The Work Ethic in Industrial America, 1850–1920

Clarence Ayres wished to avoid moral relativism or agnosticism in the social sciences, yet he also rejected what he called the “transcendental” epistemology of classical philosophy, an epistemology grounded in the desire to know absolute or ultimate truths. He wanted to find a middle ground between absolutism and relativism by separating “technology” from “ceremony,” and by replacing the ends/means dichotomy with an ends/means continuum. This paper examines his articulation of the issues, and in this context also examines the work of two more recent theorists, Gary Becker and Richard Posner. We conclude that Ayres' epistemological middle ground remains elusive.     

Recontextualizing Clarence Ayres’s The Theory of Economic Progress through Archival Evidence

Abstract

Our article seeks to recontextualize Clarence Ayres’s The Theory of Economic Progress through a reconsideration of the criticisms of the book and Ayres’s personal standpoint on it. We believe that the negative reception of the book conveys the mainstream perspective. Additionally, our article stresses some of Ayres’s thoughts on Western society that were not included in The Theory of Economic Progress but were introduced by him through correspondence around the same time his famous book was written and disseminated. We conclude that Ayres was more radical than his writings reveal.     

The distance between Buchanan's “An Economic Theory of Clubs” and Tiebout's “A Pure Theory of Local Public Expenditures”. New insights based on an unpublished manuscript

This article introduces Buchanan's comment on Tiebout's “A Pure Theory of Local Public Expenditures”. It helps us to understand the nature of the relationship between Buchanan and Tiebout. Usually, it is claimed that Buchanan modelled Tiebout's insights, that there exists a Buchanan-Tiebout hypothesis, and that Buchanan in 1965 complemented what Tiebout had written in 1956. We show that Buchanan could not have written “An Economic Theory of Clubs” as a complement of “A Pure Theory of Local Public Expenditures”. He disagreed with Tiebout's ideas on mobility because he saw mobility as a cause of inefficiencies and not a cause of homogeneity in groups. This is what we show by putting Buchanan's comment on Tiebout into historical perspective. It appears that Buchanan interpreted Tiebout 1956 from the perspective of his works on fiscal federalism from the early 1950s. We show that there is a continuity between Buchanan's work from the early 1950s and his works in the early 1970s; and Buchanan's way of reading Tiebout is part of it. Hence, when he wrote “An Economic Theory of Clubs”, Buchanan was convinced that Tiebout was wrong and that he was offering an alternative framework for public economics.     

Adam Smith: From Propriety and Sentiments to Property and Wealth

“Why return to Adam Smith?” Because we learn that he had fresh-for-today insights, derived from a modeling perspective that was never part of economic analysis. Smith wrote two classics: The Theory of Moral Sentiments (1759; hereafter Sentiments); and An Inquiry into the Nature and Causes of the Wealth of Nations (1776; hereafter Wealth). In Sentiments it is argued that human sociability in close-knit groups is governed by the “propriety and fitness” of conduct based on sympathy. This non-utilitarian model provides new insights into the results of 2-person experimental “trust” and other games that defied the predictions of traditional game theory in the 1980s and 90s, and offers testable new predictions. Moreover, Smith shows how the civil order of “property” grew naturally out of the rules of propriety. Property together with what I call Smith's Discovery Axiom then enabled his break-through in Wealth that defined the liberal intellectual and practical foundation of two centuries of Western economic growth.     

Institutionalism,Planning, and the Current Crisis

This article originated in a shock of recognition. In the second volume of his discourse on “Civilization and Capitalism,” Fernand Braudel muses on the “eclecticism” of “the most advanced kind of capitalism”: “As if the characteristic advantage of standing at the commanding heights of the economy … consisted precisely of not having to confine oneself to a single choice, of being able, as today’s businessmen would put it, to keep one’s options open.”¹ My colleagues and I work as venture capitalists and as investment bankers of a specialized kind, engaged in raising capital to support the growth of technologybased companies and in realizing liquidity for their founding investors—often ourselves—by managing public offerings of their shares or by merging them into much larger companies. A primary virtue of our practice is the opportunity to choose with broad discretion where to commit our own and our clients’ capital across what Braudel calls “the differential geography ofprofit.”²     

