nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2021‒10‒18
eight papers chosen by
Erik Thomson
University of Manitoba

  1. Lessons of Keynes’s Economic Consequences in a Turbulent Century By Clavin, P.; Corsetti, G.; Obstfeld, M.; Tooze, A.
  2. When Berle and Galbraith brought political economy back to life : Study of a cross-fertilization (1933-1967) By Alexandre Chirat
  3. The Kuznetsian paradigm for the study of modern economic history and the Great Divergence with appendices of literature review and statistical data By Deng, Kent; O'Brien, Patrick
  4. Entrepreneurial Accessibility, Eudaimonic Well-Being, and Inequality By Boudreaux, Christopher J.; Elert, Niklas; Henrekson, Magnus; Lucas, David S.
  5. Variety Of Possible Selves: The Role Of Agency And Empirical Evidence Review By Milena M. Grishutina; Vasily Yu. Kostenko
  6. Red Giant By Bichler, Shimshon; Nitzan, Jonathan
  7. A social-psychological reconstruction of Amartya Sen's measures of inequality and social welfare By Stark, Oded; Budzinski, Wiktor
  8. Why We All Must Work By Jon D. Wisman

  1. By: Clavin, P.; Corsetti, G.; Obstfeld, M.; Tooze, A.
    Abstract: Just over a century old, John Maynard Keynes’s The Economic Consequences of the Peace (1919) remains a seminal document of the twentieth century. At the time, the book was a prescient analysis of political events to come. In the decades that followed, this still controversial text became an essential ingredient in the unfolding of history. In this essay, we review the arc of experience since 1919 from the perspective of Keynes’s influence and his changing understanding of economics, politics, and geopolitics. We identify how he, his ideas, and this text became key reference points during times of turbulence as actors sought to manage a range of shocks. Near the end of his life, Keynes would play a central role in planning the world economy’s reconstruction after World War II. We argue that the “global order†that evolved since then, marked by increasingly polarized societies, leaves the community of nations ill prepared to provide key global public goods or to counter critical collective threats.
    Keywords: Keynes, World War I, Versailles, interwar period, League of Nations, World War II, Bretton Woods, Cold War, multilateralism, global order
    JEL: B30 E10 E30 F30 F40 N10 N20
    Date: 2021–10–05
  2. By: Alexandre Chirat
    Abstract: This paper provides a reconstruction of the intellectual cross-fertilization between Adolf Berle and John Kenneth Galbraith to account for their institutionalist challenge against “conventional economics” so as to bring political economy back to life. To do so, I go back to the genesis of Modern Corporation and Private Property before analyzing Berle and Galbraith’s answers to a set of fundamentals questions. What is the nature of modern competition ? What is the nature of the modern corporation ? What is the role of the State ? Lastly, how should American liberalism be reinvented to cope with the social issues of an affluent society ? Their answers to these questions reveal the deep affinities between the theoretical and political dimensions of their works, so that this work lies at the crossroads of the history of economic thought and the history of American liberalism in the postwar period.
    Keywords: institutionalism - managerialism - liberalism - political economy.
    JEL: B25 B52 D23 M14
    Date: 2021
  3. By: Deng, Kent; O'Brien, Patrick
    Keywords: Kuznetsian paradigm; GDP; Great Divergence Debate; Eurocentrism; backward extrapolations; margins of error
    JEL: B41 C80 N01 O47
    Date: 2021–01
  4. By: Boudreaux, Christopher J. (Florida Atlantic University, United States); Elert, Niklas (Research Institute of Industrial Economics (IFN)); Henrekson, Magnus (Research Institute of Industrial Economics (IFN)); Lucas, David S. (Syracuse University, United States)
    Abstract: Amidst considerable debate on the relationship between entrepreneurship and economic inequality, scholarship only indirectly addresses how entrepreneurship informs individuals’ relative well-being. We theorize on the nuanced relationship between entrepreneurship and equality of eudaimonic well-being through the lens of New Institutional Economics. Drawing on theories of human flourishing, we suggest that entrepreneurial action is an underappreciated mechanism by which individuals pursue well-being. Equality of well-being is thus influenced by a society’s entrepreneurial accessibility: the freedom of individuals to choose to engage in entrepreneurial action. We present a multilevel framework in which institutional factors enable entrepreneurial action by promoting entrepreneurial accessibility—a factor, that, in turn, affects well-being for individual entrepreneurs as well as societal eudaimonic equality. The ex ante conditions for equality of well-being entail institutions that yield broad entrepreneurial accessibility. Our work highlights the institutional prerequisites for human flourishing in the entrepreneurial society beyond (unequal) economic distributions.
    Keywords: Inequality; Entrepreneurship; Well-being; Institutions; Eudaimonia
    JEL: D31 D63 I30 L26 O43
    Date: 2021–10–13
  5. By: Milena M. Grishutina (National Research University Higher School of Economics); Vasily Yu. Kostenko (National Research University Higher School of Economics)
    Abstract: The development of possible self theory led to the introduction of new types of construct. However, the types are inconsistent with the original definition by Markus and Nurius (1986). Authors tend not to consider the phenomenon of agency, playing a crucial role in the motivational function of possible self. Thus, now in the literature, we have non-systemized concepts of various types of possible self. The article’s primary aim is to analyze existing types of possible selves through the lens of agentic energy, and to unify the construct’s understanding. We consider most frequent types of possible self, such as hoped-for possible self, feared possible self, best possible self, self-regulatory and self-enhancing possible self, lost possible self, shared possible self, and impossible self. Creating the systematic view is essential for the future of the theory as there are already some misconceptions that come from the liberal interpretation of the originally strong construct. We propose a solution in the form of traditional literature review with the result of definitions reconsidered depending on the role of agentic energy in the process of possible self producing. The expected outcome of the framework is to set a unified direction for further discoveries.
