Index Volume VIII – 1974

This article, written in the first days of the Bush Administration, is part of what will no doubt be a flood of “end of term” assessments of the Reagan era. Much of this work, naturally enough, will be concerned with evaluating the economic record of that administration and discussing the economic legacy inherited by George Bush. This article, however, is a rather different endeavor; it is an attempt by two observers from across the Atlantic to explain the triumph in the United States of supply-side ideas.     

解决中国当前宏观经济低迷状况的对策分析——基于里根经济学的认识

中国的宏观经济呈现出通胀压力与失业形势并存的滞胀现象,与20世纪80年代美国的经济状况极为相似。借鉴里根经济学的合理之处,建议通过减低税收、采取放宽融资等扶持中小企业的政策、鼓励科技创新以及改善教育体系等对策,促进中国经济的复苏。     

Minutes of Spring Council Meeting, 1966, of the Catholic Economic Association

Alongside neo-classical supply-side analysis, there was the emergence in the 1980s of a new strand of anlysis seeking to develop a social-institutional perspective on the supply-side of modern industrial economies. This paper contrasts the views of labor market ‘flexibility’ provided by neo-classical analysts and supporters of deregulation with those of the Flexible Specialization and Diversified Quality Production theorists and assesses the strengths and weaknesses of Flexible Specialization in comparison to its main ‘institutionalist’ rival. It concludes that the anlysis of ‘supply-side institutionalism’ and the evidence provided by important empirically based studies, suggests that public policy directed towards: optimizing job training, promoting employee participation and inter-firm co-operation, and restricting the ability of firms to indulge in short-termism will be most productive in promoting the cause of socially progressive industrial production and ‘goodwork’.     

Bound by Gravity or Living in a ‘Post Geography Trading World’?* Expert Knowledge and Affective Spatial Imaginaries in the Construction of the UK’s Post-Brexit Trade Policy

A key battle has been fought within the UK cabinet on the direction of post-Brexit trade policy. The opposing sides have favoured either continued alignment or a ‘hard’ break with the European Union’s (EU’s) regulatory and customs regime, in the latter case to allow the UK to pursue an independent and ambitious trade policy agenda. Contrary to much commentary on ‘post-truth’ politics, both sides have relied on rival forms of expertise to support their claims. I argue for the need to not only re-emphasise the malleability and political nature of expert knowledge, but also appreciate its emotional bases. The Treasury has led the charge in favour of a softer Brexit by drawing on econometric (‘gravity’) models that emphasise the economic costs of looser association with the EU. In contrast to this attempt at technocratic legitimation, the specific legal expertise drawn upon by cabinet advocates of ‘hard’ Brexit has appealed to an emotive political economy of bringing the UK, and its (in this imaginary) overly regulated economy, closer to its ‘kith and kin’ in the Anglosphere, deepening the UK ‘national business model’. I conclude by calling for more explicitly emotive and values-based argumentation in the public debate on the UK’s future trade policy to improve the quality of democratic deliberation.     

Karl Polanyi on economy and society: a critical analysis of core concepts

The Review of Social Economy was founded to highlight the irreducible social aspects of economic activity. Yet, the nature of the ‘social’ and the ‘economic’ are both unresolved, and they are much more problematic than often assumed. This article probes Karl Polanyi’s depiction of the relationship between the ‘social’ and the ‘economic’ and subsequent discourse on ‘embeddedness’. In his Great Transformation (1944) Polanyi associated the ‘economic’ with motives of material gain, while ‘social’ referred to norms of reciprocity and redistribution: his distinction between the ‘social’ and the ‘economic’ then focused primarily on different kinds of motivation. But in a 1957 essay he brought in different kinds of institutions that engender different types of motivation. Polanyi (1944) argued that after 1800 Britain was transformed into a market-oriented ‘economic’ system, based on motives of greed and material gain. He also proposed that an effective market system had to be ‘self-adjusting’ and free of political interference, despite his important additional claim that the state was involved in its creation. Some of Polanyi’s core concepts and arguments are contradictory and problematic, and need to be reconsidered, especially if his enduring insights are to be salvaged.     

