nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2019‒12‒02
fifteen papers chosen by
Erik Thomson
University of Manitoba

  1. Antitrust and Economic History: The Historic Failure of the Chicago School of Antitrust By Mark Glick
  2. Journal of the History of Economic Thought Preprints - Economic Analysis of Education in Post-War America: New insights from Theodore Schultz and John Kenneth Galbraith By CHIRAT, alexandre; , Le Chapelain Charlotte
  3. Monism in modern science: The case of (micro-)economics By Beckenbach, Frank
  4. The Focus of Academic Economics: Before and After the Crisis By Ernest Aigner; Matthias Aistleitner; Florentin Glotzl; Jakob Kapeller
  5. On the Function of Beliefs in Strategic Social Interactions. By Arnaud Wolff
  6. Citation Patterns in Economics and Beyond By Matthias Aistleitner; Jakob Kapeller; Stefan Steinerberger
  8. Divided we stand? Professional consensus and political conflict in academic economics By Beyer, Karl M.; Pühringer, Stephan
  9. A century of economics and engineering at Stanford By Cherrier, Beatrice; Saïdi, Aurélien
  10. Making Identity Count: UK 1960 By Vucetic, Srdjan
  11. Economic experiments and inference By Hirschauer, Norbert; Gruener, Sven; Mußhoff, Oliver; Becker, Claudia
  12. Economics from the Top Down: Does Hierarchy Unify Economic Theory? By Fix, Blair
  13. Léon Walras and Alfred Marshall: Microeconomic Rational Choice or Human and Social Nature? By Richard Arena; Katia Caldari
  14. La théorie économique est-elle encore utile ? By Richard Arena
  15. Publishing and Promotion in Economics: The Tyranny of the Top Five By James J. Heckman; Sidharth Moktan

  1. By: Mark Glick (University of Utah)
    Abstract: This paper presents an historical analysis of the antitrust laws. Its central contention is that the history of antitrust can only be understood in light of U.S. economic history and the succession of dominant economic policy regimes that punctuated that history. The antitrust laws and a subset of other related policies have historically focused on the negative consequences resulting from the rise, expansion, and dominance of big business. Antitrust specifically uses competition as its tool to address these problems. The paper traces the evolution of the emergence, growth and expansion of big business over six economic eras: the Gilded Age, the Progressive Era, the New Deal, the post-World War II Era, the 1970s, and the era of neoliberalism. It considers three policy regimes: laissez-faire during the Gilded Age and the Progressive Era, the New Deal, policy regime from the Depression through the early 1970s, and the neoliberal policy regime that dominates today and includes the Chicago School of antitrust. The principal conclusion of the paper is that the activist antitrust policies associated with the New Deal that existed from the late 1930s to the 1960s resulted in far stronger economic performance than have the policies of the Chicago School that have dominated antitrust policy since the 1980s.
    Keywords: New Brandeis School, Antitrust economics, Antitrust law, Neoliberal Economic Theory, Chicago School Economics, History of Antitrust law
    Date: 2019–04
  2. By: CHIRAT, alexandre; , Le Chapelain Charlotte
    Abstract: Human capital theory has suffered much criticism. The filter theory of education (Arrow 1973), the theory of education as a “signal” (Spence 1973) and the theory of “screening” (Stiglitz 1975), for instance, have seriously challenged it from within mainstream economics, and heavy criticism has also come from other paradigms, with Bailly (2016) recently documenting the critique from the radical school. Within this set of ideas that flourished in the post-WWII period and challenged human capital theory, John Kenneth Galbraith’s analysis of the dynamics of the education process is often neglected. In his original institutionalist and firm-based approach to the evolution of education, Galbraith placed great emphasis on the issue of the requirements of the planning system when he tackled the issue of human capital investment. More surprisingly – since he is unanimously recognized as the “founding father” of the “human capital revolution” – Theodore Schultz himself developed a substantial critique of human capital theory that shares some ground with Galbraith’s. The aim of this contribution is to provide new insights into the history of post-WWII ideas in the field of economics of education by reviewing Schultz’s and Galbraith’s respective analyses of education and highlighting their proximities. Both authors raise doubts regarding the idea that the aggregation of individual choices must be regarded as the relevant generative mechanism of the dynamic of education and the basis of the allocation of education resources. Consequently, both question the equivocal concept of student sovereignty.
    Date: 2019–01–21
  3. By: Beckenbach, Frank
    Abstract: This elaboration starts by deciphering modern science as a social subsystem being loosely coupled to the rest of society (section 2.1). Additionally, the way in which modern (monistic) economics was generated within this subsystem will be sketched (section 2.2). This will be contrasted with the views that this monism would have been eroded in recent times due to imports from other sciences into economics. Conclusions as regards the necessity as well as the mode of pluralism will be drawn from this discussion (section 2.3). Picking up the disputable complexity reductions involved in the dominating (monistic) approach in economics other ways to deal with complexity inherent in the economy will be dealt with in section 3. Here a stepwise exit from the established standard approach in economics is suggested for the microeconomic syllabus consisting in the first step of an introductory pluralistic course and in the second step of a heterodox advanced course. Conclusions and perspectives resulting from such an approach are discussed in the final section.
