The history of economics as economics?

Abstract

This paper critically evaluates the current decline of the relationship between economics and the history of economics, and proposes a framework called the panorama-cum-scenario model for the practice of the history of economics. Starting with the Hegelian thesis that the history of economics is economics itself, the paper argues that such a relationship is necessary but not sufficient because the history of economics is a metatheory addressed to economic theory. The history of economics needs a panoramic view of the subject and a scenario for the construction, interpretation, and evaluation of the system of economics. The panorama-cum-scenario model enables us to work on the history of economics not only by historical and rational reconstruction but also by global reconstruction. Nietzsche's anti-Hegelian viewpoint and Heidegger's hermeneutical standpoint are useful for identifying the role of historical research in developing economic knowledge based on the panorama-cum-scenario model. Several approaches to the history of economics are examined in light of the panorama-cum-scenario model. Schumpeter's history of economics is interpreted as an example of the panorama-cum-scenario model.     

Islamic economics versus market economics： The concept of taxations

Taxation plays a major role in both market economics and Islamic economics. The difference is that in market economics, the tax system has evolved throughout the centuries in order to address the constant change in market-based societies. In Islamic economics, however, the tax system bases on the writings of the Qur＇an and the principles of shariah. As a result, it did not flourish as the needs of Islamic society changed. Therefore, governments in Islamic countries that seek to follow Islamic law are facing major economic challenges. Recently, some Islamic scholars have asserted that Islamic governments can go beyond the explicit instructions of the Qur＇an and impose taxes as needed. They justify their arguments based on the interpretation of Qur＇anic verses. This paper briefly compares both rationality and the methods of taxation in both market economics and Islamic economics, and further elaborates on the shortcomings of the original Islamic tax laws.     

The basic theory of industrial ecological economics

There is a great difference between the new type industrialization road in China and the road of industrialization first, then informatization and at last ecologization in western developed countries. Industrial eco-economics is one of the critical branches of eco-economics. It is a subject of objective law of structural upgrading, functional optimization and highly efficient running of industrial eco-economic system, which is combined with industrial economic system and eco-system under the condition of intellectual economy and circular economy combinations. Meanwhile, it is a relatively weak subject in the research field of eco-economics in China for the time being. Taking the practice road of new type industrialization needs the guidance of industrial eco-economics. The modern industrial eco-economics in the 21st century must be adapted to the need of new type road of industrialization in China. The paper analyzes the status quo of research and the main contents of industrial eco-economics and tries to study some key theories of the branch subject.     

Flunking economics?

Economists are in revolt over President Clinton's health care reform proposal. Many contend that the Administration is abandoning free-market principles and embracing price controls that could have disastrous consequences. But others argue that traditional rules of supply and demand don't apply to the health care sector.     

A quantitative turn in the historiography of economics?

ABSTRACT

Quantitative approaches are not yet common among historians and methodologists of economics, although they are in the study of science by librarians, information scientists, sociologists, historians, and even economists. The main purpose of this essay is to reflect methodologically on the historiography of economics: is it witnessing a quantitative turn? Is such a turn desirable? We answer the first question by pointing out a ‘methodological moment’, in general, and a noticeable rise of quantitative studies among historians of economics during the past few years. To the second question, all contributors to this special issue bring relatively optimistic answers by highlighting the benefits of using quantitative methodologies as complements to the more traditional meta-analyses of both historians and methodologists of economics.     

Transforming economics into what? Heterodox economics and critical realism

The volume under review consists of comments on critical realismby heterodox economists. This paper addresses a number of themesfrom the book, e.g., history and reflexivity, sometimes expandingon the authors' comments on critical realism, other times respondingto them on behalf of critical realists. It considers the goalsof critical realism and ask to what extent the book furthersthem. It concludes that the high level of abstraction at whichcritical realism operates encourages those commenting on itto do so at a similarly high level of abstraction. As it stands,critical realism and the contributions to the book are too divorcedfrom the concerns of concrete economic theorising to be of greatuse to practising heterodox economists.     

Evolution and development,categories of Genovesi’s economics1

Abstract

Genovesi represents the highest point of two long-lasting streams of thought. One of them criticises the hostility towards the increase in consumption, of Aristotelian origin. The other, which had starts with Petty, distinguishes more and less productive labours with an empirical approach. In both cases Genovesi provides an evolutionary view of economic development which is based on two processes: the increase in consumption and comforts, on the one hand, and the increase of intellectual labour, on the other. Genovesi’s original and decisive contribution on these themes have been always neglected.     

Why culture in economics?

This article responds to the points raised by Deirdre McCloskey, Emily Chamlee-Wright, Rob Garnett and Solomon Stein in the symposium on my book Understanding the Culture of Markets (Routledge 2013).     

