The hypostasis of money: an economic point of view

The purpose of this article is to show that money is not anentity but hic et nunc a genuine mode of circulation associatedwith a genuine social organisation. Criticising money hypostasismay help to to: (i) elucidate the ambivalence of monetary relationsin our modern society (equivalence and subordination); (ii)criticise the idea that ‘primitive monies’ are nothingbut imperfect forms of our modern money and show that exoticsocieties are worth studying for themselves; and (iii) relativisethe knowledge we have about our societies and to develop comparativeanalysis. A sketchy comparison between wodani society and ourssuggests that an abduction relation exists between money andsociety.     

'Let your science be human': Hume's economic methodology

This essay examines David Hume's economic methodology. The authorcharacterises Hume's understanding of human actions as interactionism.Its key point is that interactions generate the disinterestedview of ‘the spectator’ in the human mind. Humeapplies this idea of the disinterested spectator to the positionof social scientists in understanding social phenomena. ThusHume's approach to social science can be regarded as interpretive.The author also points out the difference between Hume's methodin social science and historical study. Considering this difference,the author argues that we should refer to Hume's social theoryrather than historical works in order to understand his economicmethodology.     

Perceived trustworthiness and inter-firm governance: empirical evidence from the UK printing industry

The paper describes six representative theoretical positionsregarding the impact of trustworthiness on the organisationof inter-firm relations. The positions are then assessed onthe basis of a survey of 184 buyer–supplier relationshipsin the UK printing industry. The widely accepted transactioncost argument for trust as a parameter reducing hierarchy isdismissed. Instead, the so-called triadic forces argument basedon Bradach, J. L. and Eccles, R. G. (1989. Price, authorityand trust: from ideal types to plural forms, Annual Review ofSociology, vol. 15, 96–118) receives the strongest support.Market, hierarchy and trust represent alternative mechanismsthat can be combined in a variety of ways. This pluralisticmodel is enriched further by the acknowledgement of variableroles for contracts and a sceptic stance regarding rationalityin practice.     

Error or absurdity? A non-cognitive approach to commodity fetishism

Abstract

Karl Marx presented his theory of commodity fetishism as an explanation of the mysterious appearance of social relations in a system of commodity production as natural phenomena. The standard interpretation of this as a failure to perceive capitalist social relations correctly depends on a particular modern sense of ‘natural’. If classical political economy and Marx used ‘natural’ in the Aristotelian sense, commodity fetishism appears quite differently: not as a cognitive error but rather as a manner of living under commodity production, one that is not wrong but absurd, the word fetishism tying commodity production to pre-Enlightenment, preliterate peoples.     

EU Enlargement, Migration and the New Constitution

The paper deals with the effects of migration resulting fromEU Eastern enlargement on the welfare states of Western Europe.Although migration is good in principle, as it yields gainsfrom trade and specialization for all countries involved, itdoes so only if it meets with flexible labour markets and ifit is not artificially induced by gifts of the welfare state.This is not the present state of affairs in Western Europe.In addition to measures that make labour markets more flexible,the introduction of delayed integration of working migrantsand the home country principle for nonworking migrants is arational reaction of the state. The proposed new EU constitution,which contains far-reaching rules for a European social union,should be amended accordingly. (JEL E2, F2, H0, J3, J6)     

A materialist development of some recent contributions to the labour theory of value

The paper offers a novel interpretation and affirmation of theopening arguments of Capital, answering the fundamental butneglected question of why labour is the substance of value.Marx's arguments require that two philosophical threads, oftenseparated in the literature on value, be woven together. Theargument that value is the intrinsic ‘content’ makingcommodities exchangeable employs the thread of realism. Theargument that abstract labour is the emergent ‘socialsubstance’ of value employs the thread of dialectics.This interpretation develops the materialist and dialecticalphilosophy of E.V. Ilyenkov and deepens the approach to valuetheory initiated by Ben Fine.     

Rational drug design, the knowledge value chain and bioscience megacentres

This paper seeks to trace important shifts and cluster evolutionin the healthcare industry. Its key aim is to examine the implicationsof the rise of science-based clusters for economic geographyand related policies. A special focus is biosciences and therise of ‘biologics’ more generally at the expenseof fine chemistry in drug development. The old agglomerationsof pharmacy are no longer leaders in knowledge exploration,as universities, research laboratories and medical schools takeover research, they are beginning to lose prominence to dedicatedbiotechnology firms (DBFs) in knowledge examination, and retaintheir most important involvement as financiers and marketersof DBF exploitation knowledge. This has profound geographicalas well as industry organisation equilibrium effects. Over-concentrationof the bioscientific knowledge value chain has given rise tothe new spatial policy practice of developing regional sciencestrategies. Aspects of these are commented upon.     