Housing as a wage and luxury good: absolute poverty and the distribution of income in supply-side economics

A fundamental tenet of supply-side economics is the ‘trickle-down’ effect, according to which a redistribution of income shares to those with higher incomes is supposed to result in sufficient income growth to make everyone better off. Apart from the inherent improbability of such an outcome, it is possible to argue that such a redistribution causes scarce resources to be transferred to luxury goods production, reducing the supply of the wage goods commodities in whose production those resources are used. The reduced availability of such commodities can give rise to an increase in absolute poverty (defined as the inability to afford basic necessities). This increase in absolute poverty forms a ‘threshold’ which must be more than balanced by an increase in real income due to the supply-side acceleration of economic growth before the ‘trickle-down’ effect may be said to have been realized. Some evidence from the UK is provided, together with a note on how this poverty mechanism affects the calculation of the retail Prices index.     

How Rousseau read Hume’s Political Discourses: hints of unexpected agreement in their views of money and luxury

Despite mounting scholarship on the Rousseau–Smith connection, the possibility of overlap between the Humean and Rousseauian views of commercial society has not been explored. This is due to opposing views held by these two thinkers on this issue. However, Rousseau in the Confessions recorded a brief, but shrewd impressions on Hume’s Political Discourses, which he held before meeting Hume. In these comments, Rousseau, unlike his other French contemporaries, noted some republican aspects lurking in Hume’s political and economic essays. Moreover, after his two Discourses, Rousseau composed several other important works in which he revealed his more ‘mature’ economic arguments. Careful readings of these textual clues indicate that, in striking parallel with Hume, Rousseau conducts a thought experiment on the drastic change in the quantity of money and elaborates on the significance of industry and a certain type of luxury. Our purpose here is not to prove that Hume’s Political Discourses directly influenced Rousseau’s later writings, but to measure the extent to which Rousseau could share the Scot’s economic ideas by considering that the former may well have read the latter.     

Foucault on the Marginal Revolution in Economics: Language and the Cartesian Legacy

Scholars have long debated the ‘revolutionary’ character of the ‘Marginal Revolution’ in economics, focusing on theoretical foundations, methodological devices, social context and political aspects. This article offers a new perspective by investigating ontological and epistemological conditions of that intellectual movement. This requires, in turn, a characterization of those conditions, for which purpose we will draw on Foucault's configurations of thought into ‘epistemes’ in The Order of Things. Although not mentioning those conditions, there have been few references in economics to Foucault's approach. They have mainly claimed that he neglected its importance because he did not see it as a ‘revolution’ in The Order of Things. It is argued here that he actually considered it a ‘revolution’ in The Archaeology of Knowledge. A revision of Foucault's account provides some ideas regarding deep philosophical conditions of the emergence of neoclassical theory and defies some usual interpretations of the circumstances that led to the mathematization of economics. The main conclusion is that its revolutionary character did not stem from a change of ontological beliefs, but—just as many historians of economics have defended—it was a methodological revolution. This study suggests a reinterpretation of that event, claiming that it resulted from a new conception of language and a crisis of Descartes's project of a mathematical unifying science. Going beyond that debate, these reflections proffer ideas that deserve an appraisal in economics.     

From profit margins to income distribution: Joan Robinson's odyssey from marginal productivity theory

The point of departure for this paper is a 1941 Note on profit margins co-authored by Joan Robinson and Nicholas Kaldor that remained unpublished until 2000. Robinson's reviews of Henry Clay's The Problem of Industrial Relationships, Bresciani Turroni's The Economics of Inflation, and Roy Harrod's Towards a Dynamic Economics, along with her 1965 Cambridge Inaugural Lecture, may be interpreted as analogous documents that develop her critique of neoclassical wage theory and identify the money wage as the economy's ‘key’ price. These publications were critical steps toward the wage mark-up hypothesis and Post-Keynesian support of incomes policy to contain inflation. Robinson's Harrod review anticipated her later ideas about economic growth. With Kalecki's notion of ‘the degree of monopoly’ and her own concept of neo-mercantilism (from the Inaugural Lecture), these themes are nascent in the Robinson–Kaldor Note on profit margins.     

What Have We Learned from the Global Financial Crisis?

