Economists on Darwin's theory of social evolution and human behaviour

Abstract

This article analyses Darwin's image among economists with a specific focus on his theory of social evolution as presented in the Descent of Man (1871). We propose an analysis of the way and context in which economists refer to Darwin, mention his name and quote his writings. It then appears that Darwin is most of the time viewed as a biologist only, who never developed his own theory of social evolution. He is thus quoted as a biologist who either borrowed concepts from economists who developed a theory of social evolution, or laid the basis for biological theory of social evolution developed by others, Spencer, in particular. It is only recently that eventually the twofold dimensions—biological and social—of Darwin's general theory of evolution are considered together by bioeconomists.     

Medical service reform: Rituals,hypothetical games and the social sciences

The purpose of this article is two-fold. It provides a framework for understanding what happened in the recently failed effort to reform the U.S. medical industry. The guiding theme is that politicians, the public at large and social scientists framed the discussion in largely ritualistic terms: “bureaucratic reformers” advocated a federally regulated national health system: “market reformers” advocated a free market health system. This framing of the debate doomed meaningful reform, whether or not the Clinton plan had passed. Second, with this discussion as backdrop, a closely related problem is examined:¹ why most social scientists failed to introduce more thoughtful, critical discussion into public debate. This part of the discussion draws on, though is not limited to, the author's experience of more than a decade with issues of health planning and policy,² in medical industry reform in Omaha and in Nebraska.     

An experimental investigation of Hobbesian jungles

Hobbes's state of nature serves as the analytical starting point for much of what economists have written on anarchy and the formation of government. Unfortunately little historical evidence exists about how men behaved in a “state of nature”, if such a situation ever even existed. We conducted a laboratory experiment to create a Hobbesian state of nature and observe the level of economic efficiency subjects achieve. We also investigate Buchanan's conjecture that people would unanimously agree to a social contract against theft.     

World energy outlook: An assessment of long-term energy developments and related policies

The purpose of this article is two-fold. It provides a framework for understanding what happened in the recently failed effort to reform the U.S. medical industry. The guiding theme is that politicians, the public at large and social scientists framed the discussion in largely ritualistic terms: “bureaucratic reformers” advocated a federally regulated national health system: “market reformers” advocated a free market health system. This framing of the debate doomed meaningful reform, whether or not the Clinton plan had passed. Second, with this discussion as backdrop, a closely related problem is examined:1 why most social scientists failed to introduce more thoughtful, critical discussion into public debate. This part of the discussion draws on, though is not limited to, the author's experience of more than a decade with issues of health planning and policy,2 in medical industry reform in Omaha and in Nebraska.     

How bad is forming your own opinion?

The question of how people form their opinion has fascinated economists and sociologists for long time. In many of the models, a group of people in a social network, each holding a numerical opinion, arrive at a shared opinion through repeated averaging with their neighbors in the network. Motivated by the observation that in reality consensus is rarely reached, we study a related sociological model in which individuals' intrinsic beliefs counterbalance the averaging process and yield a diversity of opinions.We interpret the repeated averaging process as best-response dynamics in an underlying game with natural payoffs and its limit as an equilibrium. This allows us to study the cost of disagreement by comparing between the cost at equilibrium and the social optimum. We also consider a natural network design problem in this setting: which links can we add to the underlying network to reduce the cost at equilibrium?     

Transnational Economists in the Eurozone Crisis: Professional Structures,Networks and Ideas

ABSTRACT

In recent years IPE and EU studies scholars have examined how actors in international organisations and EU institutions shape policy ideas. This article explores the professional structure of economists affiliated to two Brussels-based think tanks, Bruegel and CEPS, who, in the context of the Eurozone crisis, sought to contribute to the production of policy solutions to douse the flames of the crisis and put forward long term recommendations for the EMU’s stability. Through the analysis of more than 300 CVs and by drawing on network and sequence analysis, the article shows that in their search for solutions, Brussels-based think tanks bring together economists from different EU member states, whose authority draws on academic qualifications, experience, and seniority. They are ‘multiple insiders’ connected to a wide range of institutions and professional networks, who move back and forth between professional and organisational networks and serve as bridges between revisionist, orthodox, and mixed economic ideas.     

