nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2015‒11‒07
seventeen papers chosen by
Erik Thomson
University of Manitoba

  1. Understading Neoliberal Politics By The Mediation Of Institutional Economics By İlkben Akansel
  2. At the origin of the notion of “creative goods” in economics: Scitovsky and Hawtrey By Antonio Bariletti; Eleonora Sanfilippo
  3. Lawson on Veblen on Social Ontology By Davis, John B.
  4. Examining Utility Function of “Happiness” Indicator in the Context of Economic Growth and Income Inequality By Asuman Çukur
  5. Economics and the Modern Economic Historian By Ran Abramitzky
  6. Do People Seek to Maximize Their Subjective Well‐Being? By Fleurbaey, Marc; Schwandt, Hannes
  7. The Pioneers’ Arguments for Formulating Economic Problems Mathematically By Sandelin, Bo
  8. Corporate Social Responsibility: An Islamic Perspective By Elasrag, Hussein
  9. Capital, labour, democracy and the end of capitalism By Annamaria Artner
  10. Piketty's Marx Or Das Capital For The Twenty First Centiury: All That Is Solid Melts Into Air? By Eren Ahmet
  11. The Economic Origins Of Neoliberism By İlkben Akansel
  12. Gender priming and altruism in a random sample By Boschini, Anne; Dreber, Anna; von Essen, Emma; Muren, Astri; Ranehill, Eva
  13. Human rights as a basis for justice in the European Union By Douglas-Scott, Sionaidh
  14. Moral Incentives: Experimental Evidence from Repayments of an Islamic Credit Card By Leonardo Bursztyn; Stefano Fiorin; Daniel Gottlieb; Martin Kanz
  15. How tight is the link between wages and productivity? : a survey of the literature By Van Biesebroeck, Johannes
  16. Was Controller von Odysseus lernen können By Ahrens, Volker
  17. The New Keynesian Model: an Interpretation of Michael Woodford\'s \"Interest and Prices\" (In French) By Martin ZUMPE

  1. By: İlkben Akansel (Artvin Coruh University, Department of Economics)
    Abstract: Neoliberalism, which cannot be described by a certain rule, includes a wide range of perspective. Therefore, it is a highly effective notion in terms of economics and politics. This efficiency has a mutual meaning in socio-cultural area. However, it is obvious that the most effective area of neoliberal politics is economics, because intended efficiency in politics and socio-cultural levels are provided through applicable economics politics. Although it has some certain notions derived from all the economics premises, neoliberalism fundamentally forces financial market orders and thus requires the use of state power systematically. Institutional economics is the economics stream established by Thorstein Veblen, linking man’s nature of society with economics affected by Darwin’s ideas of the origins of species. Thus, institutional economics claims that the economics behavior cannot be thought separately from all institutional forms such as social, cultural and politics of the society. So, economics can vary between societies, depending on time and place. This study focuses on two main premises: Putting forward the relationship between mainstream economics (neoclassical economics) and neoliberal economics politics, and the criticism of institutional economics on this. Firstly, relationship between neoliberalism and mainstream economics will be analyzed, then the nature of institutional economics will be examined especially in terms of the thoughts of its founder Thorstein Veblen and finally relationship between neoliberalism and institutional economics will be discussed. By the mediation of new aspects provided by institutional economics to neoliberal economics politics, the applications of economics can be better maintained, and this can create more fair steps towards economics politics.
    Keywords: Neoliberalism, Institutional Economics, Thorstein Veblen, Neoclassical Economics, Mainstream Economics
    JEL: P1
    Date: 2015
  2. By: Antonio Bariletti (University of Cassino and Lazio Meridionale); Eleonora Sanfilippo (University of Cassino and Lazio Meridionale)
    Abstract: The notion of “creativity” has assumed a growing importance in the recent economic literature on happiness, motivations and life-satisfaction. Starting from the seminal contribution of Scitovsky, the effects of “creative goods” and “creative activities” on consumers’ well-being, in connection with cultural, sociological, psychological and educational aspects, have been analyzed. An increasing interest in these concepts has also been shown recently by policy-makers and international institutions (see, e.g., the UNCTAD Reports on Creative Economy, 2010, 2013), in particular in relation to economic growth. On the other hand, a clear and rigorous analytical definition of this category of goods and activities and deep investigation of its peculiarity in comparison with other types of products and activities, broadly defined as comfort or defensive ones, is still lacking in the economic literature. This is why, despite its wide use in economics, the nature of the distinction still remains somehow vague and not univocal. The aim of this paper is to provide a contribution to help clarify this distinction by reconstructing its meaning and scope in the works of Scitovsky (1976, 1992) and Hawtrey (1925) – the first economists who have tried to provide an analytical content to the notion of creative goods and activities in their theoretical frameworks.
