nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2023‒06‒12
eight papers chosen by
Erik Thomson
University of Manitoba

  1. “Monopolistic” vs. “Cooperative” State in the Institutional and Economic Modelling of Antonio De Viti De Marco By Luca Tedesco; Roberto Ricciuti
  2. Standing on the Shoulders of Giants or Science? – Lessons from Ordoliberalism By Lars P. Feld; Ekkehard A. Köhler
  3. Politics subordinated to (neoliberal) Economics By Vergés-Jaime, Joaquim
  4. Toward an economic theory of populism: Uncertainty, Information, and Public Interest in Downs’s Political Economy By Alexandre Chirat; Cyril Hédoin
  5. American utopias in the 19th century: Religious versus ideological farms in the west of the United States By Antonio Sánchez‐bayón; Estrella Trincado-Aznar; Francisco J Sastre
  6. Inventing Conditionality, Exploring Its Politics (1946-1958) By Jérôme Sgard
  7. Theodore Roosevelt, the Election of 1912, and the Founding of the Federal Reserve By Matthew Jaremski; David C. Wheelock
  8. L'impôt sur l'héritage : actualité d'un vieux débat par François Facchini By François Facchini

  1. By: Luca Tedesco (University Roma Tre); Roberto Ricciuti (Department of Economics (University of Verona))
    Abstract: Antonio de Viti de Marco was one of the most representative figures of the Italian school of public finance and is considered an intellectual father of the Public Choice school. In this paper we analyze the relationships between his theories and those of Herbert Spencer, explicitly cited by de Viti de Marco in his writings. We also explore to what extent the theory fueled the political and journalistic campaigns in which he was engaged, seeking to influence the economic and financial policy of the government. De Viti de Marco and his associates proposed a way out of the fin de siècle crisis based on a new fiscal pact and free trade, which in turn was grounded on a view of the British model that was already in crisis in its homeland. Unsurprisingly, this route was not chosen by the government, which opted for repression.
    Keywords: De Viti de Marco, liberal Italy, public finance, taxation, free trade, protectionism, Italian economic thought.
    JEL: B13 B31 D72 D78 H11
    Date: 2023–05
  2. By: Lars P. Feld; Ekkehard A. Köhler
    Abstract: James Buchanan would have celebrated his 100th birthday in 2019. This serves as an inspiration to look at the future of public choice and the question of how much normativity public choice can bear. In our analysis we draw parallels between public choice and German ordoliberalism (and its source in the Freiburg School of Economics). We argue that the reception of ordoliberalism exemplifies easy-to-grasp pitfalls that should be taken seriously. We anchor the future agenda of public choice in a solid individualist perspective. Similar to ordoliberalism, public choice will have to clarify its relation to normative economics. The effects of rules and institutions and their working properties should be thoroughly analyzed empirically. The role of ideas is important for the normative foundation of both public choice/ constitutional economics and ordoliberalism, and is rooted in normative individualism. It provides a benchmark by which rules and institutions can be judged as favorable.
    Keywords: public choice, methodology, James Buchanan, normativity, individualism
    JEL: B13 B26 B31 D78 E61 E63
    Date: 2023
  3. By: Vergés-Jaime, Joaquim
    Abstract: A wide ideological consequence of the standard model –in (mainstream) Economics– beyond Economics itself is that in the last decades Competition –so understood, with a capital letter– has implicitly become sort of a myth in economic policy and the political arena in general. Competition is, of course, consubstantial to trade; and trade is certainly consubstantial to the division of labour and specialisation, and thereby to economic progress and development. Certainly, it fosters efficiency and improvements in products and services, including innovations that give way to new ones. It is thus a ‘good practice’, an essential means to facilitate the economic development of society. There are, certainly, some exceptions: products or services for which it is not easy, sometimes almost not possible, for citizens, individual buyers, users, or consumers to reasonably have elements, information or knowledge to evaluate the actual utility, convenience, and personal and social implications of the good in question. This is a technical condition that most professional economists, both orthodox and heterodox, will coincide in underlining. However, what appears to have become a problem in this regard, in certain academic and political instances, is the mythification of Competition: to tacitly consider it as an end in itself instead of as a means to improve social well-being. This mythical character de facto assigned to the concept ‘Competition’ is intended to be illustrated in this paper.
    Keywords: Competition; Modern Neoclassical Paradigm; Mainstream Economics; Economics and Myths; Heterodox Economics; Political Economy
    JEL: A11 A13 A14 D6 D60 K20
    Date: 2022–07
  4. By: Alexandre Chirat; Cyril Hédoin
