Vilfredo Pareto on Labor: A Critical Re-examination

This article comprehensively examines Vilfredo Pareto's thoughts on labor and highlights their significance within his body of work. Like the other pioneers in neoclassical economics, Pareto disregarded worker subjectivity toward labor performance and the resulting variability in the substance of labor. Thus emasculating the human traits of labor, in his theory of pure economics, Pareto identified the nature of labor exchange with that of the exchange of nonhuman objects, thereby subsuming the former under his general equilibrium system. This neoclassical principle of rationalizing the market determination of labor exchange on its deindividuation governed Pareto's speculations throughout his work. Even his arguments in applied economics in favor of worker solidarity and strikes were grounded on this principle. It remained the basis for Pareto's opinions on actual labor relations. Pareto's frustration here turned him into an anti-unionist, but it also helped to mold his prime ideas regarding sociology and his awareness of the limits of economics. However, Pareto's adherence to his former concept of labor exchange contradicting its nature became a chief cause of his failure to integrate his economic thinking with its sociological counterpart and occasioned his sympathy with Fascism. Thus, this article concludes that Pareto's thoughts on labor profoundly affected his entire body of thought and that their flaw is not exclusive to him but inherent in neoclassical economics.     

A reformulation of the foundations of welfare economics

Neoclassical welfare economics takes an outcome-oriented approach that uses Pareto optimality as its benchmark for welfare maximization. When one looks at the remarkable improvements in economic welfare that have characterized market economies, most of those improvements in welfare have been due to economic progress that has introduced new and improved goods and services into the economy, and innovations in production methods that have brought costs down, leading to higher real incomes. Pareto optimality is only peripherally related to actual economic welfare, and no economist would argue that people are materially better off today than a century ago because the economy is closer to Pareto optimality. After analyzing the actual factors that lead to improvements in welfare, this paper suggests a reformulation of the foundations of welfare economics to replace the almost irrelevant outcome-oriented concept of Pareto optimality as the benchmark for evaluating welfare with a process-oriented benchmark based on factors that generate economic progress. The paper then explores some implications of this reformulation.

Market failure vs. system failure as a rationale for economic policy? A critique from an evolutionary perspective

This paper reconsiders the explanation of economic policy from an evolutionary economics perspective. It contrasts the neoclassical equilibrium notions of market and government failure with the dominant evolutionary neo-Schumpeterian and Austrian-Hayekian perceptions. Based on this comparison, the paper criticizes the fact that neoclassical reasoning still prevails in non-equilibrium evolutionary economics when economic policy issues are examined. This is more than surprising, since proponents of evolutionary economics usually view their approach as incompatible with its neoclassical counterpart. In addition, it is shown that this “fallacy of failure thinking” even finds its continuation in the alternative concept of “system failure” with which some evolutionary economists try to explain and legitimate policy interventions in local, regional or national innovation systems. The paper argues that in order to prevent the otherwise fruitful and more realistic evolutionary approach from undermining its own criticism of neoclassical economics and to create a consistent as well as objective evolutionary policy framework, it is necessary to eliminate the equilibrium spirit. Finally, the paper delivers an alternative evolutionary explanation of economic policy which is able to overcome the theory-immanent contradiction of the hitherto evolutionary view on this subject.     

Sickonomics: Diagnoses and Remedies

In their recent analysis of the alleged decay in modern economics, Ben Fine and Dimitris Milonakis claim to find its source and origin in the “marginal revolution” of the 1870s. They argue that this development led to “methodological individualism” and the detachment of economics from society and history. I contest their account of the marginal revolution and of the role of Alfred Marshall among others. They also fail to provide an adequate definition of methodological individualism. I suggest that neoclassical economics adopted a denuded concept of the social rather than removing these factors entirely. No such removal is possible in principle. It is also mistaken to depict neoclassical economics as the science of prices and the market. In truth, neoclassical economics fails to capture the true nature of markets. I consider some sketch an alternative explanation of the sickness of modern economics, which focuses on institutional developments since World War II.     