    JEL: B31 B41 D01 D11
    Date: 2015–10
  3. By: Davis, John B. (Department of Economics Marquette University)
    Abstract: This paper discusses Lawson’s use of Veblen’s concept of ‘neoclassical economics’ and argument that the category of neoclassical economics should be jettisoned on the grounds that it obfuscates effective critique of mainstream economics. The paper links Lawson’s critique of closed systems and Veblen’s cumulative causation view by offering a reflexivity, feedback loop formulation of the latter aimed at overcoming the pre-Socratic dichotomy between Heraclitian and Parmenidean ontological thinking. The paper then reviews what this implies for three key social ontology doctrines: social reality as processual and highly transient; emergence and the appearance of novelty; the internal relatedness of social reality. Final remarks address the use of the ‘neoclassical economics’ concept.
    Keywords: neoclassical economics, Veblen, Lawson, closed systems, cumulative causation, reflexivity
    JEL: B13 B41 B52
    Date: 2015–08
  4. By: Asuman Çukur (Yildirim Beyazit University)
    Abstract: The happiness studies in economics substantially increased over past decades. Especially the nature of relationship between economic growth (income, relative income and income change, unemployment, inflation, etc,) and happiness has been the center of many debates among economists and other social scientists. Those studies have been applied different economical models in which different national and cross-national micro and macro datasets through cross sectional and panel analysis are used. Most of these studies have been provided that happiness or related concepts (subjective wellbeing, etc,) could be an important proxies or experienced utilities for economic growth. On the other hand seminal works of Easterlin (1974,1995) have cast a serious doubt on the utility function of happiness which is called Easterlin Paradox. These studies showed that even though substantial income growth in Western countries over the last fifty years, income changed did not relate to rise in reported happiness level. From these perspectives economic growth per se has little impact on happiness and therefore should not be primary goal of economic and public policies. In this context I try to review the related empirical studies and approaches to assess the utility function of happiness. This critique especially will focus on the role of economic inequality and related other factors that can influence the link between income and happiness. Also, the methodological problems (e.g., using aggregate data, cross-sectional data, distribution of happiness data, etc.) in those studies will be discussed thoroughly. Especially, findings and methodological discussions from health economics (e.g., income and health relationship) will be utilized to assess the utility function of happiness. Finally, these findings and arguments will be discussed in Turkish economical context where very few study available in this topic.
    Keywords: Happiness, Income, Income Inequality
    JEL: D31 D6 I3
    Date: 2015
  5. By: Ran Abramitzky
    Abstract: I reflect on the role of modern economic history in economics. I document a substantial increase in the percentage of papers devoted to economic history in the top-5 economic journals over the last few decades. I discuss how the study of the past has contributed to economics by providing ground to test economic theory, improve economic policy, understand economic mechanisms, and answer big economic questions. Recent graduates in economic history appear to have roughly similar prospects to those of other economists in the economics job market. I speculate how the increase in availability of high quality micro level historical data, the decline in costs of digitizing data, and the use of computationally intensive methods to convert large-scale qualitative information into quantitative data might transform economic history in the future.
    JEL: B0 N0
    Date: 2015–10
  6. By: Fleurbaey, Marc (Princeton University); Schwandt, Hannes (University of Zurich)
    Abstract: In a new survey we ask respondents, after a standard Subjective Well‐Being (SWB) question, if they can think of changes in their lives that would improve their SWB score. If the SWB score is just one argument among others in the respondents' goals in life, they should easily find ways to improve it, at the expense of other dimensions they care about. Our results suggest that close to 90% of the respondents actually seek to maximize their SWB. The life satisfaction question appears the best contender as the "maximand" in the contest, before the ladder‐of‐life question and felt happiness. Among the other goals that people pursue and for which they are willing to sacrifice some of their SWB, the prominent appear to be about their relatives and about their future self.
