New Frontiers of Profit and Risk: The Fourth Industrial Revolution’s Impact on Business and Human Rights

ABSTRACT

The Fourth Industrial Revolution, characterised by the fusion of physical, digital, and biological technologies, will have profound social and economic consequences. But what impact will it have on human rights? This article critically interrogates key writings and speeches about the Fourth Industrial Revolution, which requires reading between the lines of technical, business, and policy-orientated materials that rarely address human rights explicitly. The findings are a mix of good and bad news. First, the traditional linkage between economic competition and violations of bodily integrity is weakening as new forms of profitability in tomorrow’s digital ecosystems require empowered and creative individuals. However, these celebratory visions of the profitable interpenetration of our bodies, hardware and virtual worlds has a dark side. The next-generation of human rights violations arising from transnational business activities will be increasingly subtle, diffuse, and sophisticated.     

Economic Calculation: Private Property or Several Control?

Abstract

As the centenary of the 1917 Russian revolution approaches, it is worth reviewing the past 100 years’ discussion amongst economists on the possibility—or otherwise—of economic planning under socialism. The socialist calculation debate is of fundamental importance, not merely as a specialist application of economic ideas, but as an investigation of the foundations of economic activity. Every economic action is premised upon calculation, every choice depends upon an assessment of the costs and benefits of each alternative between which the agent must choose. The view of that choice and its attendant calculation is constitutive of the schools of thought—Marxian, neoclassical and Austrian—which have contributed to the debate. An understanding of the calculation debate is therefore required to understand how these paradigms stand in relation to each other. This article addresses one aspect of that debate—the claim by Austrian economists that socialism is impossible because the absence of private property in the means of production precludes economic calculation. The article suggests that several control rather than private property is required for economic calculation, and that several control is consistent with public ownership of the means of production. The Austrian argument on this point, therefore, is without force.     

The neglect of replacement investment in keynesian economics

Abstract

This article describes Keynes's early analysis of replacement investment and his subsequent neglect of the subject, especially by his followers. It goes on to explain how this deficiency helped to mislead later economists who attempted to use Keynes as a guide for economic policy and theory and the consequences of the errors of these economists.     

The “Treasury View”: An (un-)expected return?

Abstract

By examining the rhetorical use of an old piece of economic theory by some contemporary economists, this paper intends to report on “how today's economists conduct a public policy debate”. This paper is neither a scholarly history of the interwar debate nor a sophisticated critique of current economic policy. It is an attempt to link the policy and theoretical arguments of two similar debates separated by nearly 80 years. The second part of the paper demonstrates that the (un-)expected return of the Treasury View is a case study illustrating two very different modelling strategies.     

The last generalists

Abstract

The general trend of research specialisation in economics has contributed to the marginalisation of the history of economic thought. However, it has also led to a state of fragmentation in the profession and thereby increased the costs of neglecting the history of economic thought. This paper argues that historians of thought can help to counteract fragmentation because they are special generalists that fulfil multiple functions, for example, in the education of economists, the detection of blind spots in modern theories and the identification of routes for innovation by backtracking.     

The Institutional Revelation: A comment on Douglas W. Allen’s The Institutional Revolution

Institutions are a central topic in economic history. Allen’s work differs in that he is interested in institutions per se, not as a means to economic performance and prosperity. The purpose of this book is to explain the institutions of the premodern world and to show why they changed. His argument is that in a Principal-Agent situation, before the Industrial Revolution, it was harder for the Principal to attribute whether the failure of the project was due to acts of nature or some acts of the agent, hence the “strange” institutions. In a modern world, with a much improved monitoring technology, we can use more “efficient” institutions, hence the Institutional Revolution. Although innovative and interesting, the author over-stresses his argument. Much more than monitoring in a principal-agent relationship is needed to explain the Industrial Revolution and the changes in institutions associated with it.     

A comparison between qualitative and quantitative histories: the example of the efficient market hypothesis

ABSTRACT

This paper uses the example of the history of the efficient market hypothesis (EMH) and citation analysis in order to investigate some differences between qualitative history and a quantitative history. The history of the EMH provides a telling example of the way quantitative analyses can supply different perspectives on the qualitative history of this hypothesis or complement it. For instance, since the EMH was proposed, several criticisms emerged. In addition, the definition and the scope of this hypothesis have been modified several times. Although the qualitative history of the EMH refers to these criticisms and these alternative definitions and scopes, qualitative tools cannot provide a clear measure of the impact of these criticisms and these modifications among economists. By studying the dissemination of the EMH, its major criticisms, and the answers economists provided, citation analysis sheds a different light on the history of the EMH.     