Austrian economics and value judgments: a critical comparison with Neoclassical Economics

This article points out the limits of Austrian economics as far as the passage from positive to normative economics is concerned. We propose a comparison with neoclassical economics and discuss the different theoretical solutions adopted by these two schools of thought in their legitimization of the normative discourse. The bridge from positive to normative economics is analyzed as resting upon two interdependent pillars, one of a technical nature, the other of an ethical one. In neoclassical theory, these two pillars are, respectively, the Pareto principle and the so-called minimal benevolence principle. In the case of Austrian economics, they are the coordination principle and a set of value judgments considered to be ‘quasi-universal’. One problem for Austrian economics is that the coordination principle turns out to be incompatible with process analysis, the latter being a central tenet of the Austrian theory. A second problem, which creates serious difficulties for both schools, has to do with distribution. Our thesis is that whereas the neoclassical solution of the distributive problem is formally consistent (although deeply unrealistic), the Austrian solution is theoretically untenable and based on strong, although implicit, value judgments.     

Why Need is “A Word We Cannot Do Without” in Economics

Economists in the neoclassical tradition do their best to avoid using the word “need.” Social economists have traditionally been more open to discussions of need. Philosophic discussions of need are also scarce but nevertheless helpful. This essay will argue that need is “a word we cannot do without” in economics, and not only in social economics. Need is objective, satiable, and absolute, by contrast with want or preference as it is defined in neoclassical economics. With this clarification, 1) it is reasonable that public policy should consider need as well as want and aim to satisfy some needs, and 2) for some purposes, such as the economics of health care, conventional demand cannot be understood without the concept of need. Thus, even the narrower purposes of neoclassical economics cannot be achieved without clarifying and using the concept of need, in addition to the more usual motivational assumptions of neoclassical economics.     

A matter of opinion—How ecological and neoclassical environmental economists and think about sustainability and economics

The differing paradigms of ecological and neoclassical environmental economics have been described in various articles and books and are also embedded in different professional associations. However, we cannot take for granted that the paradigm debates described in the literature are actually mirrored in exactly the same way in the perceptions and opinions of researchers looking at sustainability from an economic perspective. This paper presents empirical results from a German case study on how economists and others involved in sustainability research from different schools of thought think about the issues of sustainability and economics, how they group around these issues, how they feel about the current scientific divide, and what they expect to be future topics of sustainability research.We analyze the data using cluster analysis. Based on a literature survey, we generated forty sustainability economics-related statements and asked 196 sustainability researchers about their degree of agreement or disagreement with these statements. In evaluating our survey results, we discuss to what extent the clusters that we identified do—or do not—represent the two schools of thought of ecological and neoclassical environmental economics. We also propose some fields of research that can help to bridge the gaps amongst sustainability economics researchers while clearly marking others that are more suitable for a scientific ‘competition of ideas’. Key results of the study are: We identify two primary scientific clusters, one clearly confirming the existence of the ecological-economics school of thought, and the other largely capturing the neoclassical environmental view. Yet, there are some surprising exceptions: Both schools of thought share a conceptual definition of sustainability that is integrative in considering ecological, societal and economic dimensions (‘three pillar concept’) and is geared at preserving the development potentials of society. We also find a shared critique of ‘pure economic growth’ strategies in our sample. These shared opinions may provide bridging concepts between the schools of thought. Also both clusters agree with respect to a wide range of future fields of sustainability economics research. Yet, the research agenda of the ecological-economics cluster contains a large number of additional topics, primarily related to social, distributional and evolutionary aspects of sustainable development. Strong divides between the clusters that seem to be more suitable for a scientific competition of ideas are primarily related to the question of how to achieve sustainability, including appropriate environmental policies.     