    Abstract: In this paper, we claim that Downs’s theory of democracy provides a framework to build an economic and positive theory of populism. Our purpose in this paper is threefold. First, we highlight systematically overlooked aspects of Downs’s work. In particular, we demonstrate that Downs is a thinker of political polarization and that his focus on uncertainty is relevant to build an economic theory of populism. Second, we take the issue of populism as an opportunity to test the explanatory power of Downs’s political economy. Third, our reconstruction of Downs’s political economy enables a comparative analysis with the theoretical political science literature on populism to achieve a wide reflexive equilibrium on the understanding of both the nature and the causes of populism. In accordance with such a method, we conclude that populism is, in essence, a political force in a democracy, always present in a latent state, and rationally promoted by political platforms when the minimum consensus required for democratic stability is in crisis. That is why populism is likely to regenerate as much as to sound the death knell of a democratic political system.
    Keywords: Democracy - Populism - Rationality - Public interest - Information
    JEL: P00 B20 H00 D02
    Date: 2023
  5. By: Antonio Sánchez‐bayón (URJC - Universidad Rey Juan Carlos [Madrid]); Estrella Trincado-Aznar (UCM - Universidad Complutense de Madrid = Complutense University of Madrid [Madrid]); Francisco J Sastre (ESIC Business & Marketing School)
    Abstract: Contribution: This review offers a descriptive and explanatory study on the colonisation of the US West, under the hermeneutical turn from heterodox economic approaches, to deal with some current contradictions and anachronism in the mainstream view. Also, there is a systematisation of the American utopias, divided into religious and ideological experiments, with a comparison.
    Keywords: the United States of America (USA) religion & economics anarcho-capitalism Austrian School of Economics (Austrian Economics) new institutional approach colonisation communitarian farms utopias, the United States of America (USA), religion & economics, anarcho-capitalism, Austrian School of Economics (Austrian Economics), new institutional approach, colonisation, communitarian farms, utopias
    Date: 2023–01–24
  6. By: Jérôme Sgard (CERI - Centre de recherches internationales (Sciences Po, CNRS) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)
    Abstract: The conflict between Keynes and White, in the run-up to the 1944 Bretton Woods conference, left the IMF with a substantial capital, though without a rule-book on how to lend. The literature then insists on the introduction of the Stand-By Arrangement (1953), which remains till today the Fund's workhorse lending vehicle. Yet, the literature ignores the second step of the re-invention: policy conditionality, hence the capacity for the IMF to suspend lending when countries diverge from their pre-agreed economic objectives. This book chapter analyzes this brake-through, in the case of a policy loans to Paraguay and Bolivia, in 1956-1958. It then shows how this innovation triggered within a few years: 1/ a redefinition of the IMF as a crisis manager, in an entirely novel relation to borrowing countries; 2/ a full realignment of the relationship between the staff, the management and the key member-states, primarily the US; 3/ the adoption of a new economic framework, known as the monetary approach to the balance of payment; 4/ in parallel, the exploration of the legal and political consequences of defining the Stand-By as a non-contractual transaction, adequate to a relation to self-standing sovereign states.
    Keywords: IMF, conditionality, debt crisis
    Date: 2023
  7. By: Matthew Jaremski; David C. Wheelock
    Abstract: This paper examines how the election of 1912 changed the makeup of Congress and led to the Federal Reserve Act. The decision of Theodore Roosevelt and other Progressives to run as third-party candidates split the Republican Party and enabled Democrats to capture the White House and Congress. We show that the election produced a less polarized Congress and that new members were more likely to support the Act. Absent the Republican split, Republicans would likely have held the White House and Congress, and enactment of legislation to establish a central bank would have been unlikely or certainly quite different.
    Keywords: Federal Reserve Act; Progressive Party; central bank; Aldrich plan
    JEL: N42 G28 P43
    Date: 2023–04
  8. By: François Facchini (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: L'impôt sur l"héritage est un impôt sur le transfert de la fortune au moment de la mort du contribuable (taxes on transfers of wealth). Il s'agit d'un impôt sur la richesse du défunt. La succession imposable est égale à la valeur des actifs détenus par le contribuable au moment du décès, moins les legs au conjoint exonéré, les sommes qui font l'objet d'abattement et d'exonération, les dettes, les contributions à des organismes de bienfaisance, les frais funéraires et le coût de l'administration de la succession. Il est au cœur d'une importante actualité. Cet article se propose d'en résumer l'essentiel. Il focalise l'attention sur le biais égalitariste qui entoure l'ensemble des débats contemporains sur la taxation sur l'héritage dans une première section. Il rappelle à la suite de Robert Nozick (1974) qu'inégalité et injustice ne sont pas synonyme et que multiplier les statistiques sur les inégalités ne dit rien sur la justice ou l'injustice d'un ordre économique. Il présente dans une troisième section la littérature sur l'efficience de ce type d'impôt et constate que l'impôt sur l'héritage a plutôt un effet négatif sur l'épargne et la croissance de long terme d'un pays. Si l'impôt sur l'héritage n'est ni juste ni efficient, il devrait donc être aboli comme dans de nombreux pays. Cela répondrait aux attentes de l'opinion publique en la matière.
    Keywords: impôt sur l'héritage, justice, inégalités, efficience, libéralisme
    Date: 2023–03

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