nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2012‒07‒01
eleven papers chosen by
Erik Thomson
University of Manitoba

  1. Malinvaud on Wicksell’s legacy to capital theory: some critical remarks By Fratini, Saverio M.
  2. Once Beaten, Never Again: Imitation in Two-Player Potential Games By Duersch, Peter; Oechssler, Jörg; Schipper, Burkhard C.
  3. No institution is a free lunch: a reconstruction of Ronald Coase By Ugo Pagano
  4. Income Inequality, Redistribution and Poverty: Contrasting rational choice and behavioural perspectives By Luebker, Malte
  5. Global sustainability: the sequel By Robin Davies
  6. The Environmental Aspect of “Making People Rich as the Top Priority” in China: a Marxian Perspective By Faber, Malte; Petersen, Thomas
  7. The value of useless information By Larbi Alaoui
  8. Boats and tides and "Trickle Down" theories: What economists presume about wellbeing when they employ stochastic process theory in modeling behavior By Anderson, Gordon
  9. On recent reformulations of the labour theory of value By Fabio petri
  10. The Crisis of Intellectual Monopoly Capitalism By Ugo Pagano
  11. Arbeit, Glück und Nachhaltigkeit: Warum kürzere Arbeitszeiten Wohlbefinden, Gesundheit, Klimaschutz und Ressourcengerechtigkeit fördern By Kopatz, Michael

  1. By: Fratini, Saverio M.
    Abstract: This critique of Malinvaud’s article of 2003 on Wicksell’s legacy to capital theory focuses in particular on three points raised there. The first regards the given amount of existing capital that appears in Wicksell’s theory and its connection with his alleged “missing equation”, the second the particular notion of the marginal product of capital adopted by Malinvaud and the meaning of its equality with the rate of interest, and the third the concept of the average period of production taken by Malinvaud from Hicks and its inverse relation to the rate of interest.
    Keywords: Average period of production; Malinvaud; marginalist theory; theory of capital; Wicksell
    JEL: D33 B13 D24
    Date: 2012–06–20
  2. By: Duersch, Peter; Oechssler, Jörg; Schipper, Burkhard C.
    Abstract: We show that in symmetric two-player exact potential games, the simple decision rule "imitate-if-better" cannot be beaten by any strategy in a repeated game by more than the maximal payoff difference of the one-period game. Our results apply to many interesting games including examples like 2x2 games, Cournot duopoly, price competition, public goods games, common pool resource games, and minimum effort coordination games.
    Keywords: Imitate-the-best; learning; exact potential games; symmetric games; relative payoffs; zero-sum games
    JEL: D43 C73 C72
    Date: 2012–06–21
  3. By: Ugo Pagano
    Abstract: The two major contributions of Ronald Coase, written at distant points of his long life, have been often interpreted as different and, somehow, contradicting views of the merits of the market mechanism. We argue that the underlying point of the two articles is the same and it can be summarized by the statement that no institution is a free lunch. When the unity of the Coasian theory is properly understood, it offers a powerful challenge to standard neo-classical production theory and opens new analytical tools to understand and to compare the institutions of production.
    Keywords: Coase, Returns to Scale, Transaction Costs, Production Entitlements
    JEL: B29 D02 D29 L23
    Date: 2012–02
  4. By: Luebker, Malte
    Abstract: Based on the standard axiom of individual utility maximization, rational choice has postulated that higher income inequality translates into greater redistribution by shaping the median voter?s preferences. While numerous papers have tested this propositi
    Keywords: income distribution, redistribution, median voter theorem, behavioural economics
    Date: 2012
  5. By: Robin Davies (Development Policy Centre, Crawford School of Public Policy, The Australian National University)
    Abstract: The Global Sustainability Panel (GSP), formed by UN Secretary-General Ban Ki-moon in August 2010, was asked to think big – to come up with a 'new development paradigm' and mechanisms for putting it into practice. Its product was, among other things, meant to help frame the forthcoming third global conference on environment and development, Rio 20. The imposing precedent for this was Our Common Future, the 1987 report of Gro Harlem Brundtland's World Commission on Environment and Development. The GSP report, Resilient People, Resilient Planet, inevitably borrows much its content from Brundtland but also exhibits interesting differences. This paper is a selective reflection on what the GSP report adds to, and subtracts from, Brundtland's bedrock. The comparison is anchored in a discussion of two specific themes: international cooperation and resilience. The first is prominent in Brundtland and largely absent in the GSP report; the second, vice versa. I suggest that much of what is puzzling or unsatisfactory in the GSP report flows from a systematic blindness with respect to the need for policy cooperation between states, and with respect to the uses of the concept of resilience.