Bolivia’s Institutional Transformation: Contact Zones,Social Movements,and the Emergence of an Ethnic Class Consciousness

Over the past two decades, development economics has experienced a shift in focus from standard neoclassical analysis to institutions. While studying economic institutions is indeed important, evaluating their transformation and embeddedness is equally crucial for understanding and improving human wellbeing, especially in countries where market institutions are not fully developed. With that perspective in mind, we consider the importance of culture in the evolution of institutions in Bolivia by combining the concept of contact zones with old institutional economics (OIE). Contact zones refer to daily interactions in social spaces where culture and class meet and negotiate with each other. The contact zone between Bolivians and post-WWII development policies surfaced as an Andean collective memory, allowing for a possibility of social and political autonomy through the creation of an alternative to development, El Buen Vivir.     

Metaphors of Knowledge in Economics

"Knowledge" takes a central place in economics. This paper shows that the metaphor pervasively used in neoclassical economics to understand knowledge is that of "capital". Taking capital as a metaphor of knowledge introduces problems in neoclassical economic theory, as becomes apparent when economics addresses issues of learning and technological development. Instead, it is argued that economists could learn from what philosophers such as Gilbert Ryle and Michael Polanyi have said about how to understand knowledge.     

论人口、资源与环境经济学学科构架的理论基础

人口、资源与环境经济学是一门正在形成中的横跨生态学、经济学、社会学、战略学和法学的新兴学科。构建这一学科体系的理论基础是什么?人口、资源与环境之间及其经济运行过程是否具有内在的本质的联系?至今还未获得令人满意的答案。提出由物质本源论构建起人口、资源与环境经济学的广义物质变换理论基础;由社会发展构成要素论构建科学发展观的认识论基础;由广义经济学和人口、资源与环境之间的转换、循环、代谢与平衡理论构建人口、资源与环境经济学的学科理论体系的理论思路。试图揭示人口、资源与环境问题的实质,以期从根本上解决构建人口、资源与环境经济学学科的理论基石问题。     

Metabolic growth theory: market-share competition,learning uncertainty,and technology wavelets

Both exogenous and endogenous growth theories in neoclassical economics ignore the resource constraints and wavelike patterns in technology development. The logistic growth and species competition model in population dynamics provides an evolutionary framework of economic growth driven by technology wavelets in market-share competition. Learning by doing and knowledge accumulation ignores the interruptive nature of technology advancement. Creative destruction can be understood by using knowledge metabolism. Policies and institutions co-evolve during different stages of technology cycles. Division of labor is limited by the market extent, numbers of resources, and environment fluctuations. There is a trade-off between the stability and complexity of an ecological-industrial system. Diversified patterns in development strategy are shaped by culture and environment when facing learning uncertainty. The Western mode of division of labor is characterized by labor-saving and resource-intensive technology, while the Asian and Chinese modes feature resource-saving and labor-intensive technology. Nonlinear population dynamics provides a unified evolutionary theory from Smith, Malthus, to Schumpeter in economic growth and technology development.     

The new institutional economics and its relevance to social economics

There has been a quiet revolution in economic theory, led by the New Institutionalists. Pioneered by Douglass C. North, this group argues that institutions are the main determinants of economic performance, yet neoclassical economics has no role for institutions. Contrary to many misconceptions, this theory of institutions can be integrated with neoclassical economics, leaving mainstream economic theory in tact, but broader and more relevant. The purpose of this article is twofold. First, the main arguments of the New Institutionalists are summarized. Second, the bridge between institutions and social economics is explored. The article concludes by arguing that the New Institutional approach is fruitful, and that the theory will gradually be integrated with neoclassical economics, until the two merge into a single body of theory.     

