nep-hpe New Economics Papers
on History and Philosophy of Economics
Issue of 2024‒05‒20
six papers chosen by
Erik Thomson, University of Manitoba

  1. The Export of Capital to Colonies and the Falling Rate of Profit in Economic Thought: 1776-1917 By Walke, Adam
  2. The Vacuity of Ludwig von Mises’ Apriorism By Scheall, Scott
  3. Математическая экономика в эпоху социализма и переход к рынку By Polterovich, Victor
  4. Large Effects of Small Cues: Priming Selfish Economic Decisions By Avichai Snir; Dudi Levy; Dian Wang; Haipeng (Allan) Chen; Daniel Levy
  5. Stratification economics: Historical Origins and Theoretical Foundations By Davis, John B.; ;
  6. Understanding Money Using Historical Evidence By Adam Brzezinski; Nuno Palma; Francois R. Velde

  1. By: Walke, Adam
    Abstract: Classical political economists developed several different explanations for what they saw as an inherent tendency for the rate of profit to decline over time. In the second quarter of the nineteenth century, some British advocates of colonization developed a corollary to those theories, suggesting that exporting capital to colonies could help arrest and reverse the decline. That argument was championed by the English political economist and promoter of colonization projects Edward Gibbon Wakefield, and it was systematized by John Stuart Mill. Ironically, the view that capital export and colonization played crucial roles in sustaining the rate of profit in advanced economies was later adopted by some Marxist theorists. Parallels between Karl Marx and J.S. Mill may help explain the remarkable theoretical continuity on this topic between nineteenth-century British advocates of colonization and early-twentieth-century Marxist critics of colonialism.
    Date: 2024–04–12
  2. By: Scheall, Scott
    Abstract: Ludwig von Mises’ methodological apriorism is often attributed to the broader Austrian School of economics. However, there is considerable controversy concerning the meaning of Mises’ justification of his apriorism. There are inconsistencies within and across Mises’ methodological writings that engender confusion in the secondary literature. This confusion is aggravated by the fact that Mises’ apriorism cannot be interpreted as an artifact of his historical milieu. The two prevailing families of interpretation both treat Mises’ apriorism as anachronistic, albeit in divergent senses. I conclude that the primary and secondary literatures on Mises’ apriorism indicate its inconsistency and incoherence. We have no idea what justification Mises intended when he asserted the a priori nature of the fundamental propositions of economics. If this is right, then, whatever method(s) they follow, Austrian economists cannot (deliberately) follow Mises’ apriorism, because no one knows well enough how Mises meant to justify it to follow it purposefully.
    Date: 2024–04–12
  3. By: Polterovich, Victor
    Abstract: The article is devoted to the study of the history of the Soviet school of economics and mathematics, its struggle with the official ideology and attempts to influence the choice of strategies of socio-economic development. During the NEP period in the USSR a pleiad of brilliant economists worked, who possessed advanced statistical and economic-mathematical methods and obtained a number of fundamental results, which under favorable circumstances could become the basis for Russia's inclusion in the world flow of economic research. However, the leaders of the emerging scientific direction advocated a rational combination of the plan and the market, which contradicted the government's decision to curtail the NEP. The authorities demanded justification of their policy, they regarded independent research as hostile, and the school was crushed. Its revival began in the late 1950s after the exposure of the Stalin’s cult of personality, and took place in a fierce struggle with the Nachetnik Marxism. The paper shows that this struggle revealed the imperfection of the world mathematical economics of that time, which was focused on the study of market competition and did not consider the mechanisms of rationing, queues and black market characteristic of the planned economy. The intensive efforts made by Russian economists in this direction were belated. In the "war of programs" on the transition to the market that unfolded in the late 1990s, the concept of shock economy won. This result was facilitated by the pressure of international organizations, which did not care about the welfare of the USSR population, and the lack of unity among Russian economists. They united with each other and with leading Western economists belatedly, so that the program of reforms put forward by them could no longer influence the results of reforms. Nevertheless, the efforts of mathematical economists contributed to the formation of modern economic education and independent economic science in Russia.
