nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2023‒08‒21
twelve papers chosen by
Erik Thomson
University of Manitoba

  1. History of Economic Thought’s Place in Macroeconomics Revisited By David Laidler
  2. Liberty, political economy and good government in Adam Smith By Paolo Silvestri; Benoît Walraevens
  3. THE MORAL FOUNDATIONS OF CAPITALISM. An Investigation of Adam Smith Pessimism By Roberto Censolo
  4. Platon, Aristoteles und Locke über Wirtschaftswachstum und Naturrecht By José Luis Cendejas Bueno
  5. Hidden order, concrete disorders and political arithmetic in Boisguilbert. The non-harmonious equilibrium of private interests against the good order. By Jean Daniel Boyer
  6. Schools of Athens: Surplus Approach, Marxism and Institutions By Cesaratto, Sergio
  7. On the existence of a French school of the science of commerce (1751-1759). By Jean Daniel Boyer
  8. Modeling Market Distortions and Moral Hazard By Nguhi, Alex
  9. Smart contracts and the Coase conjecture By Brzustowski, Thomas; Georgiadis Harris, Alkis; Szentes, Balázs
  10. Extending Amartya Sen’s Paretian Liberal Paradox to a Firm’s Hierarchy By Massimiliano Vatiero
  11. Boisguilbert contre Colbert… mais quel Colbert ? Critique du système fisco-financier et des détournements de fonds publics opérés par les hauts dignitaires de la monarchie absolutiste de Louis XIV. By Jean Daniel Boyer
  12. Hidden order, concrete disorders and political arithmetic in Boisguilbert. The non-harmonious equilibrium of private interests against the good order By Jean-Daniel Boyer