    Keywords: Monism,science,microconomics,pluralism,neoclassical economics
    JEL: A10 A12 A14 A20 B20 B59 D00
    Date: 2019
  4. By: Ernest Aigner (Vienna University of Economics and Business); Matthias Aistleitner (Johannes Kepler University); Florentin Glotzl (Vienna University of Economics and Business); Jakob Kapeller (Johannes Kepler University)
    Abstract: Has the global financial crisis of 2007ff had a visible impact on the economics profession? To answer this question we employ a bibliometric approach and compare the content and orientation of economic literature before and after the crisis with reference to two different samples: A large-scale sample consisting of more than 440,000 articles published between 1956 and 2016 and a smaller sample of 400 top-cited papers before and after the crisis. Our results suggest that unlike the Great Depression of the 1930s the current financial crisis did not lead to any major theoretical or methodological changes in contemporary economics, although the topic of financial instability received increased attention after the crisis.
    Keywords: crisis, economics profession, economic journals, keyword analysis, paradigmatic development
    JEL: A14 B20 B26 G01 N00 N01
    Date: 2018–05
  5. By: Arnaud Wolff
    Abstract: We review the way beliefs have traditionally been formalized in game-theoretic settings, and argue that this formalization has its limits, especially in the realm of strategic social interactions. Normative game theory, with its emphasis on equilibrium concepts and its concern about how rational and intelligent players should play, has left little room for a formal characterization of the role of players’ beliefs. Given that beliefs determine play, we argue that a case can be made for a deeper understanding of their nature. We draw on the literature in evolutionary psychology and biology to decipher underlying, not readily apparent, incentives that might influence belief adoption. In fact, we take the view that beliefs are themselves subject to incentives, and that agents’ beliefs may therefore take on a predictable form if we are able to decipher the underlying incentives that they face. This predictable form might then be used to justify specific modelling assumptions, and accordingly improve the models’ predictive power.
    Keywords: Beliefs, Game Theory, Social Incentives, Evolution, Coordination.
    JEL: B40 C70
    Date: 2019
  6. By: Matthias Aistleitner (Johannes Kepler University); Jakob Kapeller (Johannes Kepler University); Stefan Steinerberger (Yale University, Department of Mathematics)
    Abstract: In this paper we comparatively explore three claims concerning the disciplinary character of economics by means of citation analysis. The three claims under study are: (1) economics exhibits strong forms of institutional stratification and, as a byproduct, a rather pronounced internal hierarchy, (2) economists strongly conform to institutional incentives and (3) modern mainstream economics is a largely self-referential intellectual project mostly inaccessible to disciplinary or paradigmatic outsiders. The validity of these claims is assessed by means of an interdisciplinary comparison of citation patterns aiming to identify peculiar characteristics of economic discourse. In doing so, we emphasize that citation data can always be interpreted in different ways, thereby focusing on the contrast between a `cognitive` and an `evaluative` approach towards citation data.
    Keywords: citation patterns, economics, interdisciplinary, scientometrics, sociology of economics
    JEL: A10 A12 A14
    Date: 2018–11
  7. By: de Carvalho, Andre Roncaglia
    Abstract: The paper analyzes the rise of the Latin American-based inertial inflation theory. Starting in the 1950s, various traditions in economics purported to explain the concept of “inflation inertia”. Contributions ranging from Celso Furtado and M.H. Simonsen to James Tobin anticipated key aspects of what later became the inertial inflation hypothesis, building it into either mathematical or conceptual frameworks compatible with the then contemporaneous macroeconomic theory. In doing so, they bridged the analytical gap with the North-American developments whilst maintaining the key features of the CEPAL approach, such as distributional conflicts and local institutional details. These contributions eventually influenced the second moment of the monetarist-structuralist controversy that unraveled in the 1980s. The paper also highlights how later works by structuralist economists gradually stripped the inertial inflation approach of its previous substance and form, thereby unearthing tensions among Latin-American structuralists that led to the eventual decline of this research program.
    Date: 2019–01–28
  8. By: Beyer, Karl M.; Pühringer, Stephan
    Abstract: In this paper we address the issue of the role of ideology and political preferences of publically engaged economists and contribute to the debate on consensus in economics. To do so, we conduct a social network analysis on the signatories of economist petitions, which we identify as one channel for economists to exert public influence. We base our analysis on 77 public policy petitions and presidential anti-/endorsement letters from 2008-2017 in the United States with more than 6,400 signatories and check the robustness of our results with six sub-networks. Our contribution is twofold: On the one hand we provide an extended empirical basis for the debate on consensus in economics and the role of politics and ideology in economics. On the other hand we provide a viable tool to trace the ideological leaning of (prospective) economist petitions and economists based on the social structure of petition networks.
