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on History and Philosophy of Economics |
| By: | Claude Diebolt; Romain Diebolt; Tapas Mishra |
| Abstract: | This contribution revisits the origins of the concept of creative destruction by returning to Werner Sombart’s Krieg und Kapitalismus (1913). Although Sombart never used the expression schöpferische Zerstörung, a systematic page-by-page reading shows that he articulated a destruction–creation mechanism that anticipates the structural logic later formalized by Joseph Schumpeter. Sombart presents war as simultaneously destructive and generative, arguing that fiscal, institutional, and ecological ruptures are not peripheral to capitalism but central to its emergence. His analysis of deforestation, scarcity, and technological substitution (especially the shift from wood to coal and coke) offers an early model of how material crises can trigger innovations that reshape production systems and energy regimes. The article also examines the subsequent marginalization of Sombart’s contribution, situating it within broader methodological and political shifts in twentieth-century economics. It contrasts Sombart’s historically grounded mechanism with the evolution of Schumpeter’s thinking from 1911 to 1942, when the canonical formulation of creative destruction finally appeared. More broadly, the paper reflects on the dynamics of intellectual attribution in economic thought, illustrating how concepts often achieve recognition not through priority of insight but through subsequent elaboration and institutionalization. Reassessing Sombart thus enriches the genealogy of creative destruction and deepens our understanding of contemporary debates on innovation, energy transitions, war-related technological change, and the macroeconomic implications of AI. Building on recent work by Acemoglu, Mokyr, and others, the article argues that Sombart emerges not as the inventor of the term but as the first thinker to articulate its structural logic, and that recognizing this lineage enhances both historical scholarship and contemporary economic analysis. |
| Keywords: | Creative destruction; Werner Sombart; Joseph Schumpeter; History of economic thought; War and capitalism; Technological change; Structural transformation. |
| JEL: | B00 B31 O30 N00 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ulp:sbbeta:2026-15 |
| By: | Obregon Diaz, Carlos Federico |
| Abstract: | This paper reconstructs Adam Smith’s moral philosophy as a theory of social coordination grounded in moral sentiments and institutional structures, and extends it through the Economics of Belonging. It argues that economic participation depends on structures of belonging that integrate individuals into institutional systems. The paper develops a framework in which effective demand is understood as the economic expression of belonging, and the middle class as its structural carrier. It shows that sustained economic development depends on the expansion of socially integrated participation rather than solely on capital accumulation. The analysis contributes to institutional economics, moral economy, and development theory by providing a unified framework linking ethics, institutions, and macroeconomic dynamics. |
| Keywords: | Belonging; Effective Demand; Moral Economy; Adam Smith; Institutional Economics; Middle Class; Economic Development; Inclusion |
| JEL: | B12 B41 D64 O11 O15 Z13 |
| Date: | 2026–04–23 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128832 |
| By: | Van Den Hauwe, Ludwig |
| Abstract: | In this age of rising technocracy economists are called upon to re examine the methodological and epistemological foundations of their science. After an introduction concerning the nature and importance of economic methodology, this paper contains four sections. The first provides a summary overview of the development of economic methodology in the 20th century. The second reviews some aspects of what undoubtedly constitutes the most important methodological debate of the 20th century, namely the instrumentalism-versus-realism debate. The third section is devoted to the ongoing critique and disagreement brought forward by the Austrian School of economics in the domain of methodology. In the final section we consider the question “Where is economics going?”. |
| Keywords: | Methodology; Economic Methodology; Methodological Dualism; Methodological Monism; Instrumentalism-Realism Debate; Austrian School. |
| JEL: | B40 B41 |
| Date: | 2026–03–30 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:129032 |
| By: | Charles S. Gascon; Rehann Silvanus |
| Abstract: | This analysis traces the evolution of theory on government’s role in the economy over the past 250 years, from Adam Smith to Alfred Marshall to Paul Samuelson. |
| Keywords: | history of economics; fiscal policy; federalism; government spending |
| Date: | 2026–05–19 |
| URL: | https://d.repec.org/n?u=RePEc:fip:l00001:103273 |
| By: | Davis, John B. (Department of Economics Marquette University); (Department of Economics Marquette University) |
| Abstract: | W. E. B. Du Bois and Thorstein Veblen employed the concept of relative position. Du Bois' thinking reflects how for Stratification economics people's relative positions explain racial discrimination and segregation. Veblen reflects how for Institutionalist economics people's relative positions explain the role institutions have in the evolution of the economy. Racism in the US marginalized Du Bois' contributions, leaving a divide between his and Veblen's thinking and also between Stratification economics and Institutionalist economics. This has limited the perceived importance of the concept of relative position in economics, leaving it with the 'position-less' asocial individualism of Neoclassical-mainstream economics. This paper compares Du Bois and Veblen's conceptions of the concept of relative position and discusses the potential common ground it creates for Stratification economics and Institutionalist economics. |
