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on History and Philosophy of Economics |
| By: | Perry Mehrling (Pardee School of Global Studies at Boston University) |
| Abstract: | Bagehot is difficult for modern economists to read with understanding, for three reasons. He was a classical economist not neoclassical, his orientation was global not national, and, most importantly, his intellectual formation was as a practicing country banker not an academic. This paper adopts all three perspectives, and uses this frame to reinterpret his mature work, both Lombard Street and the unfinished Economic Studies, as the origin of the key currency tradition which continues as a minority view in modern economics. |
| Keywords: | Bagehot Rule, key currency, money view, Lombard Street, Ricardo |
| JEL: | B12 B17 B31 |
| Date: | 2024–01–04 |
| URL: | http://d.repec.org/n?u=RePEc:thk:wpaper:inetwp216&r=hpe |
| By: | Drakopoulos, Stavros A. |
| Abstract: | This short paper is the entry on Encyclopedia of Diversity, Equity, Inclusion and Spirituality (edited by Marques, J.). Springer, Cham, 2024. The entry describes the role, function, and nature of labor unions and their leadership from a non-orthodox perspective. It shows that since the end of the 19th century, a division between orthodox and non-orthodox approaches toward the study of labor unions can be discerned. The orthodox framework was formed in the late 19th century with the gradual establishment of Marginalism, and it consolidated itself with the dominance of early neoclassical economics. Orthodox economic theory did not devote much attention to the economic analysis of unions. On the contrary and during the same period, non-orthodox economists such as Sidney and Beatrice Webb and early institutionalists, had paid considerable attention to the study of unions, perceiving them as politico-economic organizations and emphasizing their wider role as social institutions. The legacy of those two approaches continued in the 20th century and contemporary analyses of labor unions. The orthodox approach (originating mainly from the work of John Dunlop), generally conceives unions as purely economic units, analogous to firms, which can be studied by applying the standard tools of microeconomic theory. In this framework, the notion of union leadership plays a minimum role. In contrast, the non-orthodox viewpoint (originating mainly from Arthur Ross’ works), embraces a holistic, institutional-political-based attitude to the study of labor unionism. |
| Keywords: | Trade Unions; Labor Union Leadership, Gender inequality |
| JEL: | J51 J70 M50 |
| Date: | 2024–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:119787&r=hpe |
| By: | Vergés-Jaime, Joaquim |
| Abstract: | En la economía académicamente dominante el paradigma del equilibrio general de mercados competitivos (EG) juega un papel fundamental. Aunque los manuales y textos de referencia dediquen páginas a hablar de, por ejemplo, el equilibrio en el duopolio, el marco de referencia es en el fondo el del paradigma del EG. Éste se basa fundamentalmente en la teoría neoclásica de la producción: teoría de la empresa y los costes, y de los mercados resultantes; además de en otros constructos (homo economicus, información perfecta, etc.). Y a su vez, la teoría neoclásica de la producción se sustenta en el axioma de los rendimientos decrecientes de escala en la producción de cualquier bien. En el presente artículo se expone un análisis de dicho axioma y de los supuestos, generalmente implícitos, en los que se basa; y, como tema central, se pone de manifiesto que las abrumadoras evidencias empíricas que ofrece la observación de nuestras economías de mercado no sustentan en absoluto dicho axioma y supuestos. Ni por tanto el modelo explicativo del EG, ni las implicaciones normativas de tal paradigma. ENGLISH ABSTRACT: In academic mainstream economics, the paradigm of the general equilibrium of competitive markets (GE) plays a fundamental role. Although textbooks and reference texts devote pages to talk about, for example, duopoly’s equilibrium, the frame of reference is basically that of the GE paradigm; which is based fundamentally on the neoclassical theory of production: a theory of the firm and its costs, prices determination, and of the resulting markets, as well as on other constructs (homo economicus, perfect information, etc.). And, in turn, this neoclassical theory of production relies on the axiom of the decreasing returns to scale in the production of any product or service. This paper presents an analysis of such axiom and of the assumptions, usually implicit, on which they rely; and, as a central topic, it shows that the overwhelming empirical evidence offered by the observation of our market economies does not support this axiom and deductive assumptions at all. Neither therefore the GE’s explanatory model, nor the normative implications of such a paradigm. |
