nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2020‒08‒31
seven papers chosen by
Erik Thomson
University of Manitoba

  1. Savage's response to Allais as Broomean reasoning By Franz Dietrich; Antonios Staras; Robert Sugden
  2. Notes on the Main Analytical Insufficiencies of the Marxist Theoretical Tradition for the Comprehension of the Contemporary Global Economy By Vlados, Charis
  3. The Conception of Innovation on the Central Theoretical Hubs of Economic Thought By Vlados, Charis
  4. Toxic famine research and how it suppresses its critics By Bowbrick, Peter
  5. From Political Economy to Economics: How Statistics, Graphs, and the State Forged Twentieth Century Economics By Ricardo Alejandro Peña Pinzón
  6. The ‘Welfare Loss from Monopoly’ Re-visited By Richard Carson
  7. The Rational Group By Franz Dietrich

  1. By: Franz Dietrich (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics, CNRS - Centre National de la Recherche Scientifique); Antonios Staras (Cardiff University); Robert Sugden (UEA - University of East Anglia [Norwich])
    Abstract: Leonard Savage famously contravened his own theory when first confronting the Allais Paradox, but then convinced himself that the had made an error. We examine the formal structure of Savage's ‘error-correcting' reasoning in the light of (i) behavioural economists' claims to identify the latent preferences of individuals who violate conventional rationality requirements and (ii) John Broome's critique of arguments which presuppose that rationality requirements can be achieved through reasoning. We argue that Savage's reasoning is not vulnerable to Broome's critique, but does not provide support for the view that behavioural scientists can identify and counteract errors in people's choices.
    Keywords: Savage,Allais Paradox,Broome,rationality,reasoning,behavioural economics
    Date: 2020–05
  2. By: Vlados, Charis (Democritus University of Thrace, Department of Economics)
    Abstract: This article aims to analyze how the Marxist and neomarxist approaches demonstrate a relative difficulty in understanding and interpreting the dynamics of the modern world economy (globalization). We attempt in particular to explore the interpretive capabilities and shortcomings in the approach of globalization that stem from Marx’s thought and his followers. We present, in particular, the theoretical contribution of Marx in the study of the internationalized capitalism of his era, the interpretation by Lenin based on the concept of imperialism, the subsequent developments and adjustments in the Marxist analysis of the internationalized developmental phenomenon, as well as some contemporary interpretations that link Marxism and neomarxism with globalization.
    Keywords: Marxism; Neomarxism; Marxist adjustments; Marxism and globalization; Criticism on Marxism
    JEL: B14 B24 B51
    Date: 2019–10–12
  3. By: Vlados, Charis (Democritus University of Thrace, Department of Economics)
    Abstract: Innovation seems to be one of the most critical concepts in economics discourse nowadays. However, the contribution of some of the central theoretical hubs to economic science concerning innovation is not always exploited systematically. Therefore, this article aims to present and analyze how some of the most prominent economists in the course of history have approached the issue, as well as to attempt to synthesize this knowledge. In particular, we examine the theoretical contributions of Adam Smith, Karl Marx, and Joseph Schumpeter, as well as some relatively recent theoretical approaches to innovation that appear to draw on the work of these theorists. The central conclusion of this study is that the conceptualization of innovation, either explicitly or implicitly, has deep theoretical roots while, in particular, the finding of the dynamic nature of the phenomenon of innovation seems to have been approached by most of the critical hubs of economic analysis.
    Keywords: Innovation; Economic science; Adam Smith; Karl Marx; Joseph Schumpeter; Socioeconomic development; Socioeconomic dynamics
    JEL: B15 B52 O39
    Date: 2019–11–29
  4. By: Bowbrick, Peter