新古典经济学在中国转型实验中的作用有限

“华盛顿共识”和“休克疗法”是新古典宏观经济学派反凯恩斯革命的新浪潮。他们否认大萧条的基本教训,无视历史的多样性和经济的复杂性。他们自上而下设计的自由化与私有化政策,导致苏东(前苏联和东欧)经济在过去十余年间的大幅下跌。中国和苏东转型实验的比较研究,促使我们重新检验经济学的基本问题,例如均衡学派与非均衡演化学派关于经济波动本质的争论。转型萧条的惨重代价,使我们加深理解新古典经济学的误区,例如价格的线性供求理论、预算软约束理论、宏观经济的微观基础理论,以及新制度经济学的趋同理论。中国基于学习、创新和分散试验的新经验,将使经济学超越均衡优化的古典规范,去探索非均衡演化的复杂经济学。     

Margaret G. Reid: Life and achievements

Feminist critics of mainstream economics, and of the neoclassical paradigm in particular, have focused primarily on exposing and questioning the gender biases and androcentric claims to neutrality, objectivity and rationality of the most male-dominated discipline among the social sciences. The scientific method and mathematical sophistry so cherished in the discipline have also come under severe attack from several quarters. However, despite the intellectual ferment and some practical gains for women that these criticisms have engendered, even today the substantial contributions several women scholars have made to the field of economics are not well known or fully acknowledged. This paper traces and highlights Margaret Reid's contributions to the development of some core theories in economics. While several of her male colleagues whose work she had inspired or contributed to have been awarded the Nobel Prize, the discipline of economics still owes a huge debt to Reid and to several other women economists.     

Post Keynesianism,Heterodoxy and Mainstream Economics

After briefly presenting the concepts of orthodox, mainstream and heterodox economics, and applying them to the contemporary period, this article discusses the Post Keynesian school and its relation to contemporary orthodox and mainstream economics. While opposed to the neoclassical orthodoxy, the Post Keynesian school has some positive unifying ideas, although some internal tensions remain. There are also some overlaps between Post Keynesianism and other approaches, and a careful combination of contributions from different approaches and different disciplines is not only possible, but also necessary. Post Keynesianism is located outside current mainstream economics, although this argument partly depends on a more precise specification of the concept of uncertainty. The non-mainstream character of Post Keynesian economics has at least two types of important implications. The first involves the approach's ability to influence the economy and the danger of ‘the scholastic fallacy’; the second refers to a reproductive difficulty inside academia.     

可持续发展：资源环境经济学与生态经济学的视角差异

资源环境经济学和生态经济学有不同的理论基础和研究方法,资源环境经济学运用新古典经济学的理论和方法来分析问题,生态经济学则通过多学科相关理论以及多元化方法取得研究进展。二者对于可持续发展也有不同的视角和追求,资源环境经济学强调经济增长,注重规模和效率,追求弱可持续性;而生态经济学强调发展,更重视分配和公平,追求强可持续性。深刻理解这些差异,对于经济学本身的完善以及经济发展模式选择都有重要的意义。     

创新型企业:概念、特征及其成长

基于Lazonick提出的"创新型企业"概念,解读了从新兴古典经济学视角下的"最优化企业"到创新经济学视角下的"创新型企业"的理论演化,详细剖析了学术意义上的创新型企业内涵。对创新型企业的成长进行了理论归纳和阐述,强调了创新型企业在价值系统、组织系统、技术系统和环境系统4个方面的动态演化及其成长过程。     

The behavioral foundations of Austrian economics

Behavioral and experimental economics present challenges to the neoclassical theory of individual behavior, which is based on individuals making choices within the framework of utility functions that are assumed to have certain well-defined characteristics. Results in behavioral and experimental economics have shown that it is common for individual behavior to systematically deviate from the neoclassical axioms of utility maximization. Austrian economics is also based on axiomatic theories of utility maximization, but the assumptions underlying utility-maximizing behavior are much weaker in the Austrian approach. As a result, they have more solid behavioral foundations and are less subject to challenge by the empirical findings of behavioral and experimental economics. Neoclassical policy conclusions are often overly strong because of its behavioral foundations which are challenged by behavioral and experimental economics and are often misleading because of the comparative static nature of neoclassical welfare economics. For purposes of policy analysis, the Austrian approach provides better insights because of its more realistic behavioral foundations.