The New Economics of Labor Migration: Beware of Neoclassicals Bearing Gifts

Abstract

Until the emergence of the New Economics of Labor Migration (NELM) in the 1980s, migration scholars were largely divided into two main theoretical camps, viz. the neoclassical and historical-structural approaches to migration. Against this background, the NELM presented itself as a theoretical ‘third way’ between the two latter approaches, and purported to reconcile agency and structure in a way previously unachieved by either of them. While those pretensions gained a fair amount of acceptance and popularity, this paper argues that they are fundamentally misleading, and that the NELM is little more than a slightly more sophisticated avatar of the neoclassical approach to migration, whose fundamental weaknesses it has not, and cannot, shed. This paper further argues that, in so doing, the NELM effectively constitutes migration theory's own instance of economics imperialism, i.e. the attempt to advance the fundamental tenets of neoclassical economics (methodological individualism and the assumption of optimizing rationality) within the context of the study and interpretation of various social phenomena. In order to put forth these arguments, this paper provides a summary presentation of the standard neoclassical theory of migration, the historical-structural heterodoxy and the NELM; highlights why it is that the NELM should be regarded as a ‘reworked’ version of the neoclassical theoretical framework and discusses its inception in the context of the ‘information-theoretic revolution’ in economics; and argues for a new and improved ‘historical-structural synthesis’ as a more satisfactory alternative to both the NELM and the standard neoclassical theory.     

Are Social Costs the Outcome of Struggles over Truth?

Abstract:

This article critically examines the institutional economics theory of social costs by way of reviewing The Dark Places of Business Enterprise: Reinstating Social Costs in Institutional-Economics (2019). In particular, the article assesses the proposal to re-root institutional economics in the theoretical synthesis of “Veblen-Kapp-Mirowski” to better understand the social costs of neoliberalism. One of the findings is that while such a synthesis seems justified on the grounds of significant commonalities and the merits of deeper insights, it nevertheless runs into difficulties due to divergent philosophical foundations. One of the conclusions is that further philosophic clarification is needed on how an alternative economy would understand the relationship between “social costs” and Truth.     

Not a man of solid principles. The relevance of Edgar Bauer’s polemical portrait of Karl Marx in his 1843 novella Es leben feste Grundsätze!

Abstract

The protagonist of Edgar Bauer’s 1843 novella Es leben feste Grundsätze! is a young intellectual named “Karl”. It can hardly be doubted that Bauer’s novella is a polemical character study of Karl Marx: the rather demeaning picture of “Herr Karl” belongs to the heat of controversy between Marx and die Freien, the Berlin Young Hegelians, after the end of their participation in the Rheinische Zeitung in late autumn 1842. So far, Bauer’s novella has never been used as a potential source to shed light on the deeper causes of animosity between Marx and die Freien.     

Scitovsky's The Joyless Economy and the economics of happiness

Abstract

Scitovsky's The Joyless Economy is especially well-known in recent economic studies on happiness. However, his insightful contributions have not been taken up as they deserve, mainly because they were, and still are, too original. By reconstructing Scitovsky's analysis on the basis of all his relevant writings, this article integrates his most original concepts, such as novelty, consumption skill, endogenous preferences, pleasurable uncertainty, into conventional economics; it compares Scitovsky's analysis to the economic thought of his time and to current consumer theory and it reveals his contributions to happiness economics, such as an original interpretation of the Easterlin paradox.     

Keynes on State and Economic Development

ABSTRACT

This article has two purposes. On the one hand, it develops Keynes’s concept of economic development. On the other hand, it presents Keynes’s ideas about the role of State, chiefly the State Agenda. Keynes believed that the stage of economic development would only be attained if the State Agenda was in practice. In turn, to Keynes the economic development would be a stage in which the economic problems of society have been surpassed, and the motto of the individual behavior has been changed from the love of money to the love of living.     

The changing face of mainstream economics

This article argues that economics is currently undergoing a fundamental shift in its method, away from neoclassical economics and into something new. Although that something new has not been fully developed, it is beginning to take form and is centered on dynamics, recursive methods and complexity theory. The foundation of this change is coming from economists who are doing cutting edge work and influencing mainstream economics. These economists are defining and laying the theoretical groundwork for the fundamental shift that is occurring in the economics profession.     

