled economists chose to ignore the debate. Economics became, as a consequence, one of the experimental fields for “hybridization”, a synthesis between Fisherian and Neyman-Pearsonian precepts, defined as a number of practical proceedings for statistical testing and inference that were developed notwithstanding the original authors, as an eventual convergence between what they considered to be radically irreconcilable. |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:ise:isegwp:wp22008&r=hpe |
| By: | Jackie Krafft (GREDEG - Groupe de recherche en Droit Economie Gestion - Université de Nice Sophia-Antipolis) |
| Abstract: | Seventy years ago, Ronald Coase, Nobel Prize in 1991, wrote a seminal paper “The nature of the firm”. This paper is now traditionally considered as the origins of the development of an economic theory of the firm. Before this article, the firm was assimilated to a ‘black box’, incorporating inputs and generating outputs. Coase (1937) argued that the firm was more than this purely technical vision: the firm has a concrete existence in the business world, and its internal modes of organisation (especially the coordination of individuals by hierarchies) are different from simple market transactions (coordinated by prices). With this statement, he encouraged economists to elaborate realistic hypotheses on what is a firm, and what a firm does. Today, the research agenda opened up by Coase is far from being completed. Recent works on the economics of the firm converge to show how difficult it is to fully grasp and qualify this subject. The outcome is that the economics of the firm is a combination of different subjects, and no single model or theory captures all elements of the puzzle. This chapter is intended to give an overview of some of the key analytical and empirical issues that are debated today, and especially how the distinction between managerial and entrepreneurial evolves but still firms structures the current research agenda on the economics of the firm. |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:hal-00207817_v1&r=hpe |
| By: | Michael Dietrich (Université de Sheffield - University of Sheffield); Jackie Krafft (GREDEG - Groupe de recherche en Droit Economie Gestion - Université de Nice Sophia-Antipolis) |
| Abstract: | The basic sub-text or conjecture of this paper is that an adequate economics of the firm should be historically relevant. The terms “adequate” and “relevant” imply, in the current context, that theoretical frameworks allow explanation of historical developments rather than a rationalisation of these developments. Two possible implications follow from this conjecture. First, given the complexity of historical reality a single theoretical approach to the firm may be inadequate as a general framework to understand actual events. It follows, therefore, that a historically relevant economics of the firm may imply theoretical pluralism. The possible nature of this pluralism is explored in this paper. Secondly, and following on from the first point, if the importance of theoretical pluralism is accepted, different frameworks or approaches to the firm may be relevant in different historical circumstances. Among other things, pluralism might therefore imply a requirement for empirically driven theory. In our context empirically driven suggests that historical reality is an important motivator for the economics of the firm rather than being something that is interpreted as an end product. |
| Date: | 2008–01–21 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:hal-00211196_v1&r=hpe |
| By: | Caruso, Raul; Campiglio, Luigi |
| Abstract: | This short paper presents some preliminary results of an ongoing research work focusing on richness and diversity of economic literature. The key idea is that each article published in an economic journal retains multiple identities. These multiple identities are captured through the use of JEL codes. A sample of top generalist journals has been selected. The relative abundance of all JEL categories has been computed for the period 2000-2006. Moreover, a degree of diversity has been proposed for both the sampled journals and the entire Econlit database. |
| Keywords: | JEL; Econlit; Economic Journals; multiple identities; identity; relative abundance; diversity; evenness; richness. |
| JEL: | A10 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6797&r=hpe |
| By: | Freeman, Alan |