| Keywords: | Mainstream Economics and empirical testing; Assumptions and axioms in Economics; Socio-political implications of Economics; The traditional assumption of ‘decreasing returns to scale’. |
| JEL: | A10 D01 D21 D22 D40 |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:119890&r=hpe |
| By: | André Lapidus (PHARE - Philosophie, Histoire et Analyse des Représentations Économiques - UP1 - Université Paris 1 Panthéon-Sorbonne); Pierre Januard |
| Abstract: | Throughout the Middle Ages, the charging of interest on monetary loans, as well as the sale of sacraments, were generally considered to be special types of sins: respectively, usury and simony. The repeated condemnations of these acts suggests to the contemporary reader that they could be viewed as prefigurations of contested commodities. Relying on Thomas Aquinas's works written in the second half of the 13th century, it is shown in this chapter that money and sacraments were indeed viewed as exchanged, though, in a sense, as traded for no price. The result is the existence, in the framework of exchange, of various situations which might be ranked according to increasing commodification: first, an absolute non-commodification for the money loan, whose price is zero due to the prohibition of the payment of interest to the lender due to the loan itself, although an indemnity can be paid for other reasons and, from an economic viewpoint, appears as a counterpart for the opportunity cost of the loan. Then, two ways of expressing a kind of commodification in dealing with the sacraments: a lexical commodification in which sacraments do have a "price", as Aquinas mentioned, but one that is out of reach on this earth; and a partial operational commodification, again for sacraments (especially for the Eucharist through mass offerings), in which something like an exchange for sacraments takes place, not at an impossible price but according to a kind of tariff which allows the priest to live. |
| Keywords: | Thomas Aquinas, Simony, Usury, Money loans, Sacraments, Just price, Commodification |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04396111&r=hpe |
| By: | Mark Glick (University of Utah); Gabriel A. Lozada (University of Utah); Pavitra Govindan (University of Utah); Darren Bush (University of Houston Law Center) |
| Abstract: | The Department of Justice and Federal Trade Commission Merger Guidelines (the "Merger Guidelines"), including the much improved latest revision in 2023 (the "New Merger Guidelines"), have continued to perpetrate what we call in this paper the horizontal merger efficiency fallacy. The fallacy arises because in the Guidelines the term "efficiencies" has become unmoored from its foundations in economic theory and has been reduced to the business school construct of cost savings. We show that cost savings can only be considered universally socially beneficial by acceptance of what is termed "the Consumer Welfare Standard" (antitrust) or "the surplus theory of welfare" (economics), a theory that has been discredited and abandoned by welfare economists. In economic theory, efficiency means Pareto Efficiency. We explore the various attempts to tether the cost savings definition of efficiency to Pareto Efficiency and explain why these attempts have failed. We conclude that there is no sound way to theoretically reconcile cost savings with the economic meaning of efficiencies. We then move beyond the efficiency fallacy and show how modern welfare economics can be used to integrate Congressional antitrust goals into the New Merger Guidelines. This requires abandoning the unsupported "standard deduction" for efficiencies and replacing it with an evidence-based assessment of how a specific merger under review potentially impacts Congressional antitrust goals. This change renders the present efficiency rebuttal section of the New Merger Guidelines superfluous, and we provide specific reasons why this section as currently drafted is flawed and should be jettisoned. |
| Keywords: | Antitrust, Efficiency, Consumer Welfare, Merger Regulation, Merger Guidelines |
| JEL: | D4 D6 L4 L5 |
| Date: | 2023–08–24 |
| URL: | http://d.repec.org/n?u=RePEc:thk:wpaper:inetwp212&r=hpe |
| By: | Lutz Bornmann; Klaus Wohlrabe |
| Abstract: | Differences in annual publication counts may reflect the dynamic of scientific progress. Declining annual numbers of publications may be interpreted as missing progress in field-specific knowledge. In this paper, we present empirical results on dynamics of progress in economic fields (defined by JEL codes) based on a methodological approach introduced by Bornmann and Haunschild (2022). We focused on publications that have been published between 2012 and 2021 and identified those fields in economics with the highest dynamics (largest rates of change in paper counts). We found that the field with the largest paper output across the years is ‘Economic Development’. The results reveal that the field-specific rates of changes are mostly similar. However, the two fields ‘Production and Organizations’ and ‘Health’ show point estimators which are clearly higher than the estimators for the other fields. We investigated the publications in ‘Production and Organizations’ and ‘Health’ in more detail. |
