nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2017‒07‒30
nine papers chosen by
Erik Thomson
University of Manitoba

  1. Paternalism and the public household. On the domestic origins of public economics By Maxime Desmarais-Tremblay
  2. What Remains of Milton Friedman's Monetarism? By Hetzel, Robert L.
  3. What View of Science Discovery Best Fits the Science Learning Game? By Richard S. Prawat; Theodore R. Prawat
  4. Croissance potentielle : la politique économique au royaume des aveugles ? By Jacques LE CACHEUX
  6. Viability and arbitrage under Knightian Uncertainty By Burzoni, M.; Riedel, Frank; Soner, H.M.
  7. Towards a Political Theory of the Firm By Zingales, Luigi
  8. Self-interest and Equity Concerns: A Behavioural Allocation Rule for Operational Problems By Osório, António (António Miguel)
  9. Economisch inzicht in menselijke drijfveren By van Damme, Eric

  1. By: Maxime Desmarais-Tremblay (Centre Walras-Pareto - Université de Lausanne, CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The ancient Greek conception of oikonomia is often dismissed as irrelevant for making sense of the contemporary economic world. In this paper, I emphasise a tread that runs through the history of economic thought connecting the oikos to modern public economics. By conceptualising the public economy as a public household, Richard A. Musgrave (1910-2007) set foot in a long tradition of analogy between the practically oriented household and the state. Despite continuous references to the domestic model by major economists throughout the centuries, the analogy has clashed with liberal values associated with the public sphere since the eighteenth century. Musgrave's conceptualization of public expenditures represents one episode of this continuing tension. His defence of merit goods, in particular, was rejected by many American economists in the 1960s because it was perceived as a paternalistic intervention by the state. I suggest that the accusation of paternalism should not come as a surprise once the ‘domestic’ elements in Musgrave's conceptualisation of the public sector are highlighted. I develop three points of the analogy in Musgrave's public household (the communal basis, a central direction, and consumption to satisfy needs) which echo recurring patterns of thought about the state.
    Abstract: On admet souvent que la définition originale de l'économie - oikonomia : les lois de la gestion domestique - n'est pas pertinente pour le monde économique moderne. Dans cet article, je tisse un fil dans l'histoire de la pensée économique qui connecte l'oikos à l'économie publique moderne. En conceptualisant l'économie publique comme un ménage (household), Richard A. Musgrave (1910-2007) s'inscrit, en partie sans le savoir, dans une longue tradition d'analogie entre le ménage et l'État. Malgré les références continuelles au modèle domestique par des économistes et des penseurs politiques à travers les siècles, l'analogie se heurte aux valeurs libérales associées à la sphère publique depuis le XVIIe siècle. La théorisation des dépenses publiques de Musgrave représente un épisode de cette tension continuelle. C'est le cas en particulier de son concept de besoin méritoire (besoin sous tutelle) qui a été rejeté par plusieurs économistes américains dans les années 1960, parce qu'il légitimait des interventions paternalistes de l'État. Or, l'accusation de paternalisme n'est guère surprenante lorsqu'on met au jour les éléments ‘domestiques’ de la conceptualisation musgravienne du secteur public. Je développe trois points de l'analogie présents dans la conceptualisation du ménage public de Musgrave (la base communautaire, une direction centrale, la consommation pour satisfaire des besoins) qui font écho à des modes de conceptualisation de l'État récurrents dans la pensée politique et économique occidentale.
    Keywords: public household,paternalism,liberalism,merit wants,merit goods,ménage public,paternalisme,besoins méritoires,biens méritoites,Richard A. Musgrave
    Date: 2017–06
  2. By: Hetzel, Robert L. (Federal Reserve Bank of Richmond)
    Abstract: From the early 1960s until the early 1970s with the emergence of rational expectations, under the rubric of monetarism, Milton Friedman defined macroeconomic debate. Although the Keynesian consensus that he challenged has disappeared, the current academic literature makes little reference to monetarist ideas. What happened to them? The argument here is that those ideas remain relevant but require translation into terms expressible in modern macroeconomic models and in the monetary policies of central banks, neither of which contain any obvious references to money. Moreover, the Friedman and Schwartz methodology for identifying shocks retains relevance.
    Keywords: monetary policy; Milton Friedman
    JEL: B22
    Date: 2017–07–21
  3. By: Richard S. Prawat (Michigan State University); Theodore R. Prawat (Thomas College)
    Abstract: This paper presents a view of science discovery that has the potential to change the way we construct learning games in science. This view is based on the work of a nineteenth century philosopher and scientist whose work, supported by a new generation of historians of science, counters the traditional view of scientific discovery as induction--the notion that new ideas are built from the bottom up so to speak, from particular experience to general concept. The alternative to this view is one that insists that scientific discovery is an ?ideas first? leap of creative understanding termed ?abduction.? It proceeds as follows: (1) A surprising fact, C, presents itself to an individual; (2) a big idea (H) is then suggested that, if true, would render C a matter of course; (3) this then leads the individual to conclude that there is reason to believe that H is true. This view of knowledge, we will argue, complements efforts to bolster the educative aspect of a game in a way that contributes to, rather than detracts from, the all important immersive aspect of that same game.
    Keywords: games, science, technology, curriculum
    JEL: I29
    Date: 2017–05
  4. By: Jacques LE CACHEUX