| Keywords: | relative position, Du Bois, Veblen, racism, Stratification economics, Institutionalist economics |
| JEL: | B15 B31 B41 Z13 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:mrq:wpaper:2026-01 |
| By: | Shekhtman, Boris M. |
| Abstract: | The aim of this article is to demonstrate the theoretical incoherence and practical futility of the longstanding public debate “Capitalism vs. Socialism”. The paper offers a conceptual and theoretical analysis of the term “socialism” within the framework of Marx’s philosophical–economic theory. It argues that contemporary discussions of capitalism and socialism are distorted by entrenched terminological errors that were consolidated and institutionalised within the Soviet ideological model, whose influence continues to shape political and intellectual discourse today. By drawing a systematic distinction between Marx’s scientific theory—comprising dialectical materialism, historical materialism, and political economy—and the ideological construct developed during the Soviet period and commonly known as Marxism, the author demonstrates that the concept of a “socialist social formation” is theoretically inconsistent and lacks any foundation within the framework of historical materialism. The analysis shows that, according to Marx’s theoretical system, the type of social formation is determined by the mode of production and, therefore, by the type of labour employed. From this standpoint, both private and state ownership are capitalist in character when the production process is based on wage labour. Hence, the so-called “socialist” states of the twentieth century should be regarded as systems of absolute state capitalism—a form of capitalism in which the state is the sole and monopolistic owner of all means of production. The article further argues that the modern use of the term “socialism” results from a semantic substitution: instead of denoting a theoretically invalid type of social formation, it now refers to a social function of the capitalist state—namely, redistributive policy within the capitalist economic system. Clarifying these distinctions enables a more accurate understanding of Marx’s theoretical legacy and shows that, unlike the ideological doctrine of Marxism, his philosophical–economic theory supports rather than rejects the principles of a free society: private property, free labour, and economic efficiency. |
| Keywords: | Capitalism, Socialism, Soviet Marxist ideology, terminological confusion, Marx’s philosophical–economic theory, Historical Materialism, wage labour, Absolute State Capitalism, Semantic Substitution, free society. |
| JEL: | B24 P12 P2 |
| Date: | 2026–04–23 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128837 |
| By: | Obregon Diaz, Carlos Federico |
| Abstract: | This paper analyzes the epistemological status of economics by distinguishing between ideological content, closed formal systems, and scientific cores within economic theory. It introduces a methodological framework (disentangle) to evaluate the scientific validity of different schools of thought. The analysis demonstrates that economic theories become scientific only when they generate refutable hypotheses, engage with empirical data, and are grounded in real institutional and social belonging structures. The Economics of Belonging is presented as an institutional framework capable of integrating valid insights from different traditions while explaining economic development, crises, and inequality through belonging regimes and middle-class formation. |
| Keywords: | Economics of Belonging Economic methodology Science and ideology Institutional economics Economic epistemology Disentangle method Economic theory Middle class Economic development Global governance Belonging systems Comparative economic systems |
| JEL: | B25 B41 B50 D02 O10 O43 P16 |
| Date: | 2026–04–17 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128760 |
| By: | Jonung, Lars (Department of Economics, Lund University) |
| Abstract: | This paper is a translation of a talk given by Lars Jonung at the conference held in his honor at his 70th birthday in Lund on October 3-4, 2014. A few additions and updates have been made to the original talk. He came to Lund to study economics in the autumn of 1965. Both the city and the subject of economics have captivated him ever since. His research covers many areas of economic policy, primarily monetary and fiscal policy. He has a keen interest in the development of economics in Sweden, especially in Knut Wicksell and the members of the Stockholm School. He has participated extensively in Swedish public debate since the 1970s. He has been involved as an advisor both in Stockholm and in Brussels. After ten years at the European Commission as research advisor, he returned to Sweden to serve as chairman of the Fiscal Policy Council 2012-13 and as a senior professor at the Department of Economics at Lund University. He left this position when he turned 70 in the autumn of 2014, becoming professor emeritus |
| Keywords: | Monetary policy; fiscal policy; price controls; financial repression; financial deregulation; money supply; Riksbanken; Sweden |
| JEL: | B31 E31 E40 E50 E60 L43 N10 |
| Date: | 2026–05–09 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:lunewp:2026_003 |
| By: | Davis, John B. (Department of Economics Marquette University); (Department of Economics Marquette University) |