    Keywords: Soviet mathematical economists, planned economy, ideology, rationing, queues, black market, reform programs, shock therapy, economic education
    JEL: A11 B23 B24 N01 O21 P21
    Date: 2024–04–22
  4. By: Avichai Snir (Department of Economics, Bar-Ilan University, Israel); Dudi Levy (Department of Economics, Bar-Ilan University, Israel); Dian Wang (Alvarez College of Business, University of Texas at San Antonio, USA); Haipeng (Allan) Chen (Tippie College of Business, University of Iowa, USA); Daniel Levy (Department of Economics, Bar-Ilan University, Israel; Department of Economics, Emory University, USA; ICEA; ISET, TSU; Rimini Centre for Economic Analysis)
    Abstract: Many experimental studies report that economics students tend to act more selfishly than students of other disciplines, a finding that received widespread public and professional attention. Two main explanations that the existing literature offers for the differences found in the behavior between economists and non-economists are: (i) the selection effect, and (ii) the indoctrination effect. We offer an alternative, novel explanation: we argue that these differences can be explained by differences in the interpretation of the context. We test this hypothesis by conducting two social dilemma experiments in the US 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). We use priming to manipulate the cues that the participants receive before they make their decision. We find that when participants receive cues signaling that the decision has an economic context, both economics and non-economics students tend to maximize profits. When the participants receive cues emphasizing social norms, on the other hand, both economics and non-economics students are less likely to maximize profits. We conclude that some of the differences found between the decisions of economics and non-economics students can be explained by contextual cues.
    Keywords: Self-Selection, Indoctrination, Self-Interest, Market Norms, Social Norms, Economic Man, Rational Choice, Fairness, Experimental Economics, Laboratory Experiments, Priming, Economists vs. Non-Economists
    JEL: A11 A12 A13 A20 B40 C90 C91 D01 D63 D91 P10
    Date: 2024–05
  5. By: Davis, John B.; ; (Department of Economics Marquette University; Department of Economics Marquette University)
    Abstract: Stratification economics (SE) investigates how economies are organized around group inequalities, especially by race and gender but also by ethnicity, national origin, religion, sexual orientation, etc. Its historical origins and theoretical foundations have both a structural strand that addresses how and a social behavioral strand. SE's structural strand goes back to Ricardo and Marx regarding the relationship between growth and distribution, and then draws on recent economic theory of noncompeting groups and dual economy models of labor market segmentation. SE's structural strand produces an inequality-based understanding of economics' standard goods taxonomy. The social behavioral strand builds on Du Bois's psychological wage concept, Veblen's social ladders theory of emulation, Blumer's theory of prejudice and stereotyping, and current social identity theory. SE's social behavioral strand makes it possible to explain how discrimination selectively stigmatizes people's social identities in order to reinforce existing intergroup inequalities.
    Keywords: stratification economics, intergroup inequality, caste, social groups, Ricardo, Marx, Lewis, Du Bois, Veblen, Blumer, social identity theory, goods taxonomy, stigmatization, intersectionality
    JEL: D31 D63 I31 J15 J16 Z13
    Date: 2024–04
  6. By: Adam Brzezinski; Nuno Palma; Francois R. Velde
    Abstract: Debates about the nature and economic role of money are mostly informed by evidence from the 20th century, but money has existed for millennia. We argue that there are many lessons to be learned from monetary history that are relevant for current topics of policy relevance. The past acts as a source of evidence on how money works across different situations, helping to tease out features of money that do not depend on one time and place. A close reading of history also offers testing grounds for models of economic behavior and can thereby guide theories on how money is transmitted to the real economy.
    Keywords: Monetary policy; Monetary History; Natural Experiments
    JEL: E40 E50 N10
    Date: 2024–04–05

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