  1. By: David Laidler (University of Western Ontario)
    Abstract: The History of Economics Society was founded at a time when the History of Economic Thought was being expelled from the Economics post-graduate curriculum in many universities, and was one of the key institutions around which the sub-discipline successfully re-organised itself and continued to develop. Laidler (2003) argued that Economics itself, especially Macroeconomics, was suffering serious damage from this expulsion. It has continued to do so since.
    Keywords: History of Economic Thought, Macroeconomics, New Classical Economics, Empiricism, Deductivism
    JEL: B2 B22 B41 E10
    Date: 2023
  2. By: Paolo Silvestri (Unict - Università degli studi di Catania = University of Catania); Benoît Walraevens (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique)
    Abstract: What does Adam Smith mean by "good government"? How is it related to his political economy and system of natural liberty? No extensive or specific treatment of these hermeneutical issues has been given in Smith's scholarship. Answering these questions is fundamental to having a new interpretation of the various links between the legal, political, ethical and economic aspects of Smith's view of social order. The great theme of good government, which runs through the whole history of Western political-legal thought, if read in relation to the system of natural liberty, provides a different understanding of the thought of Smith on "Political Economy" as the "science of a statesman or legislator" and the new art of good government. Our reconstruction of Smith's view of good government aims to cast light on and give a new significance to his unfinished project of a new science of society.
    Keywords: Adam Smith, good government, liberty, political economy, legislator
    Date: 2023
  3. By: Roberto Censolo
    Abstract: Smith’s ideal vision of capitalism envisages a virtuous loop between social prudence and macroeconomic performance that outlines a “progressive state†of society. The trickle down of wealth strengthens the confidence in the future and a steady adherence to prudent behaviour. At the same time, this reinforcing character of prudence encourages liberal virtues needed for growth. However, a path of perpetual growth is not conceivable in Smith analysis, considering both a moral and an economic perspective. Indeed, Smith’s pessimism about the future of commercial society relates to the intrinsic inability of capitalism to sustain social prudence in the long run due to an internal contradiction in its development process. In the progress of division of labour, the industry of labourers is progressively substituted with the industry of machines. Therefore, the development process, which is initially sustained by “the industry of mankind†, endogenously expels those liberal virtues that grounds a progressive state of society, with crucial social and political implication.
    Date: 2022–12–02
  4. By: José Luis Cendejas Bueno (UFV - Université Francisco de Vitoria = Universidad Francisco de Vitoria)
    Abstract: The possibility of a growing accumulation of wealth, what we now refer to as economic growth, was something already considered by Plato, Aristotle and Locke, under the concept of chrematistics. In this paper we show how the economic thinking of these authors cannot be fully understood without considering the intimate relationship they establish between politics and property accumulation. In addition to continuities and ruptures in the arguments, there can be seen a growing understanding of the phenomenon of economic growth in such a way that, when we arrive at Locke, an evident paradigm shift can be appreciated. This change is rooted in the contributions of scholastic thinking for which the acquisition of property through human labour or industry enjoys legitimacy according to natural law.
    Keywords: Platonic communism, Aristotelian chrematistics, Lockean theory of property
    Date: 2023–07–03
  5. By: Jean Daniel Boyer
    Abstract: Seeking to clarify Boisguilbert’s conception of economics and of private interests, we examine his possible links with British political arithmetic and set out the influence this may have had on his thought. Then we explain how Boisguilbert estimates the wealth of the kingdom of France and the income of the king, and reconstruct the data he employs. We also show that Boisguilbert’s analysis of prices and public revenues is grounded on the distinction he makes between current and constant prices. Boisguilbert echoes Gramont’s analysis (1620): he seeks to dissipate the ‘monetary illusion’ to which he saw his contemporaries as having fallen victim, and which disrupted the good order. On these grounds, we show that two approaches coexist in Boisguilbert’s writings: 1. a conjectural and abstract conception of the history of society, inspired by the Scriptures; and 2. a more concrete study of the recent history of the French kingdom, although based on questionable sources. We reconstruct Boisguilbert’s conception of the good economic order following the principles of his conjectural historical analysis. We then demonstrate that Boisguilbert is an author who defends the importance of the good order of nature, which he considers as having been destroyed in France in the second half of the seventeenth century by the tax system, hoarding, the failure of circulation, and the low and disproportionate price of grain. We conclude that Boisguilbert is a very moderate supporter of the pursuit of private interests, seeing them as tending to disrupt the good order. He believes essentially in a natural pre-existing good order to which men have to bend, or else risk economic crisis.
    Keywords: Boisguilbert, circulation, crisis, interest, political arithmetic, order, proportion.
    JEL: E02 E21 E31
    Date: 2023
  6. By: Cesaratto, Sergio (University of Siena)
    Abstract: Relying on the lessons of Marx, Polanyi, Sraffa and Garegnani, the paper moves from the material anchor that the classical surplus approach provides to economic and institutional analysis in anthropology, archaeological and economic history. In surplus theory institutions regulate the material basis of society and in particular the extraction and distribution of the social surplus. Marx’s historical materialism is a natural source of inspiration for this view expunged, of course, of teleological and mechanical readings. The Marxian concept of modes of production has been however object of often over-complicated disputes among Marxists. These are not easily solved since historical results in anthropology, archaeological and economic history do not always deliver uncontroversial pictures of the working of ancient economies and of their transitional dynamics. Since Popper, historical materialism has also been object of methodological criticism. While the suggestions to complement macro analysis with consistent granular accounts of individual choices must be welcomed, methodological individualism is a dead end for social science. Individual and class choices must rather be dealt with through historical analysis. The surplus approach may provide support to both macro and micro analysis of behaviours and institutions. Interdisciplinarity is advocated in the paper.
    Keywords: Surplus approach; Historical materialism; Anthropology; Archaeology; Agency
    JEL: A12 B51 B52 Z13
    Date: 2023–08–01
  7. By: Jean Daniel Boyer
    Abstract: Often considered merely as a circle, the Gournay network was in fact a true school of economic thought that sought to develop and promote the science of commerce with the aim of reforming the French monarchy and transforming it into a commercial, colonial and maritime power, capable of overcoming the power of England. All its members followed the principles laid down by Gournay; all proposed the same scheme. Gournay’s school would thus be the concrete expression of the French mercantile system; i.e. the form that French mercantilism took in the 1750s. Its main objective was to generate trade surpluses, which would contribute to lower interest rates and so catalyse economic growth, increasing the prosperity and power of the French state.
    Keywords: Balance of men, balance of power, balance of trade, Gournay, mercantile system, science of commerce, school of thought.
    JEL: A11 A13 B11 E43 F02 F54 O24
    Date: 2023
  8. By: Nguhi, Alex
    Abstract: This paper explores the methods of modeling market distortions and elements of moral hazard. It also puts forward a Collision Balls Theory For Economics whereby the economy can be modeled as space where balls of different speeds, sizes and trajectories interact with one another to give out an aggregate speed/growth rate of an economy.
    Date: 2023–07–04
  9. By: Brzustowski, Thomas; Georgiadis Harris, Alkis; Szentes, Balázs
    Abstract: This paper reconsiders the problem of a durable-good monopolist who cannot make intertemporal commitments. The buyer’s valuation is binary and his private information. The seller has access to dynamic contracts and, in each period, decides whether to deploy the previous period’s contract or to replace it with a new one. The main result of the paper is that the Coase Conjecture fails: the monopolist’s payoff is bounded away from the low valuation irrespective of the discount factor
    JEL: D42 D82 D86 L12
    Date: 2023–05–01
  10. By: Massimiliano Vatiero
    Abstract: Smart contracts (i.e., agreements enforced by a blockchain) are supposed to work at lower transaction costs than traditional (and incomplete) contracts that instead exploit a costly legal enforcement. This paper challenges that claim. I argue that because of the need for adaptation to mutable and unpredictable occurrences (a chief challenge of transaction cost economics à la Oliver Williamson), smart contracts may incur higher transaction costs than traditional contracts. This paper focuses on two problems related to the adaptation: first, smart contracts are constructed to limit and potentially avoid any ex-post legal intervention, including efficiency-enhancing adaptation by courts. Second, the consensus mechanism on which every smart contract depends may lead to additional transaction costs due to a majority-driven adaptation of the blockchain that follows Mancur Olson’s Logic of groups. The paper further proposes several institutional expedients that may reduce these transaction costs of smart contracts.
    Keywords: Paretian liberal paradox, Amartya Sen, A firm’s hierarchy, Transaction costs, Code of business conduct
    JEL: D23 D63 D71 I30 J01
    Date: 2023
  11. By: Jean Daniel Boyer
    Abstract: L’article entend montrer que Boisguilbert n’était pas un anti-colbertiste. Il propose une critique du système fiscal qui avait appauvri la France de Louis XIV. Pourtant, malgré une pression fiscale plus forte, le roi n’en aurait pas bénéficié. Au contraire, une bonne partie de la cour, comme de l’administration royale, se serait enrichie à ses dépens, suite à la mise en place d’un système fisco-financier aux caractères singuliers. Nous concluons que l’adversaire de Boisguilbert était bien Colbert : il est condamné pour son intéressement personnel au système fisco-financier qu’il avait contribué à mettre en place. Par extension, Louis XIV et l’absolutisme étaient également remis en cause.
    Keywords: Boisguilbert, Colbert, crise, finance publique, Louis XIV, système fisco-financier.
    JEL: B11 H20 H22
    Date: 2023
  12. By: Jean-Daniel Boyer (LinCS, BETA, University of Strasbourg, France)
    Date: 2023

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