The ‘Americanisation’ of West German economics after the Second World War: Success,failure, or something completely different?

Abstract

The paper examines the intellectual and structural change that German economics experienced after the Second World War. This development often was described as ‘Americanisation’, since it seemed to rest upon the influences of the American occupation regime. In contrast, the paper applies another meaning of ‘Americanisation’. It is considered a ‘discourse’ that serves to structure the disciplinary procedures to produce progress. As it can be shown by the adoption of Keynesianism and neoclassical microeconomics, the change of the discipline was not primarily driven by direct American influences. Rather, in some respect the German reception took a path of its own. That contradiction can be solved by a theoretical modification of the classical concept of ‘Americanisation’. ‘Americanisation’ there meant a change of the operational procedure of German economics to generate progress.     

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.     

State-led humanitarian aid: Another case of “government failure”

A review essay on Christopher Coyne’s Doing Bad by Doing Good: Why Humanitarian Action Fails (Stanford: Stanford University Press, 2013). The book considers whether state-led humanitarian actions can be expected to succeed in reducing human suffering. Finding that as a rule they cannot be expected to do so, Coyne devotes the greater part of the book to an analysis of such programs in the light of the economic way of thinking, which in his approach blends public choice, basic applied price theory, Austrian economics, and the new institutional economics. He concludes that the best way to reduce human suffering in the long run is by promoting sustained economic development and that the best way to achieve such development is by adopting institutions that protect economic freedom.     

The neglect of comparison income: An historical perspective

Abstract

Theories of social comparison have a long presence in the social sciences and have provided many useful insights. In economics, the idea of comparison, aspiration or relative income belongs to this theoretical framework. The first systematic usages of this notion can be found in the works of Keynes and Duesenberry. After these works the concept was relatively ignored by orthodox theorists until its recent re-appearance, mainly in the fields of labour and macroeconomics. To the contrary, however, income comparisons continued to play a role in much of Keynesian inspired and non-mainstream economics literature. In the past few years it has made a strong comeback in the literature of job satisfaction and of the economics of happiness. This paper attempts to trace the development of the concept in the modern history of economic thought. It also discusses the main theoretical implications of adopting income comparisons and possible reasons for its relative disregard by orthodox economics.     

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.     

Natural resources in the theory of production: the Georgescu-Roegen/Daly versus Solow/Stiglitz controversy

Abstract

This paper provides a theoretical and methodological account of an important controversy between neoclassical resource economics and ecological economics from the early 1970s to the end of the 1990s. It shows that the assumption of unbounded resource productivity in the work of Solow and Stiglitz–and the related concepts of substitution and technical progress–rest on a model-based methodology. On the other hand, Georgescu-Roegen’s assumption of thermodynamic limits to production, later revived by Daly, comes from a methodology of interdisciplinary consistency. I conclude that neither side provided a definitive proof of its own claim because both face important conceptual issues.     

Philosophy of Economics Rules: introduction to the symposium

ABSTRACT

Economists have long been criticized for their use of highly idealized models. In Economics rules: Why economics works, when it fails, and how to tell the difference [Oxford: Oxford University Press, 2015] Dani Rodrik responds to this criticism by offering an account of models that emphasizes the diversity of models in economics. Rodrik’s account presents a rare opportunity for economists and philosophers of economics to engage in a mutually beneficial exchange that could improve our understanding of the power and limits of economics, and the rights and wrongs of the dismal science. The symposium on Rodrik’s Economics Rules is the first attempt to seize this opportunity.     

On the analogy between field experiments in economics and clinical trials in medicine

Randomized experiments, as developed by Esther Duflo and Abhijit Banerjee at the Abdul Latif Jameel Poverty Action Lab (J-PAL), offer a novel, evidence-based approach to fighting poverty. This approach is original, in that it imports the methodology of clinical trials for application in development economics. This paper examines the analogy between J-PAL’s field experiments in development economics and randomized controlled trials (RCTs) in medicine. RCTs and randomized field experiments are commonly treated as identical, but such treatment neglects some of the major distinguishing features that make each experiment specifically apt for use in its respective field. The central claim of this paper is that the analogy between medicine and development economics is incomplete because the central dimensions of RCTs are not simply different but altogether lacking in J-PAL’s approach. This weakens both the political and the theoretical power of such experiments in development economics.     