| Abstract: | This paper was originally presented at the ‘Marxism and Political Economy’ conference called by the International Socialist Journal on Saturday 29th September 2007. A revised version was presented to the Historical Materialism conference on 13th November 2007. It enquires why, although national economic equality is one of the most persistent features of the history of capitalism, economics as yet lacks a coherent economic explanation of it. It also enquires why Marxism has failed to develop such an explanation, and concludes that in both cases the inadequacies of existing theory arise from the constraints of the general equilibrium paradigm. In the second case, however, this paradigm is wrongly attributed to Marx. The paper argues that Marx’s own, original theory of value, contains the basis for an economic mechanism of divergence in the formation of market value as the average of many producers of differing productivities. The persistence of productivity differentials – excluded by the general equilibrium paradigm – is maintained by a positive feedback mechanism. It yields a surplus (above average) profit to the high productivity producers, who become geographically concentrated within a definite and very stable block of nation-states at an early point in the history of capitalism. From then on, this extra profit could be invested in maintaining a permanent productivity lead. This is an entirely temporal effect and cannot be predicted or reproduced if it is pre-supposed that productivity differentials are ignorable. |
| Keywords: | Inequality; Development; Value Theory; Temporalism; World Systems Theory; Dependency Theory; Globalization; TSSI; General Equilibrium |
| JEL: | O1 O10 O30 B4 O33 B2 B00 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6836&r=hpe |
| By: | Pier Francesco Asso; George A. Kahn; Robert Leeson |
| Abstract: | This paper examines the intellectual history of the Taylor Rule and its considerable influence on macroeconomic research and monetary policy. The paper traces the historical antecedents to the Taylor rule, emphasizing the contributions of three prominent advocates of rules--Henry Simons, A.W. H. Phillips, and Milton Friedman. The paper then examines the evolution of John Taylor's thinking as an academic and policy advisor leading up to his formulation of the Taylor rule. Finally, the paper documents the influence of the Taylor rule on macroeconomic research and the Federal Reserve's conduct of monetary policy. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedkrw:rwp07-11&r=hpe |
| By: | Freeman, Alan |
| Abstract: | This paper revisits one of the classic debates on world capitalist development – the ‘transition to capitalism’ debate framed in Robert Brenner’s classic critique of World Systems and Dependency Theory. It was originally presented to the July 2007 conference of the International Confederation for Pluralism in Economics (ICAPE) and in a slightly modified form, to the September 2007 conference of the UK Political Studies Association. The paper argues that the 1970s discussion was founded on an deeply flawed understanding of the mechanisms by which modern capitalist production relations produce what is termed ‘backwardness’. Economics has failed to develop an adequate explanation for the most persistent phenomenon of the modern world – the polarisation of the world’s national economies, grouped within two great and remarkably geographically stable blocs. The reason, I argue in this paper, is the general equilibrium paradigm which predicts that modern capitalist production, left to its own devices, must necessarily even out national differences in productivity, wages, and profits over time. However the reverse happens, and development theory is deprived of an adequate explanation for national differentiation in terms of the ordinary mechanisms of the capitalist market. This loss is compounded by parallel failure within Marxist value theory. The paper locates the origin of this failure within the systematic replacement of this theory by an equilibrium re-interpretation of it, converting it into a variant of the very orthodoxy to which it was supposed to offer an alternative. The paper assesses the skewed character which results, in contemporary accounts (both within and outside economics) of development, dependency, inequality and imperialism. These are driven to assign inappropriate weight to ‘political and ‘cultural’ mechanisms or to classify the economic circumstances of the poor nations as in some sense exceptional or abnormal for capitalism. The idea that underdevelopment – ‘backwardness’ – is a failure to catch up or an absence of modernity, has thus become the conceptual framework for discussing the national difference produced by modernity. This is particularly clear in the evidently symbiotic and mutually conditioned development of slavery in the USA and the Industrial Revolution (with Cotton at its centre) in the UK. Antebellum slavery, once the economic mechanisms are clarified, can be understood not as a backward survival from a precapitalist era, but a product of modern capitalism itself. This principle is a general one. ‘Backwardness’, I argue, is a disguised outcome of the most modern of all economic processes – the constant technical revolutions that characterise industrial capitalism. |
