nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2019‒01‒07
thirteen papers chosen by
Erik Thomson
University of Manitoba

  1. Book review: cents and sensibility: what economics can learn from the humanities By Bronk, Richard
  2. Antoine Augustin Cournot: The Pioneer of Modern Economic Ideas By Hossain, Md. Mobarak; Chowdhury, Md Niaz Murshed
  3. The Saint-Simonians and the birth of social justice in France By Adrien Lutz
  4. On commercial gluts, or when the Saint-Simonians adopted Jean-Baptiste Say’s view By Adrien Lutz
  5. The capacity to confuse: rescuing the Saint-Simonian notion of ability from modern capability theories of social justice By Antoinette Baujard; Adrien Lutz
  6. Ricœur, Rawls and the Aporia of the Just By Feriel Kandil
  7. Michael Polanyi's economics: a strange rapprochement By Agnès Festré
  8. Hayek on expectations: The interplay between two complex systems By Agnès Festré
  9. The Race Between Demand and Supply: Tinbergen's Pioneering Studies of Earnings Inequality By James J. Heckman
  10. Economics: A Science of Meaning By Ferlito, Carmelo
  11. The Last will be First, and the First Last: Segregation in Societies with Positional Externalities By Herings, P. Jean-Jacques; Saulle, Riccardo; Seel, Christian
  12. Identity, Beliefs, and Political Conflict By Gennaioli, Nicola; Tabellini, Guido
  13. Pemikiran Ekonomi Islam Abu Ubaid (154-224 H): Fungsi Uang dan Relevansinya Saat Ini By Arief, Nugroho

  1. By: Bronk, Richard
    Abstract: Gary Saul Morson and Morton Schapiro trace the connection between Adam Smith's great classic, The Wealth of Nations, and his less celebrated book on The Theory of Moral Sentiments, and contend that a few decades later Jane Austen invented her groundbreaking method of novelistic narration in order to give life to the empathy that Smith believed essential to humanity. Cents and Sensibility demonstrates the benefits of a freewheeling dialogue between economics and the humanities by addressing a wide range of problems drawn from the economics of higher education, the economics of the family, and the development of poor nations.
    JEL: J1
    Date: 2017–12–05
  2. By: Hossain, Md. Mobarak; Chowdhury, Md Niaz Murshed
    Abstract: Augustin Cournot, an unsung pioneer of many economic ideas during his time, who has written the book, Theory of Wealth, where he developed many economic ideas including the oligopoly theory, doupoly model, the ideas of function and probability into economic analysis. This paper discusses the way he thought the economics should be analyzed as well as his life cycle.
    Keywords: Doupoly, oligopoly, game theory
    JEL: B30 B31
    Date: 2018–12–24
  3. By: Adrien Lutz (Univ Lyon, UJM Saint-Etienne, GATE UMR 5824, F-42023 Saint- Etienne, France)
    Abstract: This paper concerns the birth of the idea of social justice, which in France dates to the 19th century. It argues that the idea of social justice was able to emerge in France due to particular conditions, which were met for the first time by the Saint-Simonians. We first shed light on the transition in France from a commercial system to one marked by increasing industrialization, which raised new questions regarding economic justice and the composition of ownership. The Saint-Simonians were among the first to criticize this new composition, and to seek a means to organize society on a fair basis. We then explain how the Saint-Simonians came to theorize this new organization: according to them, the value of things lies in work. The difference from the classical framework, which is also utilitarian, is that they posit an opposition between workers and idlers: each and every individual must be useful to society. Finally, we analyse how the Saint-Simonians identify this opposition as existing throughout history, on which basis they not only justify their innovative views on social justice, but legitimize their project as a whole.