Keynes's Z function, heterogeneous output and marginal productivity

Keynes was adamant that the assumption of homogeneous outputand capital in macroeconomic theory is inadmissable. His aggregatesupply or Z function is a generalisation of Marshall's ordinarysupply function to take account of heterogeneous output, andis an essential element of the principle of effective demand.The ‘linear Z curve’ controversy can be attributedto Keynes's desire to demonstrate how his general monetary theoryof value and output encompasses the special case of Classicaltheory, including the marginal productivity theorem. The infamoussecond footnote on pages 55–6 of The General Theory canthereby be fully resolved.     

Institutional individualism and institutional change: the search for a middle way mode of explanation

After noting the lack of enthusiasm of several well-known scholarsconcerning the adoption of both methodological holism and methodologicalindividualism in its several versions, this paper shows thatinstitutional individualism is a different mode of explanationfrom both of these and also that it is not the same thing asthe so-called Popperian programme of situational analysis. Institutionalindividualism is a mode of explanation that yields non-systemicand non-reductionist explanations at the same time as it allowsfor the incorporation into economic theories and models of themany formal and informal institutional aspects surrounding allhuman interactions, whether these interactions take place withinstable structures of legal rules and social norms or whetherthey attempt to change the said rules and norms. Finally, thepaper shows that it is possible for old institutionalists tomake institutional individualist analyses of institutional changeswhile retaining the remaining methodological assumptions ofthe school. The same is true for new institutionalists. Someexamples are offered from both camps.     

Time use, work and overlapping activities: evidence from Australia

The overlapping of activities is an important dimension of timeuse that has previously received little attention in economicanalysis. Most time-use studies have looked only at primaryactivities, ignoring the fact that individuals often performtwo or more activities simultaneously. This seriously underestimatesthe time spent on several economic activities such as childcareand housework which are also performed as secondary activities.Using a two-adult household sub-sample from the 1992 NationalAustralian Time Use Survey, this paper examines the incidenceand determinants of overlapping activities among 3,966 adultmale and female household members. It first shows that inclusionof overlapping activities in time-use measurements providesa better estimation of the economic contribution of individuals,especially in non-market production. Tobit models are then estimatedto examine the effects of economic, social and demographic factorson the incidence of overlapped work activity. The findings,which are found to be robust, showed that gender, householdlife cycle and composition, education, cultural norms, employmentstatus and level of income earnings influence the extent towhich individuals, particularly women, perform secondary workactivities. Conclusions are drawn in the final section of thepaper.     

Exchange and evolution

This paper offers an extension of the distinction of [Kohn, Cato Journal, 24:303–339 (2004)] between the two paradigms of modern economic theory—value and exchange—as derived from the generic–operant framework of [Dopfer and Potts, The general theory of economic evolution, Routledge, London, (2007)]. I argue that Austrian and evolutionary economics can be analytically unified about a general framework of rule coordination and change that I shall call the generic value paradigm. This is an analytic generalization of Kohn’s “exchange paradigm” that will allow us to redefine his conception of the “value paradigm” as the operational value paradigm in terms of the economics of known and fully exploited opportunities. The generic value paradigm, in turn, underpins the economics of the growth of knowledge and the evolution of the economic order as an open-system process due to the origination, adoption, and retention of novel generic rules. Austrian economics is then circumscribed as a special case of the more general “generic” analysis of the coordination and evolution of economic rules.      

On Sraffa's Standard commodity

The necessity of expressing the relative price of a commodityin terms of another commodity makes it impossible to distinguishthat part of any change that can be ascribed to the characteristicsof the commodity itself from the part of that change that isto be ascribed to the characteristics of the commodity of reference,i.e., the numéraire. Ricardo (1817) was the first topoint out this problem and the need to find an ‘invariablemeasure of value’, but he was not able to solve the problem.In 1960, Sraffa suggested using a bundle of commodities, thathe called ‘Standard commodity’, to accomplish thisfunction, claiming that it was a standard of value invariantwith respect to changes in the distribution of income. But inSraffa's book there is no explicit proof of this claim. Thisgave rise to many misunderstandings about the Standard commodityand its role as invariable measure of value. This paper proposesa proper definition of an ‘invariable measure of value’,and then proves that the Sraffa ‘Standard commodity’does fulfil the requirements of this definition.     