Balkanization and assimilation: Examining the effects of state-created homogeneity

Charles Dickens was a reformer who sought to reform economic conditions. Convinced that the reforms proposed by the economists of his day would not benefit those victimized by the Industrial Revolution, he also sought to reform economics. Dickens' prime targets were McCulloch, Malthus, and Nassau Senior. Reviewing Dickens's efforts at social reform, Chesterton made the distinction between pessimistic reformers, who describe how bad people are under bad conditions, and optimistic reformers, who describes how good people are under bad conditions. The author draws similar parallels between mainstream economists and social economists.     

From economic stability to social order: The debate about business cycle theory in the 1920s and its relevance for the development of theories of social order by Lowe,Hayek and Eucken∗

Abstract

The concepts of Adolph Lowe, Friedrich A. Hayek and Walter Eucken play an important role in the discussion of an adequate theory of economic and social order. It is noteworthy that at the beginning of their academic careers, these three economists dealt primarily with questions of business cycle theory. As we will show, this is not coincidental, but can be explained by economic history and the history of theory. Furthermore, all three economists agree that establishing a comprehensive social order would provide the basis for economic stability, although each postulates a different relationship between liberty and order.     

‘Catholic in its faith,Catholic in its manner of conceiving science’: French Catholic political economy in the 1830s

Abstract

This paper addresses a group of Catholic political economists in France in the 1830s, which was described by the Dublin Review as ‘Catholic in its faith, and Catholic in its manner of conceiving science’. A first section clarifies how contemporaries perceived this group. This is followed by an analysis of Villeneuve-Bargemont's Economie politique Chrétienne in order to outline a standard Catholic approach to political economy. Finally, that standard is used to chart the work of other Catholic economists within that group and to contrast it with the approach followed by other contemporary social political economists.     

The Italian approach to the theory of public goods *

Abstract

The subject of needs is the centre of attention of Italian public finance scholars. The financial activity of the State is justified by the existence of collective or public needs to whose satisfaction collective or public goods and services are linked. Italian economists have studied the problems of public goods in a general context, taking into consideration concurrently both taxes and public expenditure and giving prominence to positive analysis. Italian theorists have always been far removed from the classical approach, which denies the productivity of public services, and have deemed it necessary to take into account the political context in which fiscal structures operate. Their models include the State as a major factor. Herein lies the main value of the Italian tradition in public finance, which puts in coercion into the market mechanism via State intervention.     

Calls for change. The scientific status of economic theory and the future of democracy: A review of three recent contributions

Abstract

After the last financial crisis, economic theory and economists have largely lost their credibility. Not having been able to foresee and explain the recession, they have clearly shown that a deep methodological reform of the discipline is necessary. With its restrictive assumptions and the self-referentiality of formal models, mainstream economics has indeed become highly unrealistic and therefore unable to face the deep and evident problems of capitalistic society. The books reviewed in this paper try to criticize economic theory from three closely related points of view: the technical drift that has endangered democracy and annulled the role of citizens in public choices, the sometimes obscure role of economists and the way through which articles of low scientific relevance are published, and finally the decisive role of the Nobel Prize in economics to legitimize the market turn begun in the 1970s. Considering such a discouraging picture, it is necessary to ask whether there is still hope for reforming economics and if, possibly returning to the classics of economic thought, it is still possible to carry out a struggle based on ideas and not on dogmatic prejudices.     

Mill versus Jevons on traditional sexual division of labour: Is gender equality efficient?

Abstract

The question of the legitimacy of traditional sexual division of labour receives growing attention from contemporary economists. In particular, a debate takes place between the “New Home Economics”, which stresses the efficiency of the traditional arrangement and economists questioning the justice of the relations between sexes. The same kind of opposition appears between two Victorian economists: J.S. Mill and W.S. Jevons. Although both are utilitarian, they adopt contrary views about the relative importance of efficiency and justice in the definition of appropriate gender relations. While Mill aims at conciliating justice and utility, Jevons considers that utility outweighs justice.     