    Keywords: Saint-Simonianism, Social justice, Ability, Industrialism
    JEL: B10 D63 N00
    Date: 2018
  4. By: Adrien Lutz (Univ Lyon, UJM Saint-Etienne, GATE UMR 5824, F-42023 Saint- Etienne, France)
    Abstract: A standard reading in the history of economic thought sets the classical stream of economists drawing upon the influence of Adam Smith (Jean-Baptiste Say, David Ricardo, etc.) in opposition to a “black box” of social thinkers (Louis Blanc, Fourierism, Saint-Simonianism, Sismondi, Robert Owen). This article, however, argues that, in the first quarter of the 19th century, the Saint-Simonians and the liberal economist Jean-Baptiste Say can be seen to adopt convergent views during the famous controversy about commercial gluts. First, we show that the Saint-Simonians and Say both see undersupply and lack of industry as causes of gluts. Next, we assert that their intellectual affinities are also visible in their belief that increasing production remains an appropriate solution for gluts. Finally, this convergence is explained by their common belief in industrialism: Saint-Simonianism is embedded in a French industrialist tradition for which Say can be taken as representative. We argue that their common belief in industry explains their convergence.
    Keywords: Saint-Simonianism, Jean-Baptiste Say, Adam Smith, Laissez-faire, Commercial gluts
    JEL: B10 E5 N00
    Date: 2018
  5. By: Antoinette Baujard (Univ Lyon, UJM Saint-Etienne, GATE UMR 5824, F-42023 Saint- Etienne, France); Adrien Lutz (Univ Lyon, UJM Saint-Etienne, GATE UMR 5824, F-42023 Saint- Etienne, France)
    Abstract: “To each according to his ability, to each ability according to his works” constitutes the founding slogan of the Saint-Simonian doctrine (1825–1832). A century and a half would pass before Sen and Nussbaum developed their capability approaches, designed to consider issues of human development and quality of life. Given the prominence of capability approaches in the context of modern theories of justice, and perhaps also due to the natural analogy between the words ‘capacité’, ‘ability’, and ‘capability’, there is a clear tendency in the literature to analyse the Saint-Simonians’ contributions to justice based on the assumption that there is a conceptual link between the terms capability and ability. This paper claims, however, that the elision of these terms is unjustified, and is a source more of confusion than of enlightenment. A capability is an evaluative space for justice, while an ability is a property of individuals. The former is defined essentially in the domain of consumption and individual accomplishment, while the latter is clearly seen as a contribution to the theory of efficient production. Finally, these differences reveal a contrast in the focus values: the ability approach insists on efficiency, while the capability approach focuses on agency.
    Keywords: Social justice, Capability, Ability, Sen, Saint-Simonianism
    JEL: B10 D63
    Date: 2018
  6. By: Feriel Kandil (Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE)
    Abstract: The article conducts a comparative study between Ricœur’s and Rawls’ thought on justice. Whereas Ricoeur focuses on the dialectic between the just and the good, Rawls is concerned with the ideal conditions under which a universal consensus on the principles of justice may be reached. Ricœur gives much importance to reading Rawls. He offers many commentaries, especially on Rawls’s major contribution, A Theory of Justice. This chapter focuses on such comments and on the relating paradoxical interpretation of Rawls’s approach to justice Ricœur provides. First, this chapter suggests that, with his interpretation of Rawls’s major contribution, Ricœur contributes to put the light on the conflicts between the just and the good. These conflicts are the key elements of what may be referred to as the aporia of the just, which consists in the contradictory requirements coming from the just considered as a virtue of either institutions or individuals. Second, this chapter shows that whereas the aporia is a major problem in Rawls’ approach to justice, it is at the core of the dialectic dynamic Ricœur sees within moral life. In his work, the aporia leads to what we call the three paradoxes of justice, which are the paradoxes with legal, distributive and political justice. Considering such paradoxes, Ricœur takes the ethics of practical wisdom as a necessary recourse. The latter provides fair decision makers with the resources needed for the aporia to be, if not resolved, at least eased.