    Keywords: subjective well‐being, life satisfaction, happiness, life goals, utility
    JEL: D03 D60
    Date: 2015–10
  7. By: Sandelin, Bo (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: The nineteenth century pioneers in formulating economic problems mathematically often felt that they needed to explain their reasons for using mathematics. We will look at the arguments of Cournot, Thünen, Gossen, Jevons, Walras, Edgeworth, Marshall, Fisher, Wicksell, and Pareto. Three main arguments can be found: First, mathematics provides greater clarity of presentation, secondly, economics is fundamentally similar to the mathematical natural sciences, especially physics, and third, mathematics can help economists themselves to control the reasoning in their analysis.<p>
    Keywords: History of economic thought; economic methodology; mathematics; marginalism
    JEL: B41 C00
    Date: 2015–10
  8. By: Elasrag, Hussein
    Abstract: Islam provides a basis and guideline for living one’s life. Within this, there is a very detailed concept of ethical and social behaviour which allows us to deduce that the concept of social responsibility automatically has a role in Islam. This is a critical point that must be firstly understood as the role of moral ethics has been underpinned in Islam for over 1400 years whilst the concept of CSR remains relatively new for businesses today. The scope of this book is to briefly outline some of the major aspects of Islam which give consideration for businesses and their push towards Corporate Social Responsibility. It considers the belief system of Islam and how this belief has a significant underpinning of social behaviour
    Keywords: Islam, Corporate Social Responsibility, Islamic perspective
    JEL: D21 G2 G21 L22 M0 M14
    Date: 2015–05–05
  9. By: Annamaria Artner (Institute of World Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences)
    Abstract: Since 1989, due to historical developments and the works of theorists such as Francis Fukuyama, authoritative sources have claimed that the combination of a “free market economy” and “liberal democracy built on equal rights” results in the most developed form of human society. Taking into consideration that development is driven by contradictions, the above premise is true if it is accepted that no contradictions exist within or between a free market economy and liberal democracy. If, however, such contradictions do exist, the potential development of human society cannot be said to ultimately conclude with capitalism. Therefore, democratic capitalism may be the most developed and final form of capitalism, but not that of human society in general. This essay aims to clarify the meanings of free market and democracy, and their relationship. Based on the general and specific definitions of democracy, it distinguishes between the concepts of de jure and de facto equality, and analyses the impact of the most important working mechanism of a market economy – competition – on manifold inequalities. It discusses the real inequalities manifested in income and the ownership of the means of production, and also the inequalities within capital, and between capital and wage labour. By reflecting upon these inequalities, the study looks at how free market forces work towards the erosion of democracy and constrain the practical utilization of democratic institutions.
    Keywords: wage labour, inequality, democracy, market economy, return on capital, competitiveness
    JEL: E22 E24 F01 F50 F52
    Date: 2015–10
  10. By: Eren Ahmet (Artvin Coruh University, Department of Economics)
    Abstract: Piketty almost with a provocative title refers to Marx's "Capital". "Capital in the twenty-first century” is a book of Piketty, working by a group of researchers based on historical and comparative data. The book tries to reveal the tendencies and the movements of the capitalist system covering more than twenty countries and datas of 300 years. The reason for the much discussion of the book, and the importance attached are the references to Marx himself and the “Capital”. In this study relatedness between Piketty's "Capital in the twenty-first century" and Marx's "Capital" will be questioned. This relatedness will be evaluated depending on three basis. The first of these, is the personalities of the authors and their historical background, secondly; the methods and the tools that they use in their work, and finally; the work will be taken regarding the content and results.
    Keywords: na
    Date: 2015
  11. By: İlkben Akansel (Artvin Coruh University, Department of Economics)
    Abstract: Neoliberalism is a notion which cannot be described definitively. Nevertheless, it is a notion affecting economics system in terms of its components. Taking effects since 1970, premises justifying freedom and social efficiency can only be provided by private ownership and free market; therefore, it opposes state intervention. Broadly, arguments of neoliberalism differentiate from liberal arguments, which justify classical liberalism based upon individual and firm, whereas its failure in practice causes many critical arguments. The basis of these failures is upon debating implementations of economics system that is carried on the core of neoliberalism. Neoliberalism can basically be divided into three eras: Chicago School in 1970’s opposing Keynesian economics, end of 1980’s Washington Consensus and since mid-1990’s the era of re-discussing the regulatory role of state. This study aims to examine these three economics era which are the basis of neoliberalism. Examining the features applied for each three political economics, the failure points of neoliberal discourse can be visualized. Consequently, analysis of the economics origin of neoliberal discourse will enlighten the resolution of recent economic crisis.
    Keywords: neoliberalism, Chicago School, Keynesian Economics, Washington Consensus, free market, state regulator
    JEL: P1
    Date: 2015
  12. By: Boschini, Anne (SOFI); Dreber, Anna (Stockholm School of Economics); von Essen, Emma (Aarhus University); Muren, Astri (Dept. of Economics, Stockholm University); Ranehill, Eva (University of Zurich)
    Abstract: We study gender differences in altruism in a large random sample of the Swedish population using a standard dictator game. In our data, a gender gap in altruism emerges when we increase the salience of gender by priming participants with their gender and placing them in a gender-mixed context. In this case women give more than in the baseline, and men give less, thereby creating a significant gender difference in altruism. Our findings provide insight into the conditions under which individuals’ gender identity is made salient.
