Countering the Power of Vested Interests: Advancing Rationality in Public Decision-Making

Seemingly Pareto-improving reforms face more opposition than they should. In earlier work, I presented an explanation: voters correctly saw reforms as part of a long-term dynamic game, and they correctly saw how the reform affected outcomes (e.g., by affecting beliefs or coalition formation). Recent advances in behavioral economics derived from insights from sociology emphasize preference endogeneity, noting that beliefs are affected by those of others with whom one identifies and need not be consistent with rationality, as conventionally defined. Thus, individuals may have beliefs about the economic system that differ from those of economists. People may support policies which economists’ analyses suggest are contrary to their interests because they believe these policies advance their interests. Based on previous analyses of the causes of these seeming perversities, I show how economists can modify policy proposals in ways that enhance likelihood of support, e.g., with contingent provisions which are operative in the states of the world that economists know (believe) are unlikely to occur, but which enhance the wellbeing of individuals with such beliefs in those states. Those selling products that are adverse to one’s health have learned how to persuade customers to buy them. Likewise, politicians who are selling policies that are adverse to society’s wellbeing have learned how to market their ideas. Economists will similarly have to learn how to persuade citizens of the desirability of the evidence- and theory-based policies that they advocate.     

宗教信仰、政治身份与企业投资偏好

文章运用企业家宗教信仰的直接调查数据,考察了企业家的个人宗教信仰对企业投资活动的影响。研究发现,相对于研发型投资,有宗教信仰的企业家偏好于风险相对较小的关系型投资;不同类型的宗教信仰对企业投资偏好具有不同的影响,笃信东方宗教的企业家相对于笃信西方宗教的企业家更加偏好于关系型投资;企业家的宗教信仰对投资偏好的影响因企业家是否具有政治身份而有所不同,相对于有政治身份的企业家,没有政治身份的企业家的宗教信仰会更加显著地正向影响关系型投资,表明政治身份可能会弱化宗教信仰在关系型投资中的作用。     

风险、社会保障与农村宗教信仰

遵循理性选择研究范式,本文研究了农村社会保障与农村信教行为之间的关系.实证分析结果表明,风险是宗教选择和宗教参与的一个重要决定因素;目前农村社会保障水平对信仰量变有显著影响,但对信仰质变尚不够构成显著影响;"新农合"的开展能够有效地降低农村宗教信仰的增长速度.这些结果可以对农村"宗教热"现象进行解释:世俗社会对于农村居民所面临风险的不作为或者弱作为,是宗教在农村颇具吸引力的一个重要原因.     

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.     

Inside the Crystal Ball of Finance: Understanding Financial Economists' Attitudes to Market and Society

Market economists are thought to wield tremendous power—not only over financial markets but over governments that stray from the ‘market way’. Still, there is mystery about what economists think, and how they form their judgements. This article reports results from a survey of over 50 financial market economists from leading financial institutions in Australia conducted in December 2003 and January 2004. It provides insight into the opinions of economists who impact on markets and policy, especially through media commentary. The article identifies their economic and social views, comparing them with the Australian public. We then examine how professional views of economists differ from their personal views. Differences in professional and private views—especially over the role of government and labour markets—are an opportunity to ponder how judgements are formed and used. We offer tentative answers to the question: do these professionals—highly paid for their opinions—occasionally self‐censor?     

The health insurance status of Texans: Determinants of uninsurance (summary)

It matters whether “Economics” is distinct from “Religion” first, because the putative truths of Religion must be more secure than the provisional and fallible truths of Science; secondly, because the scientific claims of Economics would be undermined were they not independent of the religious beliefs of economists; and thirdly, because the contribution of each to public policy formation requires them to be distinct.     

The effects of (incentivized) belief elicitation in public goods experiments

Belief elicitation is an important methodological issue for experimental economists. There are two generic questions: 1) Do incentives increase belief accuracy? 2) Are there interaction effects of beliefs and decisions? We investigate these questions in the case of finitely repeated public goods experiments. We find that belief accuracy is significantly higher when beliefs are incentivized. The relationship between contributions and beliefs is slightly steeper under incentives. However, we find that incentivized beliefs tend to lead to higher contribution levels than either non-incentivized beliefs or no beliefs at all. We discuss the implications of our results for the design of public good experiments.     

Religion,discrimination and trust across three cultures

We propose that religion impacts trust and trustworthiness in ways that depend on how individuals are socially identified and connected. Religiosity and religious affiliation may serve as markers for statistical discrimination. Further, affiliation to the same religion may enhance group identity, or affiliation irrespective of creed may lend social identity, and in turn induce taste-based discrimination. Religiosity may also relate to general prejudice. We test these hypotheses across three culturally diverse countries. Participants׳ willingness to discriminate, beliefs of how trustworthy or trusting others are, as well as actual trust and trustworthiness are measured incentive compatibly. We find that interpersonal similarity in religiosity and affiliation promote trust through beliefs of reciprocity. Religious participants also believe that those belonging to some faith are trustworthier, but invest more trust only in those of the same religion—religiosity amplifies this effect. Across non-religious categories, whereas more religious participants are more willing to discriminate, less religious participants are as likely to display group biases.     