    Keywords: possible self, self-concept, agency, impossible self, personality, self-image, self-identity, self-schema, feared self, personality development
    JEL: Z00
    Date: 2021
  6. By: Bichler, Shimshon; Nitzan, Jonathan
    Abstract: In 2012, we published a paper in the Journal of Critical Globalization Studies titled 'Imperialism and Financialism: The Story of a Nexus'. Our topic was the chameleon-like Marxist notion of imperialism and how its different theories related to finance. Here is the article's summary: Over the past century, the nexus of imperialism and financialism has become a major axis of Marxist theory and praxis. Many Marxists consider this nexus to be a prime cause of our worldly ills, but the historical role they ascribe to it has changed dramatically over time. The key change concerns the nature and direction of surplus and liquidity flows. The first incarnation of the nexus, articulated at the turn of the twentieth century, explained the imperialist scramble for colonies to which finance capital could export its excessive surplus. The next version posited a neo-imperial world of monopoly capitalism where the core's surplus is absorbed domestically, sucked into a black hole of military spending and financial intermediation. The third script postulated a World System where surplus is imported from the dependent periphery into the financial core. And the most recent edition explains the hollowing out of the U.S. core, a red giant that has already burned much of its own productive fuel and is now trying to financialize the rest of the world in order to use the system's external liquidity. The paper outlines this chameleon-like transformation, assesses what is left of the nexus and asks whether it is worth keeping. (p. 42) In the second part of the paper, we looked a little closer at the red-giant argument. Specifically, we wanted to gauge the degree to which U.S. capital had declined and examine whether this decline indeed forced the rest of the world to financialize. And what we found surprised us: the 'financial sector' did seem to become more important everywhere, but its rise was led not by the United States, but by the rest of the world! Our article was published almost a decade ago, so we though it would be interesting to update our figures and see what has changed, if anything.
    Keywords: globalization,imperialism,financialization,United States
    JEL: P16 P26 P48 G3 F5 G1
    Date: 2021
  7. By: Stark, Oded; Budzinski, Wiktor
    Abstract: The Gini coefficient features prominently in Amartya Sen's 1973 and 1997 seminal work on income inequality and social welfare. We construct the Gini coefficient from social-psychological building blocks, reformulating it as a ratio between a measure of social stress and aggregate income. We determine when as a consequence of an income gain by an individual, an increase in the social stress measure dominates a concurrent increase in the aggregate income, such that the magnitude of the Gini coefficient increases. By integrating our approach to the construction of the Gini coefficient with Sen's social welfare function, we are able to endow the function with a social-psychological underpinning, showing that this function, too, is a composite of a measure of social stress and aggregate income. We reveal a dual role played by aggregate income as a booster of social welfare in Sen's social welfare function. Quite surprisingly, we find that a marginal increase of income for any individual, regardless of the position of the individual in the hierarchy of incomes, improves welfare as measured by Sen's social welfare function.
    Keywords: Measuring inequality,A social-psychological approach to the construction of the Gini coefficient,Properties of the reconstructed Gini coefficient,Sen's social welfare function,Sen's social welfare function as a composite of a measure of social stress and aggregate income
    JEL: C43 D01 D31 D63 I31 P46
    Date: 2021
  8. By: Jon D. Wisman
    Abstract: Much, if not most work has been debased since the rise of the state 5,500 years ago. Because most workers lack ownership, control, or readily access to productive wealth, they must locate owners willing to provide them with employment, those failing to do so suffer the material, social, and psychological costs of unemployment. Because owners possess control over the work process, workers can be bossed about, often to perform unpleasant and dangerous work. Yet for the first 97 percent of human history – that prior to state societies -- all had equal access to the means of production, providing them with control over their work. Anthropological research reveals that work for pre-state peoples was democratically performed and pleasurable. Biological evolution also predicts that work would have been naturally selected to be pleasurable to better motivate its performance and hence survival. Diligent work served as a source of status and self-respect, enhancing reproductive success by signaling to potential mates a capacity to provision offspring. This article claims that even had the debasement of work been necessary for eventually producing today’s abundance, it no longer is. Two reforms, both preserving capitalism’s two principal institutions of private property and markets, would transform work to provide greater human flourishing: guaranteed employment at living wages with reskilling where necessary, and measures to promote workplace democracy. These reforms would eliminate poverty, reduce inequality, prepare economies for future technological dynamism and globalization, and by better enabling social and self-respect through work and community, would reduce the pressure to do so through consumption, thereby lowering ecological devastation.
    Keywords: Debased work, ideology, human flourishing, guaranteed employment, workplace democracy.
    JEL: B15 I31 P13 Z1
    Date: 2021

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