nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2009‒11‒21
six papers chosen by
Erik Thomson
University of Manitoba

  1. Saving, Investment, Greed, and Original Accumulation Do Not Explain Growth By McCloskey, Deirdre
  2. The life and times of Nicolas Dutot By François Velde
  3. Richard M. Goodwin: a pioneer in the field of economic dynamics between the two Cambridges By Massimo Di Matteo; Serena Sordi
  4. A humanistic approach to organizations and to organizational decision-making By Rosanas, Josep M.
  5. Institutions and the environment: the case for a historical political economy By Ali DOUAI (GREThA-GRES); Damien TALBOT (GREThA-GRES)
  6. Fairness Concerns in Environmental Economics - Do They Really Matter and If So How? By Johansson-Stenman, Olof; Konow, James

  1. By: McCloskey, Deirdre
    Abstract: Thrift was not the cause of the Industrial Revolution or its astonishing follow on. For one thing, every human society must practice thrift, and pre-industrial Europe, with its low yield-seed ratios, did so on a big scale. British thrift during the Industrial Revolution, for another, was rather below the European average. And for still another, savings is elastically supplied, by credit expansion for example (as Schumpeter observed). Attributing growth to investment, therefore, resembles attributing Shakespeare’s plays to the Roman alphabet: “necessary” in a reduced sense, but in fact an assumed background, not the cause in any useful sense. Certainly Europeans did not develop unusual greed, and the Catholics---in a society of bourgeois dignity and liberty---did as well as the Protestants (in Amsterdam, for example). Ben Franklin, for example, was not (as D. H. Lawrence portrayed him in a humorless reading of this most humorous man) “dry and utilitarian.” If capitalism accumulates “endlessly,” as many say, one wonder why Franklin give up accumulating at age 42. The evidence also does not support Marx’s notion of an “original accumulation of capital.” Saving and investment must be used when they are made, or they depreciate. They cannot accumulate from an age of piracy to an age of industry. Yet modern growth theory, unhappily, reinstates as initiating the theory of stages and, especially, capital accumulation. They are not initiating, whether in physical or human capital. Innovation 1700-2010 pushed the marginal product of all capitals steadily out, and the physical and human capital followed.
    Keywords: Industrial Revolution; thrift; Europe; capital accumulation; innovation; growth theory; economic history; saving; investment; bourgeois dignity; human capital; physical capital
    JEL: N10 N11 N13 N0
    Date: 2009–07–07
  2. By: François Velde
    Abstract: Nicolas Dutot (1684–1741) is an important figure for the history of economic thought, as a pioneer in monetary theory and price statistics, and for economic history as a chronicler of John Law’s System. Yet until recently very little about him was known, some of it incorrect. I present extensive research that reveals a remarkable career rising from humble origins and full of surprises. He spent his formative years in the ranks of the “ancienne finance” he was thought to despise, and then worked for the chamber of justice that he so decried in his writings, only to be sent to the Bastille for corruption. After working for Law’s Bank and retiring quite comfortably thereafter, he continued to socialize with his pre-System financier and banker friends, joined a short-lived learned society, and accumulated a substantial library that reveals much about his tastes and affinities. The portrait that emerges is at odds with the image of an honest accountant he tried to project, but also richer and more engaging.
    Date: 2009
  3. By: Massimo Di Matteo; Serena Sordi
    Abstract: In the attempt to answer three (interrelated) questions, we concentrate on a crucial step in Goodwin’s (RMG) life: his move from Cambridge, Mass. to Cambridge, UK. Why did RMG not get a permanent position at Harvard? How did RMG reach the decision to settle down in Cambridge, UK? Why was it that RMG never finished the book on economic dynamics he had started to write at Harvard? In answering these questions we show that the material available in the Goodwin Archive at the University of Siena is invaluable and adds much to the ‘known story’.
    Keywords: Richard M. Goodwin, economic dynamics, archive, Harvard University, Cambridge University.
    JEL: B31
    Date: 2009–09
  4. By: Rosanas, Josep M. (IESE Business School)
    Abstract: This paper attempts to take steps towards the formulation of a more human approach to the theory of the firm than the conventional economics-based models. Unbounded rationality, self-interest and the absence of learning are shown to be crucial assumptions of conventional economic theory. Then, the essential assumptions of an alternative approach are put forward and discussed. Next, I present an alternative view of organizations, which has its foundations in the concepts of mission, distinctive competence, identification and unity. Finally, the implications of such an approach for management decision-making are shown, emphasizing that three criteria have to be considered in any non-trivial decision in an organizational context.
    Keywords: theory of the firm; bounded rationality; self-interest; distinctive competence; mission; identification;
    Date: 2009–08–05
    Abstract: This paper provides a critical review of the ‘state of the art’ of institutional analysis applied essentially by social-ecological economists in the environmental domain. It highlights both areas of strength and issues where there is still room for improvement in analytical terms, by construing these approaches in the context of a general taxonomy of institutionalisms – widely used in politics and applied here in the economic realm. This provides the rationale for re-construing a number of related issues drawn from the core insights of a historical institutionalist approach to human-nature
    Keywords: Ecological economics, institutional analysis, socio-economy, regulation
    JEL: Q01 Q57 B52 P16
    Date: 2009
  6. By: Johansson-Stenman, Olof (Department of Economics, School of Business, Economics and Law, Göteborg University); Konow, James (Department of Economics, Loyola Marymount University)
    Abstract: Are fairness concerns of relevance to environmental economics and, if so, are they sufficiently structured to improve analysis in this field? On both of these questions, we answer in the affirmative, arguing that people’s fairness views are based on both general rules and the context, where context refers to the set of variables and persons employed to interpret and apply the principles. The fairness rules analyzed are accountability (i.e., rewards that are proportional to contributions individuals control), efficiency, need and equality. We conclude that stakeholders typically exhibit a “fairness bias”, i.e., they tend, consciously or not, to interpret and apply fairness principles in a self-serving manner, whereas the views of spectators, or impartial third parties, tend to converge significantly more. Further, we argue that fairness considerations are relevant to both descriptive and prescriptive analysis in environmental economics. These fairness concerns are reflected in the behavior of private and public decision-makers and have potentially important policy implications through the overall social objective function.<p>
    Keywords: Justice; Fairness rules; accountability; equity theory; environmental economics
    JEL: D63 H40 Q50
    Date: 2009–11–16

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