Can domestication of wildlife lead to conservation? The economics of tiger farming in China

Tigers are a threatened species that might soon disappear in the wild. Not only are tigers threatened by deteriorating and declining habitat, but poachers continue to kill tigers for traditional medicine, decoration pieces and so on. Although international trade in tiger products has been banned since 1987 and domestic trade within China since 1993, tigers continue to be poached and Chinese entrepreneurs have established tiger farms in anticipation of their demise. While China desires to permit sale of tiger products from captive-bred tigers, this is opposed on the grounds that it likely encourages illegal killing. Instead, wildlife conservationists lobby for more spending on anti-poaching and trade-ban enforcement. In this study, a mathematical bioeconomic model is used to investigate the issue. Simulation results indicate that, unless range states are characterized by institutions (rule of law and low corruption) similar to those found in the richest countries, reliance on enforcement alone is insufficient to guarantee survival of wild tigers. Likewise, even though conservation payments could protect wild tigers, the inability to enforce contracts militates against this. Our model indicates that wild tigers can be protected by permitting sale of products from tiger farms, although this likely requires the granting of an exclusive license to sellers. Finally, it is possible to tradeoff enforcement effort and sale of products from captive-bred animals, but such tradeoffs are worsened by deteriorating tiger habitat.     

The role of economics in global management of whales: re-forming or re-founding IWC?

The global management of whale species, identified as an economic mixed good, is addressed by means of economic theory of bargaining and institution making. I will analyse (i) why it is important to take into account explicitly both (consumptive) use and non-use values within international conventions on global mixed goods; (ii) the role and nature of institutions dealing with global issues; (iii) the role of bargaining between conflicting interests as a focal feature of the institution-making process; and, (iv) the role of economic thinking in international conventions. Co-operative and non co-operative solutions are discussed, and instruments aimed at achieving co-operative bargaining, analysed. The study has both positive and normative implications, with insights on social welfare enhancing institutional reforms. Although the study is broad yet special focus is given to the International Whaling Commission (IWC). This paper concludes that we should make economic theory operational within the realm of global institutions. On the basis of the bargaining model, the conclusion is that IWC should necessarily be re-founded or at least re-formed, changing the convention from ‘whaling’ to a ‘whale’. It is suggested that the possibility of introducing compensatory side payments into the bargaining arena in order to increase social welfare and enforceability with respect to a ‘ban’ scenario be investigated. Ethical implications of monetary compensations are considered in parallel with economic efficiency. The limits and potentialities of economics and economic instruments are also tested globally with respect to the whale and other environmental issues.     

Back to Buchanan? Explorations of welfare and subjectivism in behavioral economics

In light of behavioral findings regarding inconsistent individual decision-making, economists have begun to re-conceptualize the notion of welfare. One prominent account is the preference purification approach (PP), which attempts to reconstruct preferences from choice data based on a normative understanding of neoclassical rationality. Using Buchanan’s notion of creative choice, this paper criticizes PP’s epistemic, ontological, and psychological assumptions. It identifies PP as a static position that assumes the satisfaction of given ‘true preferences’ as the normative standard for welfare. However, following Buchanan, choice should be understood dynamically as a process whereby preferences constantly regenerate. Accordingly, the meaning of welfare emerges from an ongoing quest for individual self-constitution. If this holds true, then rationality axioms cannot serve as a priori normative standards. Instead, creative imagination and learning processes must remain central to any understanding of welfare in economics.     

Is the economics of time and ignorance a “classic”?

A history of economic thought perspective on The Economics of Time and Ignorance reveals that the book rehabilitates some major themes in the Austrian tradition that were all but lost subsequent to the formalist revolution in economics that took place in the middle of the twentieth-century. The book also anticipates some important ideas that were extended and applied in Austrian economics after it was first published. Reviews have claimed that the book was a “classic” and also “original”. The book is too close in a temporal sense to judge whether or not future generations will canonize it as a “classic”. Using Stigler’s criteria as to what constitutes scientific “originality”, it is concluded that, taken as a whole, the book was not original. From the vantage point of the overall discipline of economics, it was a work advancing controversial ideas that would not easily change the beliefs, practices and interests of economists in general but it offered sound reasons for taking the Austrian thought-trajectory more seriously. It would be more fitting to view the authors as providers of many innovations contributing to the mature Austrian economics of the twenty-first century.     