According to the policy ideas that have dominated the policy debate since the 1970s, the Global Financial Crisis and the subsequent slump in the United States and Europe should never have happened. The crisis provided sufficient evidence to reject the Efficient Markets Hypothesis, along with the dominant models in academic macroeconomics and policy claims such as the ‘trickle‐down’ hypothesis and the case for comprehensive privatisation. In reality, few of these lessons have been learned and much of the policy response to the crisis has been irrelevant or counter‐productive. As a result, we have learned some unflattering lessons about the economics profession, including policy‐makers, commentators, central bankers and academic economists.     

The making of Beveridge's Unemployment (1909): three concepts blended

The aim of this paper is to re-examine William Henry Beveridge's (1879?–?1963) early ideas on unemployment. After developing through three phases (‘from the unemployable to the unemployed’, ‘from the unemployed to unemployment’, and ‘perfection of the labour market’), Beveridge finally accomplished a coherent package of remedies for unemployment: labour exchanges with National Insurance on the basis of the living wage principle (previously unexplored but evident through his work). These three concepts, perfectly blended, formed his original and unique standpoint. By analysing this development of ideas, we can position Beveridge's doctrine of unemployment more appropriately in the history of economic thought.     

Party Politics and the Political Economy of Ghana’s Oil

Ghana’s status as a new oil producer raises questions about the developmental effects of resources, and the role of political institutions in these processes. The conundrum this paper addresses is the rather limited impact of oil exploitation in Ghana despite the country’s strong democratic record and internationally acclaimed oil governance legislation. The reasons for this lie in the nature of elite-based political coalitions and we root our analysis of Ghana’s hydrocarbons in the political settlements literature, which moves us beyond the ‘good governance’ approaches so often linked to ‘resource curse’ thinking. We also move beyond the instrumentalism of political settlements theory to examine the role political ideas play in shaping resource governance. We argue that inter-coalitional rivalry has generally undermined the benefits of Ghana’s oil but that a crude interests-based interpretation is insufficient to explain differences between these coalitions.     

The visual history of the Tableau Économique

This article looks at the history of the Tableau Économique from a visual point of view. It shows that Quesnay invented the Tableau to formalize visually his economic theory, and that he used different versions of the Tableau (‘Zigzag’, ‘Précis’ and ‘Formule’) for reasons of visual rhetorics. Accordingly, the visual history of the Tableau clarifies several problems identified by previous ‘ecommentors’. The paper concludes that the history of the Tableau as an image cannot be equated with that of Quesnay's abstract economic model without missing the Tableau Économique's raison d'être.     

The Stagnation Tendencies of Neoliberalism: A Review Essay

In his 2012 book, From Financial Crisis to Stagnation, Thomas Palley argued that the financial crisis of 2008 would be likely to result in a period of long-term stagnation. Both the crisis and the predicted stagnation, Palley argued, were the outcomes of policies pursued since the 1980s; the persistence of those policies explains the stagnation. Underpinning the policies and their consequences are the flaws of the neoliberal macro model and the particular role played by finance in that model. The rejection of Keynesianism meant the abandonment of the commitment to full employment. The neoliberal paradigm rests upon a foundation of ‘bad ideas’ that are located in political philosophy as much as in economic theory. Palley’s argument has a bearing on recent discussions among mainstream macroeconomists, whose interest in secular stagnation has been revived by the ‘ongoing crisis’. These discussions have left mostly unanswered the question of the causes of stagnation. The present essay argues that Palley’s concept of ‘structural Keynesianism’ can benefit from a closer association with the analysis of structural transformation and its effects on policy regimes and stagnation tendencies.     

Narrating Crisis,Constructing Policy: Economic Ideas and Institutional Change in Syria

During crises, ideas play a decisive role in shaping radical paradigm shifts in economic governance. However, not all crises immediately produce such ‘great transformations’. Why do some ideas result in incremental rather than abrupt change after crisis? To identify mechanisms potentially explaining this variation, I conduct an exploratory process tracing of an understudied case of incremental institutional change: post-independence Syria. Competing political actors in Syria converged on identical policy responses to crisis despite their very different interpretations of its causes. Although power oscillated between these increasingly bitter rivals in the early 1950s, their ideational consensus on economic issues nevertheless led to a decade of steady institutional change that transformed previously fragile government institutions into powerful vehicles of statism. I derive from this analysis the potential causal significance of two new variables – crisis narrative and crisis response – and hypothesise that their configuration can explain variation in post-crisis patterns of institutional change. Ideas can explain not only the new direction of economic governance after crisis, but also the speed and scale of its movement.     