    Keywords: Gender differences; Random sample; Dictator games; Gender context; Priming; Experiment
    JEL: C91 C93 J16
    Date: 2015–10–23
  13. By: Douglas-Scott, Sionaidh
    Abstract: Justice is a contested concept. A more graspable version of it, it is argued in this paper, is an understanding of it in the context of what is deemed as 'injustice' rather than justice. As such, the paper takes a markedly different approach than the perspectives which have emerged so far. A main theme of this paper is the disjunction between, on the one hand, strong reactions to injustice, and a desire for some affective dimension to the EU, some normative adhesive that might bind the EU as an ethical entity; and on the other, the very great difficulty in identifying an enforceable concept of justice in an EU that continues to be driven by a market mentality. There will always remain a gap between the aspiration for justice and its achievement. While the notion of an EU that does not aspire to justice is unthinkable, and EU law must at least hold out a prospect of justice, the gap between aspiration and achievement remains huge. However, this paper also argues that it is the very sui generis, supranational status of the EU that creates particular obstacles to the realisation of a shared sense of justice. Due to this structural limitation, it is argued that any agreed concept of justice will remain minimalist. However, human rights remain a powerful symbolic and actual force for justice and a better focus for its achievement, whether we understand them as a singular articulation of justice, or as free-standing moral concepts in their own right. It is also crucial to retain a strong sense of injustice and to assess every element of EU law on that basis. This discussion paper is part of a series of contributions to the conference "Towards a Grammar of Justice in EU Law', which took place on 6-7 November 2014 at VU University Amsterdam, sponsored by ACCESS EUROPE Amsterdam, VU Centre for European Legal Studies and the Dutch Research Council VENI grant.
    Keywords: Justice,Injustice,EU as an Ethical Entity,Human Rights
    Date: 2015
  14. By: Leonardo Bursztyn; Stefano Fiorin; Daniel Gottlieb; Martin Kanz
    Abstract: We study the role of morality in the decision to repay debts. Using a field experiment with a large Islamic bank in Indonesia, we find that moral appeals strongly increase credit card repayments. In our setting, all of the bank’s late-paying credit card customers receive a basic reminder to repay their debt one day after they miss the payment due date. In addition, two days before the end of a ten-day grace period, clients in a treatment group also receive a text message that quotes an Islamic religious text stating that “non-repayment of debts by someone who is able to repay is an injustice.” This message increases the share of customers meeting their minimum payments by nearly 20%. By contrast, sending either a simple reminder or an Islamic quote that is unrelated to debt repayment has no effect on the share of customers making the minimum payment. Clients also respond more strongly to this moral appeal than to substantial financial incentives: receiving the religious message increases repayments by more than offering a cash rebate equivalent to 50% of the minimum repayment. Finally, we find that removing religious aspects from the quote does not change its effectiveness, suggesting that the moral appeal of the message does not necessarily rely on its religious connotation.
    JEL: D14 G02 G21 Z10 Z12
    Date: 2015–10
  15. By: Van Biesebroeck, Johannes
    Abstract: This working paper provides a review of the links between wages and productivity, based mainly on the mainstream economic literature (and hence best complemented with other more “heterodox” literature).
    Keywords: wages, labour productivity, measurement, salaire, productivité du travail, mesure, salario, productividad del trabajo, medición
    Date: 2014
  16. By: Ahrens, Volker
    Abstract: Controller scheinen sich untereinander oft mit der Frage zu beschäftigen, welche Rolle sie in Unternehmen spielen und welche Aufgaben von ihnen zu erledigen sind. Der vorliegende Beitrag beobachtet diese Diskussion zum einen vom Standpunkt eines Außenstehenden aus und zum anderen aus einer systemtheoretischen Perspektive. Ausgehend von der Frage, inwieweit Controlling angesichts von Komplexität, daraus folgender Selbstreferenz und operativer Geschlossenheit sozialer Systeme überhaupt möglich ist, werden systemische Interventionskonzepte vorgestellt, die schließlich auch zu einer Positionierung des Controllings in Organisationen beitragen können.
    Date: 2015
  17. By: Martin ZUMPE
    Abstract: Over the past fifteen years, the “New Keynesian Model” has occupied a central place in macro-monetary economics. Michael Woodford’s “Interest and Prices” (2003) provides the smartest and most general presentation of this model. However, due to its non-linear and somehow fragmented structure, comprehension of this work may be challenging for readers. Sketchiness of analytical resolutions is another obstacle to full understanding. In order to cope with these difficulties, this paper suggests a unified, exhaustive and detailed derivation of Woodford’s basic model. Beyond a mere re-examination of Woodford’s analytical work, the paper investigates the functioning of the model and brings to light its implicit assumptions. It also shows the absence of national savings in the model, and provides an unpublished formal expression of the transmission mechanism of monetary policy.
    Keywords: new Keynesian model – dynamic stochastic equilibrium modelling – rational expectations – monetary policy
    JEL: E12 E32 D84 E52
    Date: 2015

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