| Keywords: | scientometrics, bibliometrics, dynamics of research fields, economics, JEL code |
| JEL: | A10 A12 A14 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_10881&r=hpe |
| By: | Michela Barbot (IDHES - Institutions et Dynamiques Historiques de l'Économie et de la Société - UP1 - Université Paris 1 Panthéon-Sorbonne - UP8 - Université Paris 8 Vincennes-Saint-Denis - UPN - Université Paris Nanterre - UEVE - Université d'Évry-Val-d'Essonne - CNRS - Centre National de la Recherche Scientifique - ENS Paris Saclay - Ecole Normale Supérieure Paris-Saclay) |
| Abstract: | How was the correlation between prices and value understood before the birth of economic science? And what were the institutional and material foundations of valuation procedures? The field of civil law offers an interesting perspective to explore these questions as it allows to analyse the plurality of means by which the preindustrial societies coped with a common challenge: reducing the risk of price conflicts in order to ensure the enforcement of contractual commitments. |
| Abstract: | Comment la dialectique entre les prix et la valeur des biens était-elle appréhendée avant d'entrer dans le giron de la science économique ? Et quels étaient les fondements institutionnels et matériels des opérations d'estimation ? La sphère du droit civil offre un angle intéressant pour répondre à ces questions puisqu'elle permet d'observer la pluralité des solutions que les sociétés d'Ancien Régime ont apportées à un même défi : celui de réduire le risque de conflits sur les prix afin de garantir le respect des accords contractuels. |
| Keywords: | Price, values, institutions, law, contracts |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04373041&r=hpe |
| By: | Andrew J. Seltzer |
| Abstract: | The Victorian Factories and Shops Act of 1896, the second minimum wage law in the world, empowered administrative agencies ("Special Boards") to set trade-specific minimum rates based on age, sex, and occupation. Much like modern debates, Victorian supporters of minimum wages argued that they would protect vulnerable workers while opponents argued that they would increase employers’ costs, resulting in unintended consequences for workers. Evidence from the actual minimum wages passed under the Act suggests that Boards were loosely constrained by market factors, but also that they had some discretion in minimum wage setting. This discretion was used differently by individual Boards; some essentially followed the market for their trades while others set minimum rates that were binding for at least some workers. To the extent that rates were binding, they tended to reduce inequality among adult male workers, particularly after a 1907 Federal ruling established a living wage for employers with operations in multiple states. However, minimum wages also increased inequality across groups, increasing wages of adult men relative to those of women and youths. The Act formally institutionalised gender-based pay differences, a practice that continued in Australian minimum wage setting for over 70 years. |
| Keywords: | Minimum wages, Australia, Protective Legislation |
| JEL: | N47 N37 J88 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:auu:hpaper:118&r=hpe |
| By: | Goodhart, C. A. E.; Postel-Vinay, Natacha |
| Abstract: | The City of Glasgow Bank failure in 1878, which led to large numbers of shareholders becoming insolvent, generated great public concern about their plight, and led directly to the 1879 Companies Act, which paved the way for the adoption of limited liability for all shareholders. In this paper, we focus on the question of why the opportunity was not taken to distinguish between the appropriate liability for ‘insiders, ’ i.e. those with direct access to information and power over decisions, as contrasted with ‘outsiders.’ We record that such issues were raised and discussed at the time, and we report why proposals for any such graded liability were turned down. We argue that the reasons for rejecting graded liability for insiders were overstated, both then and subsequently. While we believe that the case for such graded liability needs reconsideration, it does remain a complex matter, as discussed in Section 4. |
| Keywords: | corporate governance; limited liability; bank risk-taking; financial regulation; financial crises; senior management regime; banks; banking |
| JEL: | G21 G28 G30 G32 G39 N23 K22 K29 L20 |
| Date: | 2024–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:wpaper:121956&r=hpe |