    Abstract: Bad economic theory can cause famines or stop governments from taking appropriate action to prevent famines. This can kill millions. Amartya Sen’s theory of the cause of the Bengal Famine, which is the inspiration for his ‘entitlement approach’, has been refuted again and again, in different ways, by economists of different theoretical persuasions and by statisticians expert in this area. Sen has been shown to systematically misrepresent the evidence, to make repeated, elementary, theoretical mistakes, and to use and misuse ‘meaningless’ statistics. No attempt has been made by anyone to challenge these refutations: they are incontrovertible. Sen has not retracted his theory, or any of it, which implies fraud. Yet Sen’s work is widely believed and used in famine situations. His ‘entitlement approach’, based largely on his theory of the Bengal famine, is the basis of a research programme. This paper examines how the research programme suppressed the criticisms, ignoring the normal requirements of academic and professional research and integrity. It also produced new falsehoods.
    Keywords: Famine,refutation,fabrication, false evidence, false statistics, Bengal famine, suppressing,
    JEL: H56 H84 N5 O12 Q11 Q13 Q18
    Date: 2020–07–21
  5. By: Ricardo Alejandro Peña Pinzón
    Abstract: The purpose of this essay is to present not only the entrance but also the effect Statistics had upon the consolidation of Economics and its further influence in state intervention. The traditional method of Political Economy in the late nineteenth century disregarded Statistics as a valid approach to acquire economic knowledge. This paradigm was changed, amongst others, by the American Wesley C. Mitchell and the Englishman William Stanley Jevons, who used graphs and statistics as part of the “economic toolset” for research for causal relationships. Furthermore, Statistics only entered state intervention and planning after mayor crises (the World Wars and the Great Depression) forced states to play an active role in the economy. This essay will focus on the experience of the United States and the United Kingdom on these matters. *** El objetivo de este texto es exponer cómo la estadística entró en la ciencia económica y el impacto que tuvo en la consolidación de esta disciplina. Además, se muestra la influencia que tuvo la estadística en la intervención y planeación estatal. El método tradicional de la economía política al final del siglo diecinueve negaba la utilidad de la estadística como mecanismo de obtención de conocimiento económico. Este paradigma fue refutado, entre otros economistas, por el estadounidense Wesley C. Mitchell y el inglés William Stanley Jevons, quienes usaron gráficas y estadísticas como parte del “arsenal económico” para darse a la búsqueda de relaciones causales. En cuanto a la entrada de la estadística en la planeación e intervención estatal, fue necesario que los Estados tomaran un papel activo en la economía a raíz de crisis profundas como las dos guerras mundiales y la gran depresión. Este texto se enfocará en la experiencia de Estados Unidos y el Reino Unido.
    Keywords: Statistics, Wesley C. Mitchell, William Stanley Jevons, state intervention
    JEL: B22 B23 B41 N01
    Date: 2020–08–07
  6. By: Richard Carson (Department of Economics, Carleton University)
    Abstract: In the 1950s, economists claimed that the ‘welfare loss from monopoly’ was well below 1% of GNP. This led to the literature on rent seeking that argued for an additional loss equal to all or part of the economic profit. Here I identify a third loss in the form of suppression of innovation and entrepreneurship when this leads to a decrease in political support. This decrease results from an increase in political competition and loss of rent on old technology. The third loss may be the highest of all.
    Keywords: Efficiency, Inclusiveness, Political Support, Rent Seeking.
    JEL: D42 O30 P59
    Date: 2020–08
  7. By: Franz Dietrich (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics, CNRS - Centre National de la Recherche Scientifique)
    Abstract: Can a group be a standard rational agent? This would require the group to hold aggregate preferences which maximise expected utility and change only by Bayesian updating. Group rationality is possible, but the only preference aggregation rules which support it (and are minimally Paretian and continuous) are the linear-geometric rules, which combine individual tastes linearly and individual beliefs geometrically.
    Keywords: Bayesian aggregation,preference aggregation under uncertainty,expected utility hypothesis for groups,Bayesian revision,rational group agents,linear versus geneometric opinion pooling
    Date: 2020–06

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