A Convoluted Path

In the first part of this paper, I described the events that led me from psychology into economics, and how the Association for Social Economics provided the ideal setting for someone attracted to economics but who disagreed with the normative conclusions of the mainstream. In the second part, I suggest three areas that will be of increasing importance in the near future—addictive behaviors, rising inequality, and global warming—each of which social economists are particularly well-suited to tackle.     

In what sense,if any,is “economics” distinct from “religion”; And why does it matter?

It matters whether “Economics” is distinct from “Religion” first, because the putative truths of Religion must be more secure than the provisional and fallible truths of Science; secondly, because the scientific claims of Economics would be undermined were they not independent of the religious beliefs of economists; and thirdly, because the contribution of each to public policy formation requires them to be distinct. They are indeed distinct, because Economics is knowledge about the economy whereas Religion is knowledge of God. Knowledge about is intellectual: knowledge of is experiential. The knowledge we may have of God comes by faith, hope and charity: the practice of these can give us no knowledge about interest rates in a capitalist economy.     

The moral ecology of markets: on the failure of the amoral defense of markets

Many economists have defended capitalism; most have tried to do so within the self-imposed methodological constraint that economists should employ only empirical arguments, not normative ones. This essay examines three classic amoral defenses of capitalism—by Milton Friedman, James Buchanan, and Friedrich Hayek—and argues that each fails on its own terms, since each implicitly incorporates moral presumptions essential to the author's argument. Constructively, the essay proposes that no one can adequately endorse (or critique) markets without making a moral evaluation of their context—their “moral ecology.” Four issues are identified as necessarily addressed in every adequate evaluation of markets. The essay does not endorse any one position on these elements, but argues instead that seemingly incommensurable standpoints on markets—ranging from Marxist to libertarian—actually represent positions on the these four basic issues.     

Toward an Evolutionary and Moral Science

Thorstein Veblen asked in 1898 why economics is not an evolutionary science; he also proposed a Darwinian paradigm shift for economics. Among the implications reviewed here was his claim that Darwinian principles applied to social entities as well as to biological phenomena. It is also argued that economists have additional reasons for taking Darwinian evolution seriously. Recent work on the evolution of altruism, cooperation and morality show that we are on the brink of developing an evolutionary-grounded theory of human motivation that breaks from the selfish utility-maximizer lambasted by Veblen. This new theory accepts a biological as well as a cultural foundation for moral dispositions. As noted here, the neglected British institutional economist John A. Hobson — who was an acquaintance of Veblen — foreshadowed this approach.     

The empire strikes back: Adam Smith,John Stuart Mill,and the Robust Political Economy of empire

Recent scholarship regarding the idea of a U.S. Empire has raised serious questions as to the feasibility and desirability of imperial ambitions. This paper traces the debate over the net-benefit of empire back to the Classical economists. Adam Smith argued that the British Empire was a net cost while John Stuart Mill concluded the same empire was a net benefit. Contemporary arguments about a U.S. Empire map neatly to the divergent views of Smith and Mill. In addition to engaging in an exercise in history of thought, we use Smith’s political economy as a means of adjudicating between the different claims regarding the feasibility of empire. In doing so, we subject the claims of proponents of American Empire against the standard of robust political economy, which holds that intervention must generate desirable outcomes where less than ideal incentive and epistemic conditions hold. In doing so, we conclude that many of the claims made by proponents are fragile under less than ideal conditions.     

Britain’s Industrial Evolution: The Structuring Role of Economic Theory

We trace the coevolution of industrial organization and the ideas and policies that have influenced Britain’s industrial development from Alfred Marshall’s pioneering work on the English industrial districts to the present. Then, we examine four contemporary districts — in footwear, motorsport, sparkling wine, and cyber security — that are internationally competitive, despite decades of ill-informed policy choices, if not neglect. We also investigate the case of British elite sport as a high-performance industrial cluster with potentially transferrable institutional arrangements, particularly with regard to the nature and role of the strategic lead body and the state, as well as relationships within the system. We conclude that Marshall’s methodological and theoretical approach to understanding industrial organization — and his belief that industrial districts would coexist with other forms of industrial organization (rather than be superseded by them) — helps to explain the dynamism of contemporary British industrial districts, with important implications for Britain’s industrial revitalization.     