Adam Smith's Ethics and the “Noble Arts” 1

Adam Smith's character-based ethical system lays the foundation for his vision of the social and economic good. Within this system, the arts perform a critical role. Smith's essays “Of the Imitative Arts” and his Lectures on Rhetoric and Belles Lettres are useful companions to The Theory of Moral Sentiments in analyzing the mechanisms whereby literature and the arts excite moral development. The arts stretch the boundaries of imagination and perspective, stimulating self-awareness and self-reflective growth. When combined with rational thought, decision-making takes place through an internal dialogue in which this wider perspective weighs upon one's “impartial spectator” and becomes the background for action. According to this view, the arts provide positive externalities for society and should be encouraged through public policy. The arts promote a conversation that becomes part of the common goods of society, including that of science.     

Three macroeconomic syntheses of vintage 1937: Hicks,Haberler, and Lundberg

Abstract

The 1920s and 1930s were years of intensive debate about economic dynamics and stabilisation policies. There was a large variety of explanations of cycles and depressions, and Keynes’ General Theory of Employment, Interest and Money (1936) was pitched against them. In 1937, followed three different attempts to provide synthetic expositions of macroeconomic theory that would deal with the Keynesian challenge: Hicks’ Mr. Keynes and the “Classics”, Haberler's Prosperity and Depression, and Lundberg's Studies in the Theory of Economic Expansion. This paper compares those 1937 syntheses and contrasts them with the “Neoclassical Synthesis” and the current “New Neoclassical Synthesis”.     

Ivan Kinkel's (1883–1945) theory of economic development

Abstract

This paper presents and discusses the “Attempt at Constructing a New Theory of Economic Development and Cultural Cycles”, published by the Bulgarian economist and sociologist of Russian origin, Ivan Kinkel (1883–1945) in 1921. Kinkel's theory, although unknown outside Bulgarian academic circles, carries a range of original ideas and new insights within the frame of Schmollerprogramm. It emphasises the importance of studying economic development as sociocultural evolutionary change, focuses on the role of unity in social life and the plurality of human motives and attempts to methodologically link theory and history into a multidisciplinary approach. Kinkel's work in general, and his theory of cyclical development in particular, can not only be of value for the study of economic thought and the diffusion of ideas, but can also offer insights into the forces underlying the profound changes that we have been witnessing recently.     

Will the MEGA2 edition be a watershed in interpreting Marx?

Abstract

The MEGA² edition is a watershed in interpreting important aspects of Marx’s oeuvre, but not all of them. It provides hints as to why Marx failed to complete his magnum opus, Capital, and informs about his doubts regarding the “law of motion” of capitalism centred on the “law of the falling tendency of the rate of profit” he was keen to establish.     

SOCIAL NORMS,LOCAL INTERACTION,AND NEIGHBORHOOD PLANNING*

This article examines optimal social linkage when each individual's repeated interaction with each of his neighbors creates spillovers. Each individual's discount factor is randomly determined. A planner chooses a local interaction network or neighborhood design before the discount factors are realized. Each individual then plays a repeated Prisoner's Dilemma game with his neighbors. A local trigger strategy equilibrium (LTSE) describes an equilibrium in which each individual conditions his cooperation on the cooperation of at least one “acceptable” group of neighbors. Our main results demonstrate a basic trade‐off in the design problem between suboptimal punishment and social conflict. Potentially suboptimal punishment arises in designs with local interactions since in this case monitoring is imperfect. Owing to the heterogeneity of discount factors, however, greater social conflict may arise in more connected networks. When individuals' discount factors are known to the planner, the optimal design exhibits a cooperative “core” and an uncooperative “fringe.”“Uncooperative” (impatient) types are connected to cooperative ones who tolerate their free riding so that social conflict is kept to a minimum. By contrast, when the planner knows only the ex ante distribution over individual discount factors, then in some cases the optimal design partitions individuals into maximally connected cliques (e.g., cul‐de‐sacs), whereas in other cases incomplete graphs with small overlap (e.g., grids) are possible.     