| Keywords: | Inequality; Development; Value Theory; Temporalism; World Systems Theory; Dependency Theory; Globalization; TSSI; General Equilibrium |
| JEL: | O1 O10 O30 B4 O33 B2 B00 |
| Date: | 2007–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:6831&r=hpe |
| By: | Hoff, Karla |
| Abstract: | Joseph E. Stiglitz, 2001 Nobel Laureate in Economics, helped create the theory of markets with asymmetric information and was one of the founders of modern development economics. He played a leading role in an intellectual revolution that changed the characterization of a market economy. In the new paradigm, the price system only imperfectly solves the information problem of scarcity because of the many other information problems that arise in the economy: the selection over hidden characteristics, the provision of incentives for hidden behaviors and for innovation, and the coordination of choices over institutions. |
| Keywords: | Labor Policies,Economic Theory & Research,,Debt Markets,Financial Intermediation |
| Date: | 2008–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4478&r=hpe |
| By: | J. Heinrich |
| Abstract: | This paper lays out an evolutionary theory for the cognitive foundations and cultural emergence of the extravagant displays (e.g., ritual mutilation, animal sacrifice, and martyrdom) that have so often tantalized social scientists, as well as more mundane actions that influence cultural learning and historical processes. In Part I, I use the logic of natural selection to build a theory for how and why seemingly costly displays influence the cognitive processes associated with cultural learning—why do “actions speak louder than words.†The core idea is that cultural learners can avoid being manipulated by their potential models (those they are inclined to learn from) if they are biased toward models whose actions/displays would seem costly to the model if he held beliefs different from those he expresses verbally. I call these actions inferentially potent displays. Predictions are tested with experimental work from psychology. In Part II, I examine the implications for cultural evolution of this evolved bias in human cultural learning. The formal analytical model shows that this learning bias creates evolutionarily stable sets of interlocking beliefs and individually-costly practices. Part III explores how cultural evolution, driven by competition among groups or institutions stabilized at alternative sets of these interlocking belief-practice combinations, has led to the association of costly acts, often in the form of rituals, with deeper commitments to group beneficial ideologies, higher levels of cooperation within groups, and greater success in competition with other groups or institutions. Predictions are explored with existing cross-cultural, ethnographic, ethnohistorical and sociological data. I close by briefly sketching some further implications of these ideas for the study of religion and ritual. |
| Keywords: | Length 51 pages |
| Date: | 2007–12 |
| URL: | http://d.repec.org/n?u=RePEc:esi:evopap:2007-21&r=hpe |
| By: | Jackie Krafft (GREDEG - Groupe de recherche en Droit Economie Gestion - Université de Nice Sophia-Antipolis) |
| Abstract: | The purpose of this chapter is thus to understand the ups and downs of this industry, and especially to identify in Schumpeter’s vision of capitalism what could be the determinants of such an evolution. In a nutshell, the paper will investigate to what extent the key notions of Schumpeter’s analysis – which include economic development and creative destruction, entrepreneurship and large firms, patterns of industry dynamics and evolution, competition as a process, and invention and innovation – can shed a new light on the evidence of the rise and decay of the telecommunications industry viewed as an exemplifying and central figure of modern economic capitalism. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:hal-00211744_v1&r=hpe |
| By: | Fatiha Talahite (CEPN - Centre d'économie de l'Université de Paris Nord - CNRS : UMR7115 - Université Paris-Nord - Paris XIII) |
