Monoculture versus diversity in competition economics

Economics rightfully represents the major basis for competitionpolicy. Next to generating knowledge about competition and itswelfare effects, the currently popular ‘more-economicapproach’ is charged with a number of additional hopesand expectations. While this article highlights the benefitsof economics-based competition policy, it takes a cautious stancetowards excessive expectations, in particular regarding theidea that a monocultural, ‘unified’ competitiontheory as an exact, objective and unerring scientific approachto antitrust could make normative assessment and generalisationssuperfluous. Diversity in competition economics is advocatedin two ways. First, competition economics is empirically characterisedby a considerable pluralism of theories and policy paradigms.Second, it is demonstrated that this diversity of theories istheoretically beneficial for future scientific progress. Asno ultimate competition theory can ever be expected., the ‘more-economicapproach’ must be extended in order to embrace diversity.     

Capabilities as causal powers

The author argues that Sen's capability approach is primarilya philosophical under-labouring exercise aimed at elaboratingcertain central economic categories, and that the philosophicaland methodological underpinnings of Sen's approach are radicallydifferent from those of contemporary welfare economics and mainstreameconomic practice. Sen's notion of ‘capabilities’as the potential functionings to achieve well-being is interpretedhere as a specification of the ontological category of ‘causalpower’, presupposing an open system conception of realitythat contrasts with much of contemporary economic practice.     

Post-Keynesianism, socialisation of investment and Swedish wage-earner funds

This paper analyses the performance of one of the most controversialof recent economic policy ‘experiments’, namelySwedish Wage-earner Funds (WEFs). It examines the ability ofthe WEFs to meet macroeconomic, financial and democratic objectives.The analysis indicates a favourable financial performance, butlittle significant democratisation. Macroeconomic influencewas constrained by the limited size of the scheme and, thoughassociated with positive changes in economic variables, theexperiment was ultimately overwhelmed by the collapse of anasset price ‘bubble’. Nevertheless, the performanceof the WEFs has legitimised the concept of collective investmentfunds as an economic policy instrument.     

On the opportunism-independent theory of the firm

Previous developments in the opportunism-independent theoryof the firm are either restricted to special cases or are derivedfrom the capabilities or resource-based perspective. However,a more general opportunism-independent approach can be developed,based on the work of Demsetz and Coase, which is neverthelesscontractual in nature. This depends on ‘direction’,that is, deriving economic value by permitting one set of actorsto direct the activities of another, and of non-human factorsof production. Direction helps to explain not only firm boundariesand organisation, but also the existence of firms, without appealingto opportunism or moral hazard. The paper also considers theextent to which it is meaningful to speak of ‘contractual’theories in the absence of opportunism, and whether this analysiscan be extended beyond the employment contract to encompassownership of assets by the firm.     

Naturalised epistemology and economics

The relevance to economics of naturalised epistemology (alsoknown as the naturalistic turn) from philosophy of science hasrecently been argued by economic methodologists, especiallyby D. Wade Hands (Reflection Without Rules: Economic Methodologyand Contemporary Science Theory, Cambridge, Cambridge UniversityPress, 2001). This concept is held by Hands to constitute partof the ‘new economic methodology’ that consistsof the ‘interpenetration of economics and science theory’.Contrary to Hands's case, naturalised epistemology is shownhere not to represent a qualitatively new concept, to possesslittle coherent meaning, and to be incapable of charting aninnovative way forward for economics. Although there are moreissues concerning naturalism bearing on economics than are notedby Hands, three specific limitations of naturalised epistemologyare discussed. These and other limitations are related to theeconomics examples Hands proposes suggesting the usefulnessof naturalised epistemology for economics.     

Wage formation in historical perspective: the French experience

Translator's note: In this article Robert Bayer introduces thenotion ‘regulation’ as a key concept in analysesof the labour market. The term refers to the balance of social,institutional and economic forces which characte rise at a particulartime the economic system as a whole or particular parts of it.I considered translating ‘regulation’ as ‘order’,‘regime’, ‘system’ or ‘formation’;but these terms are either too static or already bear inappropriateconnotations. It was therefore decided to retain the Frenchexpression in the English text.     

A critical realist interpretation of evolutionary growth theorising

The paper discusses a critical realist interpretation of evolutionarygrowth theorising by focusing on some of its basic characteristics.The evolutionary ontology is complex, differentiated, structured,systemic, open, ever-changing and radically uncertain. Its methodologytends to be increasingly based on ‘appreciative’theorising, retroductive explanations and interdisciplinaryanalysis. After discussing these features, the paper suggeststhat critical realism may indeed constitute an important philosophicaland methodological foundation for the future development ofevolutionary theories of economic growth.     

The future of development economics: a methodological agenda

This paper discusses methodological differences between universalismand particularism in development economics by focusing on the‘East Asian Miracle’ debate. It proposes to builddevelopment economics as part of hetero-economics, not mono-economics,following Max Weber's methodology of social science, and suggestsdeveloping intermediate theories by abstracting directly fromgiven comparative settings. It also discusses the limitationsthat are inherent in this method, as well as ways to employthe method in actual analyses. This paper argues that the futuretask of development economics lies in recombining existing theoriesand developing new, complementing theories that will systematicallydelineate the diversity of developing countries.     

The principle of institutional direction: Coase's regulatory critique of intervention

That Coase's political convictions changed from an early socialismto a later neo-liberalism stands in apparent contrast to thetheoretical consistency of his early (‘The Nature of theFirm’) and later (‘The Problem of Social Cost’)contributions to economics. Offering further evidence abouthis early views in particular, this paper takes a fresh lookat Coase's views on competition and antitrust to show that heconsistently stressed the role of what we shall call the principleof ‘institutional direction’, and that this principleinvolves an important criticism of both neo-liberal and socialistviews on regulation and state intervention.     