Agency through Development: Hausa Women's NGOs and CBOs in Kano,Nigeria

ABSTRACT

Analyzing the participation of Hausa women in religiously influenced nongovernmental organizations (NGOs) devoted to development work provides critical insights into the complex intersection of gender, religion, class, culture, and politics and economics. Based on interviews with leaders and employees of various NGOs, including community-based organizations (CBOs), in Kano, Nigeria, in 2010–11, this in-depth case study provides important examples of how various types of NGOs navigate political pressures when it comes to funding; it recognizes the understudied importance of women's labor contributions in the context of the development apparatus in Africa; it highlights the role of women as progenitors rather than benefactors of economic development; and it illustrates the unique role that faith-based organizations (FBOs) can and do play in terms of reaching certain marginalized segments of the population.     

Is Pragmatism Good for Anything? Towards a Theory of Impractical Economics

This article discusses the relationship between classical pragmatism, political economy and economic policy. Classical pragmatism is contrasted with vulgar meanings and uses of the term pragmatism. Classical pragmatism aims at a deep, substantive theoretical understanding of real-world economic systems and supports application of well-warranted claims to knowledge to improve the human condition. The article reviews the contributions of the founder of pragmatism, Charles Sanders Peirce, to the areas of ontology and epistemology as well as their further development by contemporary classical pragmatist philosopher Susan Haack. Hilary Putnam’s argument that we can have ethics without ontology and objectivity without objects is then critiqued. We need ethics based on an ontology that is rooted in actual human experience; this provides better guidance for evaluating policy proposals. The paper concludes by discussing the affinity of classical pragmatism with different approaches to political economy and policy.

Integration of and Deliveries among the World Zionist Organization,Israel, and Diaspora Countries: System Articulation with the Social Fabric Matrix

Abstract:

The religious economics (not economics of religion) concern here is the relationship between the World Zionist Organization (WZO) and Israel, which is known as a geopolitical power in its region and which is also known as an economic success story. Joseph Schumpeter and Karl Polanyi explained how the political economy of medieval Europe was influenced and guided by Christian morality. This paper extends the analysis of religious economics by using the social fabric matrix of original institutional economics to define and structure the integration of the WZO, Israel, and the Diaspora countries. This allows us to observe how to conduct such work and to learn how Israel is guided and influenced by the WZO. It also helps to explain Israel’s “risk of tearing itself apart” as noted in a recent article in the New York Times.     

Thorstein Veblen as Evolutionary Feminist Economist of the Progressive Era

Abstract

Just prior to the turn of the twentieth century, Thorstein Veblen advanced an evolutionary approach to feminist economics. A host of scholars considered in this inquiry are noted to have endorsed and also furthered his tradition. What distinguishes Veblen’s evolutionary approach to feminist economics is that he emphasizes that the roots of private property can be related to women being taken captive through warfare during the Age of Savagery. Instincts affecting behavior are viewed as relative constants, but which take on an evolutionary character when considered against what Veblen defines as four stages of social and economic development.     

Off the Record: Reconstructing Women's Labor Force Participation in the European Past

Abstract

Conventional histories of women's labor force participation in Europe conceptualize the trends in terms of a U-shaped pattern. This contribution draws on historical research to challenge such an account. First, it demonstrates that the trough in participation is in part statistically manufactured by uncritical reliance on official sources that systematically undercount women workers. Second, it exploits nonstandard sources to construct alternative estimates of women's participation. Third, it analyzes the reconstructed rates to determine their congruence with neoclassical economics and modern empirical studies. Not all posited relationships time travel. Supply-side factors such as marital status and number and age of children are major determinants of modern women's decision to enter the labor force, yet appear less prominent in historical contexts. Instead, the demand for labor seems decisive. Finally, the U-shaped curve is not entirely a statistical artifact, but appears to evolve at higher levels of participation than usually suggested.