    Keywords: social network analysis,sociology of economics,consensus,public economists,economist petitions,United States
    JEL: A11 A13 A14 B20 B30 D04 E66 G18 I38 P16
    Date: 2019
  9. By: Cherrier, Beatrice; Saïdi, Aurélien
    Abstract: This paper document the disciplinary exchanges between economists and engineers at Stanford throughout the 20th century. We also elucidate how this cross-fertlization was mediated by the institutional structure of the university. We outline the role of key scholars such as Kenneth Arrow and Robert Wilson, as well as engineers turned administrators like Frederick Terman. We show that engineers largely drew upon successive economic theories of decision and allocation with a view to improving practical industrial management decisions. Reciprocally, economists found in engineering the tools (from linear programming to optimal control theory) they needed to rethink production and growth theory, an epistemology of “application” that emphasized awareness to institutional details, trials and errors and experiments to improve the design of processes and machines, and all sorts of industrial settings to operationalize their theories of decision, strategic interaction and bargaining. By the 2000s, they had turned into economic engineers designing markets and other allocation mechanisms. These cross-disciplinary exchanges were mediated by Stanford’s own institutional culture, notably its use of joint appointments, the development of multidisciplinary “programs” for students, the ability to attract a variety of visitors every year, the entrepreneurial and contract-oriented vision of its administrators, and the close ties with the industrial milieu that came to be called the Silicon Valley.
    Date: 2019–04–19
  10. By: Vucetic, Srdjan
    Abstract: The dominant discourse of British national identity in that year, which I label “Modern Britain”, acknowledged modernity’s material basis, the importance of wealth creation through technological innovation, industrial production and exports, the power of patriarchy, and the need for order, freedom, justice and fairness. Beyond this discourse, there was also a mass-based discourse—I label it “Socialism” to signal continuity with my topography of Britishness in 1950—that criticized Britain for its inherent elitism and excessive respect for inherited wealth. Part of Ted Hopf, Bentley Allan, and Srdjan Vucetic, Eds. Making Identity Count Project. Coding examples: m/2019/03/mic-uk-1960-coding.xlsx
    Date: 2019–05–15
  11. By: Hirschauer, Norbert; Gruener, Sven; Mußhoff, Oliver; Becker, Claudia
    Abstract: Replication crisis and debates about p-values have raised doubts about what we can statistically infer from research findings, both in experimental and observational studies. The goal of this paper is to provide an adequate differentiation of experimental studies that enables researchers to better understand which inferences can and – perhaps more important – cannot be made from particular designs.
    Date: 2019–01–30
  12. By: Fix, Blair (York University)
    Abstract: What is the unit of analysis in economics? The prevailing orthodoxy in mainstream economic theory is that the individual is the ‘ultimate’ unit of analysis. The implicit goal of mainstream economics is to root macro-level social structure in the micro-level actions of individuals. But there is a simple problem with this approach: our knowledge of human behavior is hopelessly inadequate for the task at hand. Faced with real-world complexities, economists are forced to make bold (and seldom tested) assumptions about human behavior in order to make models tractable. The result is theory that has little to do with the real world. This dissertation investigates an alternative approach to economics that I call ‘economics from the top down’. This approach begins with the following question: what happens when we take the analytical focus off of individuals and put it into social hierarchy? The effect of this analytical shift is that we are forced to deal with the realities of concentrated power. The focus on hierarchy leads to some surprising discoveries. First, I find evidence that hierarchical organization has a biophysical basis. I show that institution size (firms and governments) is strongly correlated with rates of energy consumption, and that the growth of institutions can be interpreted as the growth of social hierarchy. Second, I find that hierarchy plays an important role in shaping income and income distribution. I find that income scales strongly with hierarchical power (defined as the number of subordinates under one’s control), and that hierarchical power affects income more strongly than any other factor measured. Lastly, using an empirically informed model of the hierarchical structure of US firms, I find that hierarchy plays a dominant role in shaping the income distribution tail. These results hint that hierarchy can be used to unify the study of economic growth (understood in biophysical terms) and income distribution. I conclude by making the first prediction of how the concentration of hierarchical power should relate to the growth of energy consumption. This prediction sheds new light on the origin of inequality. While this ‘top down’ approach to economics is in its infancy, the results are encouraging. Focusing on hierarchy gives fresh insight into many of the important questions facing society — insight that cannot be obtained by focusing on individuals.
    Date: 2018–09–16
  13. By: Richard Arena (Université Côte d'Azur, France; GREDEG CNRS); Katia Caldari (University of Padova, Italy)
    Date: 2019–11
  14. By: Richard Arena (Université Côte d'Azur, France; GREDEG CNRS)
    Date: 2019–11
  15. By: James J. Heckman (University of Chicago); Sidharth Moktan (University of Chicago)
    Abstract: This paper examines the relationship between placement of publications in Top Five (T5) journals and receipt of tenure in academic economics departments. Analyzing the job histories of tenure-track economists hired by the top 35 U.S. economics departments, we find that T5 publications have a powerful influence on tenure decisions and rates of transition to tenure. A survey of the perceptions of young economists supports the formal statistical analysis. Pursuit of T5 publications has become the obsession of the next generation of economists. However, the T5 screen is far from reliable. A substantial share of influential publications appears in non-T5 outlets. Reliance on the T5 to screen talent incentivizes careerism over creativity.
    Keywords: tenure and promotion practices, career concerns, economics publishing, citations
    JEL: A14 I23 J44 O31
    Date: 2018–09

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