| Abstract: | Behavioral Macroeconomics draws on cognitive psychology’s errors and biases approach to argue that psychological factors acting on individual choice affect how the economy functions. Keynes drew on psychology in his ‘beauty contest’ account of convention to explain individual investor expectations in terms of the average expectation of all investors. This assumes individual investors identify with the group of all investors, anticipating social psychology social identity analysis. Kaleckian Post-Keynesian Economics focuses on distributional conflict between capital and labor. This also assumes individual capitalists and laborers identify with groups of capitalists and laborers. Stratification Economics makes social group identity the basis on which economies operate as systems of intergroup inequalities. This raises two related questions: what role do economic agents’ perceptions of their social identities have in explaining economies, and what does this imply for the Keynesian understanding of the income determination process and economic policy recommendation? This chapter discusses how social identity is understood in Stratification Economics to answer these questions. |
| Keywords: | Behavioral macroeconomics, Keynes' 'beauty contest, ' social group identity, HANK models, Kaleckian Post-Keynesian economics, Stratification economics, Keynesian income determination |
| JEL: | B22 D01 D91 E11 E12 E71 Z13 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:mrq:wpaper:2026-02 |
| By: | Marián Suchánek (Masaryk University, Faculty of Economics and Administration); Ján Krchňavý (Masaryk University, Faculty of Economics and Administration) |
| Abstract: | The nature of money is within the discipline of economics typically analysed merely by way of listing its functions grounded in properties of money things. But the discourse has recently more explicitly turned to addressing this foundational question of “What is money?” from the perspective of social ontology that sees money as a social phenomenon. We argue that any such venture should be able to account for the hierarchical structure of money. This argument integrates three distinct aspects of money i.) that in any community there is usually not one but multiple kinds of money; ii.) that these monies are of different qualities and therefore are structured within a hierarchy, and iii.) that these qualitative differences that distinguish individual kinds of money ultimately pertain to the rights and obligations that define each form of money. Building on recent debates about the hierarchy of money in economics—particularly The Money View and Modern Money Theory—this paper seeks to extend these discussions into the domain of social ontology, using the framework of social positioning developed by the Cambridge Social Ontology Group. |
| Keywords: | money; institutions; hierarchy of money; social ontology; money view; social positioning theory |
| JEL: | E42 B41 Z13 E51 |
| Date: | 2026–05 |
| URL: | https://d.repec.org/n?u=RePEc:mub:wpaper:2026-03 |
| By: | Obregon Diaz, Carlos Federico |
| Abstract: | This paper develops the Economics of Belonging as a structural extension of the capability approach. It proposes that capabilities are not primary units of analysis but outcomes of institutional belonging, defined as effective participation within institutional structures. The analysis integrates institutional economics, social choice theory, mechanism design, and game theory to demonstrate that aggregation from individual states is structurally infeasible under incomplete information and multiple equilibria. A dynamic framework is developed in which belonging drives effective demand and sustained economic growth through middle-class expansion. The paper contributes to development theory by providing a unified institutional and relational framework linking participation, demand, and long-term growth. |
| Keywords: | Economics of Belonging; Institutions; Effective Demand; Economic Development; Social Choice; Game Theory; Middle Class |
| JEL: | B41 D02 O11 O43 |
| Date: | 2026–04–21 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128817 |
| By: | Obregon Diaz, Carlos Federico |
| Abstract: | This paper develops a theoretical model of the firm based on the concept of belonging, defined as the degree of relational and institutional integration of individuals within an organization. It proposes that belonging determines the structure of internal competition, cooperation, and overall firm performance. The model distinguishes between low-belonging equilibria characterized by internal conflict and inefficiency, and high-belonging equilibria characterized by cooperation and improved economic outcomes. The framework incorporates elements of game theory and institutional analysis to explain how organizational structures influence equilibrium selection. The paper contributes to the literature on institutional economics, organizational behavior, and firm theory by introducing belonging as a key explanatory variable linking micro-level interactions with macro-level performance. |
| Keywords: | Belonging Philosophy of Belonging Firm Theory Organizational Economics Institutional Economics Corporate Governance Organizational Culture Cooperation and Competition Game Theory Nash Equilibrium Social Capital Relational Economics Stakeholder Theory Business Ethics Organizational Performance Institutional Legitimacy Economic Sociology |
| JEL: | D21 D23 L20 L22 M14 O10 P16 |
| Date: | 2026–04–17 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128766 |
| By: | Avichai (Department of Economics Bar-Ilan University); Dudi (Department of Economics Bar-Ilan University); Dian (Alvarez College of Business, University of Texas at San Antonio); Haipeng (Allan) (Tippie College of Business, University of Iowa); Daniel (Department of Economics Emory University, ICEA, ISET at TSU, and RCEA) |