Moral philosophy and economics: the formation of François Huet's doctrine of property rights

François Huet (1814–1869), Professor of Philosophy at the University of Ghent, is known for his attempt to reconcile Christianity with socialism in Le Règne Social du Christianisme (1853). The book clearly belongs to a distinctively Belgian tradition of ‘liberal socialism’. Drawing upon archival material, we try to clarify the origins of Huet's theory of property rights. We focus on two intimately related questions: (1) Have the core ideas formulated by Huet in Le Règne been expressed and discussed before the publication of the book? (2) In what sense have reflections upon the science of economics contributed to Huet's views?     

Corporate social responsibility and the ‘game of catallaxy’: the perspective of constitutional economics

The paper examines the issue of corporate social responsibility (CSR) from the perspective of constitutional economics, focusing on the distinction between a political community’s constitutional choice of the rules of the “market game,” and the market players’ sub-constitutional choice of strategies within these rules. Three versions of CSR-demands are identified and discussed, a “soft,” a “hard”, and a “radical” version. The soft version is concerned with the issue of how “socially responsible” corporations ought to play the market game within existing rules. The hard version is about how the rules of the market ought to be changed in order to induce “socially responsible” corporate behavior. And the radical version questions the compatibility of CSR and the logic of the market game, calling in effect for adopting some alternative economic regime.

Austrian economics and development: The case of Sudha Shenoy’s analysis

The aim of this paper is to describe Sudha Shenoy’s use of Menger, Mises, and Hayek (she explicitly called them ‘the older Austrians’) to explain development and growth. Her aim was to show that the application of Austrian economics, based on the notions of capital structure and division of labor, embedded in a specific legal framework (common law), historically promoted development and growth (as in early modern England); and can promote development and growth in underdeveloped countries (her specific focus was India). Shenoy also claimed that any policymaking as well as government’s intervention are either useless or dangerous, having two main dysfunctional effects, which are often interrelated; namely, make development slower (or even stop it), and increase corruption.     

Are residual economic relationships normally distributed? Testing an assumption of neoclassical economics

In both theoretical and applied contexts, neoclassical economics typically assumes that residual economic relationships are mean-zero, finite-variance, normally distributed random variables. However, many have challenged this view, from various perspectives. The Austrian economists, specifically in the tradition of Mises and Rothbard, reject outright the effort to mathematically model human choices. This Austrian view is often derided as unscientific. However, some of the most mathematically sophisticated work in financial economics also rejects the orthodox bell curve. In this paper, we test Benoit Mandelbrot’s “stable Paretian” hypothesis on ten major macroeconomic data sets and reject the normal distribution in nine of them. We further argue that the stable Paretian hypothesis (and, more generally, the field of “chaos theory”) is far more compatible with the Austrian position than one might initially suspect.

Time for behavioral political economy? An analysis of articles in behavioral economics

This study analyzes leading research in behavioral economics to see whether it contains advocacy of paternalism and whether it addresses the potential cognitive limitations and biases of the policymakers who are going to implement paternalist policies. The findings reveal that 20.7% of the studied articles in behavioral economics propose paternalist policy action and that 95.5% of these do not contain any analysis of the cognitive ability of policymakers. This suggests that behavioral political economy, in which the analytical tools of behavioral economics are applied to political decision-makers as well, would offer a useful extension of the research program. Such an extension could be related to the concept of robust political economy, according to which the case for paternalism should be subjected to ??worst-case?? assumptions, such as policymakers being less than fully rational.     

The economics of “Certaine Lewd and Ill-Disposed Persons”: Comment on Leeson

In The Invisible Hook, Peter T. Leeson explores “the hidden economics of pirates.” The implications of his work are many, and there are several clear ways in which scholars can build on his insights. First, exploring piracy helps us better understand the rent-seeking societies of mercantilist Europe. Second, public and private policy toward pirates helps us better understand the institutions and organizations that emerge in order to govern and manage common resources. Third, the nearly universal condemnation of pirates by religious authorities and political leaders as well as the association of pirates with the demonic and satanic suggests further directions for research into the interactions between ideology, politics, and economic institutions.     

The evolution of IT innovations in Swedish organizations: a Darwinian critique of ‘Lamarckian’ institutional economics

Fundamental correspondence and analogies between the evolution of technological and biological innovations call for an ‘innovation Darwinian’, ‘universal Darwinian’ or ‘memetic’ approach to understanding technology innovation. Neo-institutional, in fact pseudo-Lamarckian evolutionary economic theory, represented by North, Nelson and Winter, Freeman and others, is criticized. Pseudo-Lamarckian (“by volition”) evolution is explained and analyzed on Darwinian grounds (as intentional and artificial selection), as is Schumpeter’s definitions of creative and imitative innovation. Data from a web survey among Swedish public and private organizations in 1999 are studied. Data show that Darwinian co-evolutionary interaction between producers and users or clients provide essential conditions and stronger influence on creative IT innovations than both ‘Lamarckian’ strategies and competition.