    Abstract: La crise a révélé les insuffisances graves de la théorie macroéconomique dominante et des conceptions de politique macroéconomique qu’elle inspire. Le cadre analytique dans lequel raisonnent la plupart des macroéconomistes, celui qui guide les institutions nationales, européennes et internationales dans leurs orientations, est intrinsèquement inapte à rendre compte des évolutions structurelles d’une économie financiarisée et en profonde mutation. Les concepts-clés qui en sont les fondements induisent des choix d’indicateurs fournissant des signaux erronés. Les grandeurs macroéconomiques standards sur lesquelles se fondent les politiques économiques se sont vidées de leur sens, mais constituent néanmoins toujours les piliers des diagnostics. Refonder la macroéconomie est une urgence ; mais les ébauches actuellement offertes ne sont pas à la hauteur des défis. POTENTIAL GROWTH: ECONOMIC POLICY IN THE KINGDOM OF THE BLIND The 2009 crisis has shed a crude light on the deep shortcomings of standard macroeconomic theory and of its representation of the workings of macroeconomic policy. The analytical framework in which most macroeconomists reason, the one that guides national, European, and international institutions’ orientations, is intrinsically unable to deliver insights on the structural evolutions of economies that are massively intertwined with finance and in perpetual technological change. The key concepts on which this framework is built lead to the choice of indicators that generate misleading signals. Standard macroeconomic aggregates guiding economic policies have been losing their meaning, but continue to be relied upon when forming a diagnosis on national economies. Rebuilding macroeconomic theory on new foundations is urgent; but the avenues that are being explored currently are far from providing adequate answers.
    JEL: E00 E01 E60
    Date: 2017–06
  5. By: Murat Cem Demir (Munzur Universty)
    Abstract: There are many sociologists and philosophers following Ibn Khaldun's philosophy and thought. But the contemporary representatives of Khaldun's history and philosophy of society have not examined climate, technology, history, politics and social problems, taking into account the recent momentum of the contemporary world.This study examines Fukuyama and Wallerstein's philosophy of politics, history and society, the perception of the technology of Kompridis, the representations of Asaf Bayat's subaltern and subaltern in the contemporary world, and finally, ta Chakrabarty's view of climate issues; aims to argue with khaldun's views. While khaldun has a relatively optimistic sense of modernization, most of the representatives we have listed above have a pessimistic perception. When Fukuyama refers to the end of history, Khaldun refers to a continuous cycle, while Kompridis speaks of the destruction of technology, Khaldun emphasizes the importance of technology. Subaltern finds himself in the rural-urban contrast in the best way, and Bayat's case is quite different from Khaldun. Chakrabarty speaks about the influence of man over the climate, while Khaldun speaks about the influence of climate and geography on human behavior. Khaldun's philosophical optimism dominates his perception of history, society and politics. While emphasizing the temporaryity of social problems in the period he lived, the thinkers we cited emphasize the permanence.
    Keywords: Ibn Khaldun, philosophy, politics, history and society
    Date: 2017–05
  6. By: Burzoni, M. (Center for Mathematical Economics, Bielefeld University); Riedel, Frank (Center for Mathematical Economics, Bielefeld University); Soner, H.M. (Center for Mathematical Economics, Bielefeld University)
    Abstract: We reconsider the microeconomic foundations of financial economics under Knightian Uncertainty. In a general framework, we discuss the absence of arbitrage, its relation to economic viability, and the existence of suitable nonlinear pricing ex- pectations. Classical financial markets under risk and no ambiguity are contained as special cases, including various forms of the Efficient Market Hypothesis. For Knightian uncertainty, our approach unifies recent versions of the Fundamental Theorem of Asset Pricing under a common framework.
    Keywords: Robust Finance, No Arbitrage, Viability, Knightian Uncertainty
    Date: 2017–07–24
  7. By: Zingales, Luigi
    Abstract: Neoclassical theory assumes that firms have no power of fiat any different from ordinary market contracting, thus a fortiori no power to influence the rules of the game. In the real world, firms have such power. I argue that the more firms have market power, the more they have both the ability and the need to gain political power. Thus, market concentration can easily lead to a “Medici vicious circle, where money is used to get political power and political power is used to make money.
    Keywords: Concentration; Lobbying; Theory of the firm
    JEL: D21 G30 L20
    Date: 2017–07
  8. By: Osório, António (António Miguel)
    Abstract: In many economic situations, individuals with different bargaining power must agree on how to divide a given resource. For instance, in the dictator game the proposer has all the bargaining power. In spite of it, the majority of controlled experiments show that she shares an important amount of the resource with the receiver. In the present paper I consider how behavioural and psychological internal conflicting aspects, such as self-interest and equity concerns, determine the split of the resource. The individual allocation proposals are aggregated in terms of altruism and value for the resource under dispute to obtain a single allocation. The resulting allocation rule is generalized to the n-individuals case through eficiency and consistency. Finally, I show that it satisfies a set of desirable properties. The obtained results are of practical interest for a number of situations, such as river sharing problems, sequential allocation and rationing problems. Keywords: Behavioural operational research; Sharing rules; Altruism; Equity concerns; Self-interest. JEL classification: C91, D03, D63, D74.
    Keywords: Microeconomia, 33 - Economia,
    Date: 2017
  9. By: van Damme, Eric (Tilburg University, School of Economics and Management)
    Date: 2016

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