| Abstract: | We use survey experiments to demonstrate that manipulating participants’ perceptions of the context can affect their decisions. We ran three survey experiments in the U.S. and Israel with participants from both economics and non-economics majors. In the experiments, participants face a tradeoff between profit maximization (market norm) and workers’ welfare (social norm). Our experimental setup enables us to discriminate between the self-selection and indoctrination effects. Existing studies find that economics and noneconomics students make different choices in such situations, which the studies argue is because of differences in personality traits between economics students and others. While such differences might exist, we argue that context also plays an important role. Using priming to manipulate the context, we demonstrate that when participants receive cues signaling that their decision has an economic context, both economics and non-economics students tend to maximize profits. When participants receive cues emphasizing social norms, on the other hand, both economics and non-economics students are less likely to maximize profits. We find that the role of context in determining behavior is at least as large as the baseline differences between economics and non-economics students. |
| Keywords: | Market Norms, Social Norms, Selection, Indoctrination, Self-Interest, Economic Man, Rational Choice, Fairness, Experimental Economics, Laboratory Experiments, Priming, Economists vs. Non-Economists |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:tbs:wpaper:2026-01 |
| By: | Obregon Diaz, Carlos Federico |
| Abstract: | This paper presents a theoretical and historical analysis of economic development based on the concept of belonging. It argues that existing growth theories fail to explain cross-country differences because they neglect institutional inclusion and the role of the middle class in expanding effective market demand. The Economy of Belonging framework interprets development as a function of institutional arrangements that determine participation in markets and access to rights. Comparative evidence from Russia, Latin America, and East Asia shows that successful development depends on the expansion of a broad middle class and the alignment of investment with technological frontiers. The paper contributes to the literature by integrating institutional economics, growth theory, and political economy into a unified framework centered on belonging. |
| Keywords: | • Economic development • Growth theory • Institutional economics • Middle class • Effective demand • Comparative development • Political economy • Economic history • Development policy • Market size |
| JEL: | B52 F63 N10 O10 O11 O15 O43 O47 |
| Date: | 2026–04–17 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:128765 |
| By: | Oswald, Andrew (University of Warwick) |
| Abstract: | In this short article I try to provide a description of the first conference on the economics of happiness. It was held in 1993 at the London School of Economics. In the ensuing three decades, a huge literature has emerged in this field. I attempt to offer a view on why this has happened. |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:wrk:warwec:1613 |
| By: | Paul Auerbach |
| Abstract: | The literature concerned with the state’s productive role in the economy is compromised by links to an economic orthodoxy that uses a free market, competitive outcome as a default setting in both predictive and normative terms, and to conceptions of capitalism as a species of spontaneous order, so that state intervention is invariably perceived as an exceptional event (‘market failure’) in the context of an otherwise autonomously functioning economy. Historically, the state has played a foundational role in economic activity through government exaction and confiscation of resources, the expanding and constricting market extent, by responses to the pervasive externalities present in commercial activity and in the development of human capital, and has had to cope with the complementarities between educational development and the absence of material deprivation. Further contemporary issues of public policy are first, the recent emergence (or, indeed, re-emergence) of China as a great economic power and second, the invariant presence of state intervention in the transition from agriculture to industry. A last issue is the political economy of the state: how do alternative political arrangements shape the real economy and, contrarily, how do differing outcomes in the real economy shape political structures and decisions? |
| Keywords: | socialism; production externalities; political processes; human capital; industrial policy |
| JEL: | B51 D62 D72 J24 L52 |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:pke:wpaper:pkwp2614 |
| By: | Alexis Akira Toda |
| Abstract: | Can artificial intelligence (AI) refute economic theory? I document experiments in which I asked several AI models (Gemini, Refine, Claude, and ChatGPT) to check the correctness of four published papers in economic theory, each containing an error that I helped identify or correct. ChatGPT Pro performed best, occasionally constructing counterexamples and corrected proofs, while other models fared worse. However, no model located a true error without substantial human guidance, and data contamination complicates interpretation. I argue that a competent human paired with a frontier model can outperform current peer review, but AI cannot yet refute economic theory on its own. |
| Date: | 2026–06 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2606.05383 |