    Keywords: social justice, distributive justice, legal justice, political justice, the just, the good, principles of justice, Kant, Aristotle, Ricœur, Rawls, political paradox, sense of justice
    Date: 2018–11
  7. By: Agnès Festré (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur - CNRS - Centre National de la Recherche Scientifique)
    Date: 2018–11–22
  8. By: Agnès Festré (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - UCA - Université Côte d'Azur - CNRS - Centre National de la Recherche Scientifique)
    Date: 2018–11–22
  9. By: James J. Heckman
    Abstract: Understanding inequality and devising policies to alleviate it was a central focus of Jan Tinbergen's lifetime research. He was far ahead of his time in many aspects of his work. This essay places his work in the perspective of research on inequality in his time and now, focusing on his studies on the pricing of skills and the evolution of skill prices. In his most fundamental contribution, Tinbergen developed the modern framework for hedonic models as part of his agenda for integrating demand and supply for skills to study determination of earnings and its distribution and the design of effective policy. His lifetime emphasis on social planning caused some economists to ignore his fundamental work.
    JEL: B31 D31 D33 D63 I24 J20 P21
    Date: 2018–12
  10. By: Ferlito, Carmelo
    Abstract: In this paper I will define economics following a different general approach to economic problems, an approach that, because of its emphasis on meaning, has been called ‘radical subjectivism’ (Storr, 2017). In the light of this approach, it is possible to develop a general theory for the economic system, with the possibility of globally responding to economic questions within a broad paradigm. Moreover, such a paradigm has to incorporate two fundamental elements disregarded by mainstream economics: real people and real time.
    Keywords: Economics,Meaning,Real Time
    JEL: A11
    Date: 2018
  11. By: Herings, P. Jean-Jacques (General Economics 1 (Micro)); Saulle, Riccardo (General Economics 1 (Micro)); Seel, Christian (General Economics 1 (Micro))
    Abstract: This paper studies coalition formation among individuals who differ in productivity. The output of a coalition is determined by the sum of productivities if the coalition exceeds a minimal threshold of members. We consider competitive societies in which the surplus of a coalition is split according to productivity and egalitarian societies in which coalitions split their surplus equally. Preferences of coalition members depend on their material payoffs, but are also influenced by positional concerns, which relate their material payoffs to the average material payoff in the coalition. Our analysis uses two stability notions, the Core and the Myopic Stable Set. Both competitive and egalitarian societies lead to segregated partition structures. For competitive societies, all stable allocations are based on bottom-up segregation, i.e., individuals with adjacent productivities form coalitions and if some individuals are not part of a productive coalition, then these are the most productive ones. For egalitarian societies, we obtain top-down segregation in all stable allocations. Again it holds that individuals with adjacent productivities form coalitions, but now the least productive individuals may not be part of any productive coalition. If all individuals have different productivity levels, then the material efficiency of competitive societies is below that of egalitarian societies.
    Keywords: group formation, segregation, relative payoff, Egalitarianism, Meritocracy, social environment
    JEL: C70 C71 D62
    Date: 2018–12–17
  12. By: Gennaioli, Nicola; Tabellini, Guido
    Abstract: We present a theory of identity politics that builds on two ideas. First, voters identify with the social group whose interests are closest to theirs and that features the strongest policy conflict with outgroups. Second, identification causes voters to slant their beliefs toward the group's distinctive opinion. The theory yields two main implications: i) voters' beliefs are polarized and distorted along group boundaries; ii) economic shocks that induce new cleavages to emerge also bring about large changes in beliefs and preferences across many policy issues. In particular, exposure to globalization or cultural changes may induce voters to switch identities, dampening their demand for redistribution and exacerbating conflicts in other social dimensions. We show that survey evidence is consistent with these implications.
    Date: 2018–12
  13. By: Arief, Nugroho
    Abstract: This article describes Islamic economic thinking that is specifically related to the function of money according to Islamic economist Abu Ubaid (154-224 H). The rationale of Abu Ubaid listed in the Book of Al-Amwal is emphasizing justice as the main principle. Abu Ubaid views money as having 2 (two) functions, namely as a standard for exchange and media exchange which until now is still acceptable/relevant in the economy.
    Keywords: Islamic Economy, Justice, Money
    JEL: B1
    Date: 2018–12–17

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