| Abstract: | North (2005) attribue l’échec économique du monde musulman aux institutions et à leur incapacité à promouvoir l’adaptation à l’environnement et l’innovation. Il fait remonter cet échec au moyen âge tardif, aux Xe-XIIIe siècles. Pour sa démonstration, il s’appuie sur les travaux d’Avner Greif et Timur Kuran. Le premier, met en œuvre les notions opposées d’échange personnel/impersonnel, de relations formelles/informelles d’échange. Il aborde le changement institutionnel comme un phénomène endogène à la communauté, fondé sur les comportements individuels, et utilise la théorie des jeux pour le modéliser, dans une démarche se rapprochant de celle de Aoki (2001). Tandis que North et Kuran privilégient une approche globale ou systémique. North s’inscrit dans le temps long de l’histoire de l’humanité qu’il traite à l’échelle planétaire. Il intègre la culture à travers les notions de ‘croyance comportementale’ et d’’héritage cognitif’. Ces trois auteurs partagent le projet de décrire et expliciter le lien entre culture et développement économique, ainsi que la méthode de comparaison historique. Ils convergent dans leur tentative de définir un cadre conceptuel rigoureux pour l’analyse institutionnelle du développement économique. Cependant, leurs démarches sont très différentes, de par les cadres analytiques qu’ils construisent et les résultats auxquels ils aboutissent. Nous nous attachons à décrire et comparer ces trois démarches. Nous les interrogeons du point de vue de l’état des connaissances historiques et de l’analyse institutionnelle comparée du développement. Nous réfléchissons enfin aux perspectives d’approfondissement : en intégrant l’idée d’une diversité institutionnelle constitutive de l’histoire ; en proposant, au lieu d’une approche en termes de performance économique (évaluée à travers le taux de croissance du PIB, ce qui pose problème à une telle échelle historique), une caractérisation plus complexe et nuancée de la marche des économies et des sociétés. |
| Keywords: | histoire économique, institutions, Moyen-Orient et Afrique du Nord. |
| Date: | 2008–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00203636_v1&r=hpe |
| By: | Bernard Monjardet (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I) |
| Abstract: | We first present the concept of duality appearing in order theory, i.e. the notions of dual isomorphism and of Galois connection. Then, we describe two fundamental dualities, the duality extension/intention associated with a binary relation between two sets, and the duality between implicational systems and closure systems. Finally, we present two "concrete" dualities occuring in social choice and in choice functions theories. |
| Keywords: | antiexchange closure operator, Galois connection, implicational system, path-independent choice function, simple game. |
| Date: | 2007–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00202326_v1&r=hpe |
| By: | James Caporaso; Sidney Tarrow |
| Keywords: | European Court of Justice; free movement; institutions; labour contract; political economy; regulations; Single Market |
| Date: | 2008–01–15 |
| URL: | http://d.repec.org/n?u=RePEc:erp:reconx:p0020&r=hpe |
| By: | B. Douglas Bernheim; Antonio Rangel |
| Abstract: | This paper proposes a choice-theoretic framework for evaluating economic welfare with the following features. (1) In principle, it is applicable irrespective of the positive model used to describe behavior. (2) It subsumes standard welfare economics both as a special case (when standard choice axioms are satisfied) and as a limiting case (when behavioral anomalies are small). (3) Like standard welfare economics, it requires only data on choices. (4) It is easily applied in the context of specific behavioral theories, such as the [beta], [delta] model of time inconsistency, for which it has novel normative implications. (5) It generates natural counterparts for the standard tools of applied welfare analysis, including compensating and equivalent variation, consumer surplus, Pareto optimality, and the contract curve, and permits a broad generalization of the of the first welfare theorem. (6) Though not universally discerning, it lends itself to principled refinements. |
| JEL: | D01 D60 H40 |
| Date: | 2008–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13737&r=hpe |
| By: | Michael Dietrich (Université de Sheffield - University of Sheffield); Jackie Krafft (GREDEG - Groupe de recherche en Droit Economie Gestion - Université de Nice Sophia-Antipolis) |
| Abstract: | L’objet de cet article est, sur la base du cas General Motors Fisher Body, de discuter de la pertinence historique des théories de la firme, et de proposer des pistes permettant de construire des théories pertinentes historiquement. Nous considérons l’ouverture de toutes les archives historiques concernant cette intégration verticale comme une opportunité de redécouvrir ce cas, et de réfléchir sur ce que doit être une théorie de la firme pertinente historiquement. |
| Date: | 2008–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:hal-00203553_v1&r=hpe |