Labour employed in production and labour commanded: a Ricardian conjecture

This paper explains the origin of some important ambiguitiesin the analysis of value and prices put forward by Smith inhis Wealth of Nations by considering the possibility that theyreflect a previous draft of the book where the quantity of labouremployed in production was indicated as the sole determinantof real price and exchange ratios. This conjecture is evidencedindirectly by the way in which Smith presented his own analysisat the end of Book I, Chapter IV; by some passages containedin Book I and Book II which suggest that the quantity of labouremployed in production should play a crucial role within theanalysis of exchangeable value; and by the important modificationsintroduced by Smith in Book I, Chapter VI, after the first editionof the Wealth of Nations was published.     

Assessment of natural resources and the policy of subsidies in grain production

Based on the analysis on the status quo of natural resources input in Brain production and on the policy of Brain subsidies, this paper puts forward a new idea - establishing grain subsidies through assessing the value of the natural resources in Brain production. The assessment of the natural resources in Brain production provides rationale and reference standard for the policy of Brain subsidies, which will promote the sustainable use of natural resources accordingly. This paper concludes： （1） it is necessary for the grain subsidies to assess the full value of natural resources, including economic value, ecological value and social value： （2） the government should give farmers direct subsidies or environment subsidies according to the economic and ecological value of natural resources in grain production, （3） the social value of natural resources can be realized by establishing the country social security system, taking the social value as the criterion for the payment for part of farmers＇ insurance.     

Inter-capital relations and the network organisation: redefining the work and employment nexus

The blurring of organisational boundaries associated with ‘networks’of organisations suggests the need to reconsider how work andemployment are shaped by shifting inter-capital relations. Traditionaltheories of the internalised employment relationship understateits inter-relationship with both the form of inter-capitalistcompetition and the type of inter-capitalist production relations.Also, existing theories of inter-organisational contractingdo not adequately address how these are shaped by employmentrelations, both within and between organisations. An alternativeapproach provides a new perspective for considering forms ofcountervailing power to protect workers' interests in a capitalistsystem continuously shifting from integrated to non-integratedforms.     

Notes and comments. Cumulative causation, interrelatedness and the theory of economic growth: a reply to Argyrous and Toner

In responding to the comments of George Argyrous and PhillipToner, this reply focuses on four areas of contention betweenmyself and my critics. First, it is suggested that my originalmodel places more weight on the growth-enhancing characteristicsof increasing specialisation in production than either Argyrousor Toner acknowledge. Secondly, it is demonstrated that both'formal' and 'verbal' models of cumulative growth typicallyplace unwarranted emphasis on the importance of initial conditions.Thirdly, the evolutionary properties of my original model aredefended against the claim that lock-in renders it mechanicaland deterministic. Finally, it is argued that mathematicallymodelling open but structured social processes (such as economicgrowth) should not be rejected as redundant in principle.     

Harmonisation of Old-age Security Within the European Union

Not sufficiently harmonised national pension systems withinthe European Union distort the allocation of labour and endangerredistributive activities. This paper identifies the most decentralisedlevel of harmonisation which guarantees efficient allocationand enables redistribution. For this, we build on theoreticalresults from the literature to evaluate the realised distributionof the legal power between the European Union and the MemberStates and the resulting level of harmonisation. We find thatharmonisation is sub-optimally low. Binding rules guaranteedby the European Union are needed implying that the Member Stateshave to concede more fundamental responsibilities to the EuropeanUnion. (JEL F22, H55, K33, N34)     

The stock market and investment: another look at the micro-foundations of q theory

This paper introduces a novel distinction between real q andfinancial q. The paper examines three versions of financialq developed by Brainard and Tobin, Minsky and Hayashi, respectively.These theories differ regarding the nature of stock market pricedetermination and their use of marginal productivity theory.It is shown that non-profit maximising behaviour by managersdoes not invalidate q theory. It is also shown that if managersand shareholders have different profit expectations, this leadsto an equilibrium value of q that differs from unity. Lastly,the implicit claims in q theory regarding the efficient roleof stock markets as regulators of capital accumulation are shownto depend on assumptions about stockholder behaviour.