Individual autonomy in evolutionary game theory: defending Sugden against Ross’s accusation of eliminativism

In this paper, I provide a defence of Robert Sugden’s contribution to evolutionary game theory against Donald Ross’s accusation of eliminating the individual’s autonomy by denying the explanatory role of rationality, utility maximization and rational beliefs. In this regard, I claim that Sugden’s methodological remarks on evolutionary game theory do not imply a characterization of real agents as automata. On the methodological level, Sugden claims that it is not correct to conceive the empirical phenomenon of social evolution in terms of normative concepts, whose empirical status is not obvious. However, Sugden proposes a theory that explains the agent’s behaviour in terms of inductive reasoning, adaptive beliefs, salience and pattern recognition. The latter are psychological features that describe the way agents manage to self-determine their own actions. From these clarifications, I draw the conclusion that Ross’s critique misunderstands Sugden’s contribution both on the methodological and empirical level.     

The Recent Critique of Theoretical Economics: A Methodologically Informed Investigation

My purpose is to appraise the recent critique of theoretical economics by applying the methodological perspective. Therefore, I start by identifying the main lines of criticism raised against theoretical economics in the aftermath of the post-2008 global economic crisis: namely, the voices criticizing economics for its unrealistic models, excessive mathematization, and overconfidence in its theoretical claims. First, I show that these issues are interconnected and should be jointly analyzed. Next, I investigate these lines of critique from the perspective provided by the latest achievements in the philosophy of economics (e.g., studies on the epistemic role of economic models). Taking this perspective reinforces some allegations against economics (e.g., these voices accusing economists of treating economic laws as universal laws of nature) and makes some criticisms more nuanced (e.g., the issue of unrealistic assumptions). I conclude by stating that such a methodological perspective is necessary in critically apprising the recent critique of economics.     

Index Volume XII – 1978

This paper presents and evaluates Don Lescohier's contribution to labor economics, and specifically to labor market policy. Lescohier, a prominent member of the Wisconsin Institutional School, put the labor market in the center of his investigations and tried to examine many of the factors that determine its efficient functioning, differentiating his study from the labor studies that focused on the individual — mainly union — worker. His analysis was essentially influenced by the progressive political climate of his time, the heterodox thought of some "non-Marshallian" British economists like Beveridge, and the newly emergent field of personnel management. Lescohier ardently proposed the creation of a federal-state centralized system of employment offices, which would undertake the difficult task of organizing the American labor market after the end of World War I. His work constituted both an interesting and significant case study, and thus deserves a higher position in the history of labor economics.     

"The Reality of the Present and the Challenge of the Future": J. Fagg Foster for the Twenty-First Century

This paper revisits J. Fagg Foster’s early assessment of the relevance of John Maynard Keynes’s theory of institutional economics. In his view, neither institutionalists nor most of Keynes’s followers really recognized the importance of Keynes’s theoretical insights. I examine Foster’s views on economic theory, with a particular focus on monetary theory. I apply Foster’s approach to what is now called modern money theory, an approach developed by heterodox economists working in the institutionalist and post-Keynesian traditions. I argue that this approach is consistent with Foster’s, and it offers a way forward to policy formation for the twenty-first century.     

American institutionalism and its British connections

Abstract

This paper examines the connections between American institutionalists and a number of ‘non-Marshallian’ British economists and social scientists, several of whom were associated with the Fabian Society or the London School of Economics or both. Specifically, the links between institutionalists such as Walton Hamilton and Wesley Mitchell and British social scientists such as John A. Hobson, Henry Clay, R.A. Tawney, William Beveridge and Graham Wallas. It is argued that these connections were related to common views on the importance of institutions, compatible methodological views, common interest in questions of social value, shared policy concerns (particularly unemployment and the coal industry), shared interests in the development of new institutions for education and research in economics and shared connections with the funding activities of the Rockefeller Foundation. These connections were much more extensive than has usually been realized. Some reasons for this British group not to form into a movement similar to American institutionalism are explored.     

Religion and the sociological critique of political economy: Altruism and gift

Abstract

This article shows that there is a strong connection between the religious component of French sociology and the critique of political economy. In the first section, I consider how selfish behaviour, or egoism, became treated as a major threat endangering the creation of industrial society by those concerned about the diffusion of political economy. I then summarise the methodological critique set forth in the Cours, before connecting this critique to the economic content of the Système and the concept of altruism. In the following section, Spencer's view of altruism is contrasted to that held by Comte, and then I consider the reaction of French political economists, defending the moral value bought about by their science. In the final section, I explain how the Comtean approach was re-enacted by Durkheim and then by Mauss, at the head of the “sociology of religion” section of L'Année sociologique, the Durkheimian journal, to give birth to the theory of gift-giving behaviour that Mauss used to critique political economy in the 1920s.