Money, cycles and capital formation: von Mises the 'Austrian' vs. Robertson the 'Dynamist'

A ‘disequilibrium’ between saving and investmentdecisions determines a maladjustment in production, the disruptionof capital, and a downturn in economic activity, according tothe ‘Austrian’ approach. By contrast, the ‘Dynamists’argue that it may lead to economic growth, as disequilibriummay well be instrumental to capital accumulation. What explainsthese different predictions in otherwise similar models? Thekey is in the interplay between the analytical features andthe ideological options underlying each of these approaches:alternative lines of thought, entirely compatible with theiranalytical models, were abandoned by some of these authors whenthey conflicted with their pre-analytical views. This paperillustrates the argument by exploring the models of two ‘fathers’,von Mises and Robertson.     

The economic case for international labour standards

This paper explores the economic case for international labourstandards. Granting workers rights of free association and collectivebargaining confers both static and dynamic economic efficiencies.Static efficiencies refer to one-time gains from improvementsin economic practice. Dynamic efficiencies refer to gains fromimprovements to the growth path resulting from a shift awayfrom a ‘low road’ development path to a ‘highroad’ path. These efficiencies raise wages, employmentand output in developing countries, and they can also benefitworkers in developed countries. Labour standards are an institutionalmechanism for raising the quality of growth in both developingand developed countries. In this sense, they are a ‘win–win’institution.     

ACCUMULATION, CAPACITY UTILISATION AND DISTRIBUTION

This paper examines three approaches to the process of accumulationwhich are based on the ‘Keynesian premise’: the‘neo-Keynesian’, the ‘Kaleckian’ andthe ‘Sraffian’. Making some criticisms of the firsttwo from the viewpoint of the third and from a certain formal/conceptualperspective, we propose a synthetic model which is free fromthese criticisms and in which the adjustment of savings to investmentin the long period is achieved through all the three routesemphasised separately by these approaches: changes in the long-perioddegree of utilisation; changes in the ‘normal’ distributionof income; and variations in the size of productive capacity.The key to the synthesis is the hypothesis that, in the longperiod, the ‘normal’ degree of utilisation is endogenouslydetermined to coincide with the average level through mutualinfluence effected by investment in the short period. Our syntheticmodel, like the first two approaches, is in the line of steady-stateanalysis, but in a way compatible with the ‘Keynesianpremise’.     

The Schumpeterian role of financial innovations in the New Economy's business cycle

Alan Greenspan claims that modern financial innovations, especiallyfinancial derivatives, were major contributors to a Schumpeterianprocess of ‘creative destruction’ which produceda high-growth ‘New Economy’ and opposes their regulation.A different perspective emerges when it is recognised that the‘New Economy’ followed the general contours of aSchumpeterian business cycle, and the role of modern financialinnovations is examined in that context. The authors argue thatthe primary role of financial derivatives has been in contributingto ‘reckless finance’ and speculative excesses inthe second phase of that cycle, and that Schumpeter would favoursubjecting the use of derivatives to more regulation.     

Evolutionary macroeconomics: a research agenda

In this article, the goal is to offer a new research agenda for evolutionary macroeconomics. The article commences with a broad review of the main ideas in the history of thought concerning the determinants of economic growth and an introduction to the evolutionary perspective. This is followed by a selective review of recent evolutionary approaches to macroeconomics. These approaches are found to be somewhat disconnected. It is argued that the ‘micro-meso-macro’ approach to economic evolution is capable of resolving this problem by offering an analytical framework in which macroeconomics can be built upon ‘meso-foundations’, not micro-foundations, as asserted in the mainstream. It is also stressed that the economic system and its components are complex adaptive systems and that this complexity must not be assumed away through the imposition of simplistic assumptions made for analytical convenience. It is explained that complex economic systems are, at base, energetic in character but differ from biological complex systems in the way that they collect, store and apply knowledge. It is argued that a focus upon stocks and flows of energy and knowledge in complex economic systems can yield an appropriate analytical framework for macroeconomics. It is explained how such a framework can be connected with key insights of both Schumpeter and Keynes that have been eliminated in modern macroeconomics. A macroeconomic framework that cannot be operationalized empirically is of limited usefulness so, in the last part of the article, an appropriate methodology for evolutionary macroeconomics is discussed.     

Thinking about developmental states in Africa

During much of the 1980s and 90s, a literature emerged suggestingthat ‘developmental states’ were impossible in Africa.The arguments given ranged from cultural ones about the pervasivenature of clientalism to structural ones on the dependence ofAfrican economies or the atypical levels of rent seeking inAfrican economies. This paper argues that Africa has had statesthat were ‘developmental’ in both their aspirationsand economic performance. It further argues that these experiencesneed to be examined critically for useful lessons, an exercisethat has been hindered by an excessive levelling of the Africanpolitical and economic landscapes.     

The Dahrendorf hypothesis and its implications for (the theory of) economic policy-making

The sociologist R. Dahrendorf has recently suggested that thereis no and there ought to be no convergence of economic policiestowards some common ideal model. On the contrary, he statesthat ‘diversity is [...] at the very heart of a worldthat has abandoned the need for closed, encompassing systems’.It is shown in this paper that the Dahrendorf hypothesis isdifficult to reconcile with orthodox economic approaches toeconomic policy-making. A perspective on policy-making thatintroduces either fundamental uncertainty or endogenous policypreferences or both is, however, shown to be consistent withthe Dahrendorf hypothesis.