The Italian contribution to early economic dynamics

Abstract

Contrary to the prevailing literature, the study of economic dynamics began at the end of the nineteenth century, at least four decades before Hayek's and Samuelson's essays on dynamic equilibrium, as Pareto's dynamic insights prove. Throughout this early phase of the discipline, economists interested in dynamic studies put forward a wide spectrum of suggestions. This paper investigates the lines of research that sprang from the Italian debate either according to or in opposition to the Paretian mechanistic legacy, aiming to show that a growing awareness of subjective variables’ role weakened the mechanistic faith of the strictly Paretian followers, pushing them toward probabilistic analysis, anchoring dynamics to uncertainty and disequilibrium.     

Response to Buchanan

During the 1930s and early 1940s, the problems of economic dirigisme and its theoretical analysis attracted the attention of Bulgarian economists. To some extent, it was compensation for the fact that they missed the socialist calculation debate of the interwar period. Their analyses were placed within the framework of a demand and supply core, combined with various other theoretical approaches. The Bulgarian academic economists identified a number of problems associated with the long-term functioning of the regulated economy: impossibility of the state apparatus to control spontaneous market forces by means of governmental regulation, inherent administrative constraints for government and public officials to introduce and control strict and conscientious implementation of all the laws and normative acts of the system of economic dirigisme, etcetera. A new theory of international trade was developed, the author of which attempted to break away from the old-fashioned labor theory of value. The main content of his concept lies in the claim that protectionism, in certain cases, may have positive economic consequences.     

Rigor in Economics means Pluralism

Abstract

The two books under review could not be more different in terms of their main subject matter and writing style, but their central message is exactly the same: only a pluralist economics is scientifically rigorous and explanatorily honest and fruitful. Both books underpin this important point in their own ways. While Fullbrook draws on a wide range of history of thought in economics, philosophy and the sciences, his epistemological argument is relatively easy to grasp and full of catch phrases. Marchionatti and Cedrini on the other hand review the century long methodological dispute between economists and economic anthropologists. Their treatment of these debates is very detailed. So, it can be a bit of a struggle at times to follow the intricacies of the defensive arguments used by anthropologists in their battles against imperial attacks by economists. However, by providing an outline of the basic arguments at the start and a concluding summary at the end of most of their chapters the authors make these debates very comprehensive while offering a very thorough historical comparative overview of economic imperialism and the defences of its anthropological opponents. In critiquing its philosophical foundation, Fullbrook argues convincingly that the mainstream narrative in economics is ideologically biased and conceptually too narrow to investigate economic behaviour based on social bonds, inter-subjectivity and real freedom. To allow for such analysis, he concludes, we will need to move towards true pluralism of methods in economics.     

The institutional approach to economic history: Connecting the two strands

This essay examines the historiography of two episodes in history—the scattering of plots in the open fields in the Middle Ages and the transition to the factory system in the Industrial Revolution—to shed light on the uses of institutional economics in economic history. In both of these episodes, economic “just-so” stories advanced our understanding of history. What animated intellectual innovation in both cases was a bold conjecture about the raison d’être of a puzzling institutional structure. But what ultimately enriched our understanding was the process of conjecture and revision those conjectures set off. In both episodes, the revised conjectures that best withstood criticism and revision were those that saw the phenomena not as static snapshots of economic agents confronting an economic problem but rather those that embedded the phenomena within a larger economic problem and within a process of economic change. In the end it is an account of institutional change—what I call the good old New Institutional Economics—that connects the use of institutional economics to explain puzzling historical phenomenon with the role of institutional economics in addressing the big questions of economic growth.     

Strategic Distortion of the Objectives of Trade Policy

Abstract

By employing a simple three-country model in which there are two exporting countries and one consuming country, this paper analyses the consequences of one-country strategic distortion of the objectives of trade policy. It finds that although an exporting country can benefit from strategic distortion, it would be preferred that the importing country distorts its policy. Furthermore, it is found that preferential trading agreements can emerge endogenously.     

Five reasons for the use of network analysis in the history of economics

ABSTRACT

Network analysis is increasingly appreciated as a methodology in the social sciences. In recent years, it is also receiving attention among historians of science. History of economics is no exception in that researchers have begun to use network analysis to study a variety of topics, including collaborations and interactions in scientific communities, the spread of economic theories within and across fields, or the formation of new specialties in the discipline of economics. Against this backdrop, a debate is emerging about how network analysis can help address questions that are pertinent to the history of economics. With this paper, we want to push this debate one step forward by offering and discussing five reasons why network analysis should have a future in the history of economics.