经纬度延伸:发展劳动价值论

依据卫兴华教授的《劳动价值论需要创新与发展》一文的结构框架,提出用“经纬度延伸”这一核心思路来解决劳动价值论的矛盾问题。本文认为,传统的关于“商品生产”的劳动价值论是狭隘的,应该经度由生产延伸到流通,纬度由商品延伸到服务,从而形成完整意义上的劳动价值论。在构建了新框架体系基础上,还探讨了其它相关问题,证明根据“经纬度延伸”这一思路能够对劳动价值论中现有的矛盾进行合理的解释。     

On the Relevance of John Rawls's Theory of Justice to Welfare Economics

Mainstream microeconomic theory makes some use of John Rawls's Theory of Justicein discussing welfare economics and social welfare functionals. While various elements of his approach are usually mentioned, his basic point is generally taken to be his difference principle (maximizing the welfare of the worst off individual) applied as a decision principle for evaluating the equity of resource allocation.

To take the difference principle as the essence of Rawls's work is an error. The present paper reviews the basic argument of the Theory of Justice

compares it with the use that economists make of it, and concludes that in a number of quite specific ways Rawls's ideas are misrepresented and misused by mainstream microeconomists.     

Marx,postmodernity, and transformation of the individual

Postmodernity raises for Marxism the question of what happens to the alienated subject's consciousness and purposeful action in the aftermath of its alienation. Arguing that some of Marx's own ideas can shed light on this question, I make a conceptual distinction between form of consciousness and mode of consciousness to capture what I take to be the kernel of his thinking on the transformation of the “average” individual and her/his consciousness in his Early Writings, and especially in the Grundrisse.     

Professor Fisher and the quantity theory – a significant encounter

Abstract

Irving Fisher's encounter with the Quantity Theory of Money began in the 1890s, during the debate about bimetallism, and reached its high point in 1911 with the publication of The Purchasing Power of Money. His most important refinement of the theory, derived from his recognition of bank deposits as means of exchange, was to treat their out of equilibrium recursive interaction with inflation as integral to it. This treatment underlay both his 1920s work on the business cycle as a “dance of the dollar” and his advocacy of subjecting monetary policy to a legislated price stability rule, initially to be based on his “compensated dollar” scheme. Fisher's failure to recognise the onset of the Great Depression even as it was happening was directly related to his faith in the quantity theory's seeming implication that price level stability in and of itself guaranteed the continuation of prosperity, while his subsequent work on the debt deflation theory of great depressions initially failed to repair the damage that this failure did to his reputation, and to that of the quantity theory. In the 1930s Fisher nevertheless remained an active supporter of various schemes to reflate and then stabilise the price level. His subsequent influence on the quantity theory based Monetarist counter-revolution that began in the 1950s lay, directly, in its deployment of his analysis of expected inflation on nominal interest rates, and, indirectly, in its espousal of the case for subjecting monetary policy to a legislated rule.     

Barbaric gold and civilised banking: Keynes’s Indian Currency and Finance. A view from the South after 100 years

Indian Currency and Finance (ICF), Keynes first book, remains 100 years after its publication, as relevant today as it was remarkable then. It anticipates many of Keynes key ideas now better associated with his Treatise of Money, and his The General Theory of Employment Interest and Money, as well as many of the central ideas of post-Keynesian economics. Issues such as the inherent instability of the banking and currency system and the importance of appropriate regulation to stabilise them, which Keynes addresses in ICF remain on the minds of analysts and policy makers today. It is a brilliant and prescient exposition by the young Keynes and is highly recommended to a contemporary readership.     

MULTIPLE THRESHOLDS IN THE NEXUS BETWEEN WORKING HOURS AND PRODUCTIVITY

Changes in working hours may have two contrasting effects on productivity: a “fatigue effect” and a “learning effect.” An increase in working hours may lead to the accumulation of workers' proficiency and skill in his or her job, while it may cause the level of workers' fatigue to increase. Our estimation results find multiple thresholds in the linkage between working time and productivity, supporting the existence of learning effect as well as fatigue effect from working time extension. The results of our study provide some implications for the recent discussion on reform of the working time system: for example, (i) the overall effects of changes in working time depend upon a variety of factors, such as the initial level of working hours and the features of the industry concerned; and (ii) job sharing may induce employers to substitute part‐timers for full‐time workers, thereby hindering workers' accumulation of skills. (JEL J24, D24, D92, O47)     