    JEL: K32 P16 P26 Q20 Q28
    Date: 2012–06
  6. By: Faber, Malte; Petersen, Thomas
    Abstract: Income inequality in China is severe; measured by the Gini-coefficient it amounted to 0.46 in 2011; wealth distribution is even worse with 0.61. These disparities led to a major shift in emphasis of politics in general and of the Five-Year Plan for National Economic and Social Development by the National People´s Congress in particular. While previously the strategy of the Five-Year Plans had been “Making the nation [our emphasis] rich as top priority”, this was changed to “Making people [our emphasis] rich as top priority” in the 12th Five-Year Plan (2011-2015), enacted in March 2011.The strategic change from “nation” to “people” indicates that the political decision-makers in China accepted the aim of a fair income distribution as a political issue of great importance. In this paper, richness is defined in the political-philosophical tradition as the right measure for one’s own needs and wants; only its environmental aspect is focused on in this study. The development of the Chinese environmental conditions is compared with the German ones and the former’s future outlook is judged optimistically because of the achievements in the last five years. However, the complexity and fragility of the environmental system will within a decade confront Chinese politicians with the same problems as it does right now in Germany. In order to provide a solution addressing this development, this paper analyzes what Karl Marx had to say on the long-run dynamics of the economic system. He saw poverty as a necessary yet unintended consequence of the capitalistic system and used this insight as a “precision tool for the study of social change” (Elster 1986), which can also be employed to examine the unintended repercussions of economic activity on nature. Marx, who studied environmental and resource issues in detail, thought that the inventiveness of the capitalistic system would finally overcome all of them in the course of time. In view of the fact that three billion people on earth still have a backlog demand to satisfy basic needs and in addition a further three billion are expected to be born until 2050, the future of the natural environmental conditions looks somber. If it is not possible to decouple economic growth from ensuing environmental strain, Marx may well be right after all in his prediction that the capitalistic system will collapse, although in quite a different manner than he thought. This being the case we take recourse to the thoughts of one of the influential intellectual German figures, to Romano Guardini. He foresaw changes in the self-perception of humankind and in the comprehension of nature. These imply a shift in the ethos of government as well, which would in turn pose three great challenges to politics: (i) understanding nature in a new light, (ii) listening to what drives human hearts, and (iii) governing according to law.
    Keywords: Wealth; Distribution; PR China; Environment; Sustainabilit y
    JEL: Q56 B14 B51 D31 D63 D90 O13 P26
    Date: 2012–06–21
  7. By: Larbi Alaoui
    Abstract: There are many situations in which individuals have a choice of whether or not to observe eventual outcomes. In these instances, individuals often prefer to remain ignorant. These contexts are outside the scope of analysis of the standard von Neumann-Morgenstern (vNM) expected utility model, which does not distinguish between lotteries for which the agent sees the final outcome and those for which he does not. I develop a simple model that admits preferences for making an observation or for remaining in doubt. I then use this model to analyze the connection between preferences of this nature and risk-attitude. This framework accommodates a wide array of behavioral patterns that violate the vNM model, and that may not seem related, prima facie. For instance, it admits self-handicapping, in which an agent chooses to impair his own performance. It also accommodates a status quo bias without having recourse to framing effects, or to an explicit definition of reference points. In a political economy context, voters have strict incentives to shield themselves from information. In settings with other-regarding preferences, this model predicts observed behavior that seems inconsistent with either altruism or self-interested behavior.
    Keywords: Value of information, uncertainty, recursive utility, doubt, unobserved outcomes, unresolved lotteries
    JEL: D03 D80 D81 D64
    Date: 2012–04
  8. By: Anderson, Gordon
    Abstract: Aphorisms that "Rising tides raise all boats" or that material advances of the rich eventually "Trickle Down" to the poor are really maxims regarding the nature of stochastic processes that underlay the income/wellbeing paths of groups of individuals. This paper looks at the implications for the empirical analysis of wellbeing of conventional assumptions regarding such processes which are employed by both micro and macro economists in modeling economic behavior. The implications of attributing different processes to different groups in society following the club convergence literature are also discussed. Various forms of poverty, inequality, polarization and income mobility structures are considered and much of the conventional wisdom afforded us by such aphorisms is questioned. To exemplify these ideas the results are applied to the distribution of GDP per capita in the continent of Africa. --
    Keywords: Stochastic processes,poverty,inequality,wellbeing measurement
    JEL: C22 D63 D91 I32 O47
    Date: 2012
  9. By: Fabio petri
    Abstract: The paper discusses three redefinitions of the labour theory of value: the New Interpretation of Duménil and Foley, the approach of Wolff-Callari-Roberts, and the Temporal Single System approach. In them the labour theory of value loses the role of instrument for the determination of the rate of profit and becomes a gratuitous reinterpretation of independently determined prices as ‘representing’ quantities of labour value on the basis of the undemonstrated postulate that only labour produces exchange value. It is argued that these approaches are unable to defend the thesis that profits result from labour exploitation because such a thesis must rest on the causes of wages below their potential maximum, causes that these redefinitions leave unexplained and in fact open to neoclassical explanations. They evidence an imperfect grasp of the foundations of the thesis in Marx that labour is exploited, foundations better grasped by P. Garegnani and clarified here with an example.