Contribution of intangible costs to the economic burden of multiple sclerosis

Abstract

Background:

Multiple sclerosis (MS) is associated with a substantial economic burden resulting from direct medical costs associated with health and disability-related resource utilization and indirect costs relating to reduced productivity. However, reduced health-related quality of life (HR-QOL) may be associated with additional costs, often termed ‘intangible costs,’ that should be considered as part of the economic burden from the societal or patient perspectives.

Objectives:

To review the contribution of intangible costs to the overall economic burden of MS.

Methods:

Medline was searched through March 2010 for relevant articles that included the terms ‘multiple sclerosis’ in combination with ‘intangible costs,’ ‘QALY,’ ‘quality-adjusted life year,’ ‘willingness-to-pay,’ and ‘WTP.’ Other than the restriction that the articles were published in English, there were no other exclusionary criteria for the search. Identified references were hand-searched to determine if intangible costs were estimated.

Results:

Thirteen studies across ten countries were identified that estimated intangible costs based on the number of quality-adjusted life-years (QALYs) lost due to a reduction in HR-QOL multiplied by accepted willingness-to-pay (WTP) thresholds. Although absolute costs varied depending on thresholds used and year of evaluation, the intangible costs accounted for 17.5–47.8% of total costs of MS. Furthermore, evidence suggested intangible costs are positively correlated with worsening disability. The largest increase in intangible costs occurred at the transition between mild and moderate disability. However, since no value has been established as being acceptable to pay for a QALY, a limitation of these studies was their dependence on the definition of the WTP threshold.

Conclusions:

Intangible costs substantially add to the economic burden of MS. There is not only a need to further characterize these costs and incorporate them into economic studies, but also to determine how these costs can be reduced through appropriate management strategies.     

Kaldor's 1970 Regional Growth Model Revisited

Kaldor's 1970 paper ‘The Case for Regional Policies’ was republished in the 60th anniversary volume of the Scottish Journal of Political Economy. This article reflects on the model after more than 40 years, and argues that although it has been criticized for its deterministic nature, it has lost none of its relevance. It predates the ideas of so‐called ‘new’ growth theory, and the new economic geography of Krugman, and provides at least a partial explanation of why growth rates and levels of per capita income between regions and between countries can continue to persist and even widen in contrast to the predictions of orthodox equilibrium theory.     

The Role of the Media in Sustaining Ireland's Housing Bubble

This paper examines Irish mainstream media coverage of the housing bubble that burst in 2007 and plunged Ireland into economic and financial crisis. It is shown that news organisations largely sustained the bubble until the property market collapsed. As such, news stories reflected the views and interests of the Irish corporate and governmental sectors, which had adopted neoliberal policies during the ‘Celtic Tiger’ years (1990s to 2007). A political economic conceptualisation of the Irish media outlines four factors explaining why this is so: (1) news organisations have multiple links with the political and corporate establishment, of which they are part, thus sharing similar interests and viewpoints; (2) just like elite circles, they hold a neoliberal ideology, dominant during the boom years; (3) they feel pressures from advertisers, in particular, real estate companies; and (4) they rely heavily on ‘experts’ from elite institutions in reporting events. The last section presents a detailed empirical analysis of Irish media coverage (newspapers and television) of the housing bubble that confirms the above claims. It is shown that prior to the bubble's collapse, the media made little mention of it, remained vague about it or tried to refute claims that it even existed, thus sustaining it.     

Making use of the past: theorists and historians on the economics of altruism

While deriving their explanation of positive utility interdependence from Edgeworth's presupposition that concern for others' welfare varies with the ‘social distance’ between individuals, economic theorists have overlooked both Smith's idea that sympathy can also develop on the basis of empathy and Wicksteed's idea that sympathy and altruism operate on different levels of analysis. In retrieving past ideas that have not been followed up in the modern theories of altruism, historians of economics should be able not only to shed some light on the main stages in its development but also to show that its achievements cannot be assessed independently of its limits.