Marx,primitive accumulation,and the impact of Sismondi

Abstract

This article re-examines Marx’s well-known concept of “primitive accumulation” in relation to Marx’s successive attempts to give a historical explanation for the birth of “capitalism”. Marx formulated this concept for the first time in Value, Price, and Profit (1865), and extrapolated upon it further in the first edition of the first volume of Capital (1867). It signified an appreciable alteration to Marx’s original historical theory. Indeed, in his writings, preceding the publication of volume 1 of Capital, such as The Communist Manifesto or The German Ideology, Marx had presented a more straightforwardly linear conception of the evolution of human society, consisting of various stages, “capitalism” being the penultimate stage, and “communism”, the last. Within this framework, the most advanced nations, such as Great Britain and Germany, were assumed to be those closest to being on the pre-revolutionary cusp of realising socialism. However, from the publication of volume 1 of Capital onwards, Marx embraced a less deterministic conception of progress, focussing more than previously on economically backwards countries or societies “at the margins” (Anderson 2010 Anderson, Kevin D. 2010. Marx at the Margins. Chicago: University of Chicago Press.[Crossref] , [Google Scholar]) and envisaging for them possibilities for historical development that did not inevitably entail the sort of industrialisation that Great Britain had experienced. This was particularly true regarding Russia, where volume 1 of Capital was welcomed and discussed precisely in light of these questions, as has been underscored by many scholars, notably Shanin, Wada, White, and Stedman Jones.     

Disequilibrium as the origin,originality, and challenges of Clower's microfoundations of monetary theory

Abstract

Robert W. Clower's article “A Reconsideration of the Microfoundations of Monetary Theory” (1967) deeply influenced the course of modern monetary economics. On the one hand, it questioned Don Patinkin's (1956) project to integrate monetary and Walrasian value theory. On the other hand, it was the fountainhead of the cash-in-advance models à la Robert J. Lucas (1980), one of the most widely used approaches to monetary theory since the 1980s. Despite this influence, Clower's project to integrate monetary and value theory remains an enigma. My paper intends to resolve it. This is a difficult task since Clower never completed the monetary theory outlined in his 1967 article. To overcome this difficulty, I characterise the intellectual context from which Clower's contribution emerged and have recourse to a reconstruction of his project. This reconstruction is based on the analysis of published and unpublished materials, written by Clower before and after the 1967 article. It is argued that Clower sought to elaborate a disequilibrium monetary theory whilst retaining the two pillars of Patinkin's integration, i.e., the introduction of money into utility functions and the real-balance effect. I trace the origins, account for the originality, and discuss the challenges of this project.     

Say's involvement in the 1819 French edition of Ricardo's Principles and the issue of rent

This paper focuses on Say's contribution to the first French edition of Ricardo's Principles and on the analytical consequences of his involvement on the issue of rent. Part one investigates the “story” of this edition. It stresses Say's friendship with the translator, his involvement in this publication and his attitude toward Ricardo. Part two analyses how elements from Say's thought were introduced into Ricardo's theory of rent through this edition. These elements conveyed ideas which were definitely at odds with Ricardo's theory and misrepresented Ricardo's true concept of differential rent which was central to his theory.     

Listen Libertarians!: A Review of John Tomasi’s “Free Market Fairness”

John Tomasi’s 2012 book, Free Market Fairness, has been well received. On the dust jacket, Tyler Cowen proclaims it “one of the very best philosophical treatments of libertarian thought, ever” and Deirdre McCloskey calls it a “long and friendly conversation between Friedrich Hayek and John Rawls — a conversation which, astonishingly, reaches agreement.” The book does present an authoritative state of the debate across the spectrum from right libertarianism, on one end, to high liberalism (that shares some ideas with democratic socialism), on the other end. My point is not to question Tomasi’s own version of “market democracy” as a remix of Hayek and Rawls, but to use his sympathetic restatements of views across the liberal spectrum in order to show the basic misframings and common misunderstandings that cut across the liberal-libertarian viewpoints surveyed in the book. The heart of the debate is not in the answers to carefully framed questions, but in the framing itself.