    JEL: B51
    Date: 2012–06
  10. By: Ugo Pagano
    Abstract: The last three decades have witnessed the emergence of a new species of capitalism. In spite of marked differences among its different national varieties, a common characteristic of this species can be found in the global monopolization of knowledge. This monopolization involves hierarchical relations among firms and between capital and labor because the capital of some firms includes the exclusive ownership of much of the knowledge used in production. Since the 1994 TRIPS agreements, the growing commoditization of knowledge has extended the role of closed science and closed markets at the expense of open science and open markets. The intrinsic long-term dynamics of this species of capitalism are increasingly characterized by inequality and stagnation. In order to exit from the current crisis, we must change many features of Intellectual Monopoly Capitalism and rely on an eclectic approach that draws insights from the Liberal, the Keynesian and the Marxian traditions
    Keywords: intellectual monopoly, great depression, eclecticism
    JEL: F55 G01 B52 E11 E12
    Date: 2012–02
  11. By: Kopatz, Michael
    Abstract: Umwelt- und Wirtschaftspolitik, so schien es Jahrzehnte lang, stehen im Widerspruch. Was hilft der gesunde Wald, wenn Millionen keine Arbeit haben? Zwar gehen mit Arbeitslosigkeit seit Einführung der sozialen Sicherungssysteme nicht länger Not, Leid und Elend einher. Aber das Stigma bedrückt die Betroffenen und ist für die Gesellschaft eine Last. Und so ist die Schaffung von Arbeitsplätzen das Kernziel aller Politik. Allzu oft werden dabei allerdings die Interessen der zukünftigen Generationen vernachlässigt. Neue Straßen und Flughäfen oder deren Ausbau wie auch Gewerbeparks im Grünen werden mit dem Arbeitsplatzargument legitimiert. Dabei gibt es zur Bekämpfung von Arbeitslosigkeit ein sozial und ökologisch wesentlich verträglicheres Konzept: die gerechtere Verteilung der zur Verfügung stehenden Erwerbsarbeitszeit. Die Arbeitslosigkeit ließe sich zumindest rechnerisch abschaffen, wenn die Menschen im Schnitt 30 Stunden in der Woche für Lohn arbeiteten. Dieser als Kurze Vollzeit für alle bezeichnete Ansatz ist so plausibel, dass man sich über die dürftige Resonanz in Politik und Gesellschaft wundert. Das Impulspapier stellt Zusammenhänge von Wachstum, Arbeitsplätze, Glück und Nachhaltigkeit her. -- Environmental and economic policy seemed to have been in conflict for decades. But what use is a healthy forest when millions of people are without work? Even if unemployment - since the introduction of social security systems - does no longer necessarily lead to misery, distress and suffering, the stigma has a depressing effect on the concerned person and becomes a burden for society. Consequently creating jobs is the core objective of all kind of policy. The interests of future generations however are often neglected in this context. Construction or extension of streets and airports or for example industrial parks in the country are advocated with the argument of new employment. At the same time a socially and ecologically much more appropriate concept exists: The fairer distribution of paid work. In purely mathematical terms unemployment could be suppressed by an average of 30 paid working hours per week. Given the plausibility of this approach called Short fulltime for everyone the weak response in politics and society is surprising.
    Keywords: Arbeitszeit,Arbeitsverkürzung,Arbeit fairteilen,Zeitwohlstand,Teilzeit,Teilzeitarbeit,Erwerbsarbeit,Eigenarbeit,Muße,Halbtagsgesellschaft,30-Stunden-Gesellschaft,Gelassenheit,Entspannung,Zufriedenheit,Subjektives Wohlbefinden,Gesundheitsförderung,Kurze Vollzeit für alle,Glückspolitik,Glück,Umweltschutz,Umweltpolitik,Work life Balance,Teilhabegerechtigkeit,Klimawandel,Mindestlohn,Wachstum,Wirtschaftswachstum,Wachstumgsdogma,Stagnationsprävention,Resilienz,Eigenarbeit,Ehrenamtliches Engagement
    Date: 2012

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