Public support for economic transition

This paper focuses on the Czech economic transition and aims to identify the determinants of unusually high and long-lasting public support for market reforms. The study is based on a unique combination of statistical analysis of survey data and oral history (interviews with reformers, managers etc.), which has enabled us to depict the views of the general public as well as of many people involved in decision-making processes on both macro and micro levels. These findings allow us to propose recommendations on how to gain and maintain public support for economic reforms. Above all, reformers must utilize the period of euphoria and communicate the individual steps of reform with the public.     

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?     

Social Economics and Evolutionary Learning

The major premise of this paper is that social and individual well-being depends significantly on people's capacity to learn and unlearn in communication with each other. This paper builds on social economic traditions that see communication and conversation as evolutionary generative and adaptive mechanisms through which individual and social learning occurs. Drawing on educational psychology and organizational behavior scholarship, five dynamic processes of conversational learning are introduced with the contention that they can help social economists understand at a micro level more deeply and more concretely how learning happens in the give-and-take of conversation. The paper explores the role of the state, organizations, and communities in fostering individual freedom and dignity, human rights, and economic democracy and concludes that the investment of value in people and their capability for purposeful action as social economic stakeholders can be enhanced through conversation as learning.     

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.     

Financial institutions and the financial crisis in East Asia

This paper investigates institutional reasons for the soft-budget constraint problem; and how the soft-budget constraint problem creates conditions which may result in a financial crisis. As a consequence of soft-budget constraints, bad projects do not stop; bad loans accumulate; and banks and depositors do not receive bad news on time. Poorly informed depositors are then likely to herd to overinvest when there is no bankruptcy (`frenzy'); and they are likely to herd to panic when bankruptcy occurs (`crash'), which may be the result of excessive bad loans that are also a consequence of soft-budget constraints. In contrast, under hard-budget constraints information is disclosed quickly regarding liquidation. Better-informed investors are then less likely to herd wrongly.     

Consensus among Economics Teachers from Transition Economies

The authors analyze the economic opinions of teachers and economists from the former Soviet Union who participated in economic education programs sponsored by the U.S. Department of Education under the auspices of the National Council on Economic Education from 1995–2001. They sought to determine the level of consensus on economic topics among the participants, and then analyzed their concordance with U.S. economists. They conclude that there is a significant level of consensus among the participants from the former Soviet Union, but this consensus is often at odds with the views of American economists.     

Productive and Unproductive Capital: A mapping of the New Zealand system of national accounts to classical economic categories, 1972‐95

New Zealand has gained considerable international attention for the neo-liberal economic reform programme it enacted from the mid-1980s; this programme has served as a model for similar reform elsewhere. Within the neoclassical framework of the reformers, the programme has produced many improvements to the economy. Such fundamental indicators as lower inflation, lower budget deficits and higher economic growth are cited as evidence of the improved economic conditions. Yet unemployment remains high, real interest rates are among the highest in the world, nominal interest rates and business confidence fluctuate considerably, and the balance of payments is deteriorating. Using a classical framework, this paper examines the neo-liberal reform of the New Zealand economy to see if there are alternative explanations for the persistence of these problems. The methodology developed by Shaikh & Tonak (1994) is used to map official national accounts data to classical economic categories for the 1972 to 1995 period. This approach is compared with earlier attempts at estimating classical economic categories for New Zealand. This classical view of the economic reforms is compared with the conventional view. The paper's main results are that there was a large increase in unproductive economic activity associated with the economic reforms in New Zealand; that the improvement in economic fundamentals emphasised by the reformers reflects this growth of unproductive activity; and that the persistence of other economic indicators is related to the ongoing weakness of productive activity.     

‘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.     

Theological visions in economics and religion

Professional economists and religious thinkers have generally not communicated effectively over the past two centuries, largely because the two groups tend to think about social systems from the perspective of incompatible “theological visions.” A theological vision is an encompassing set of presuppositions about how the social world functions and (implicitly) how it ought to function. The dominant theological vision among economists asserts that economic systems, while the product of purposive actions by individuals, are not the product of any design. Religious thinkers reflecting on economic systems tend to assume, by contrast, that whatever results from economic interactions has been willed by some individuals or groups. The modal economist assigns the economic system a kind of autonomy, which the religious thinker will be inclined to regard as almost idolatrous. Dialogue capable of bridging this gap will require the kind of close attention to other people's arguments that is rare outside of very small discussion groups.     

Design and evolution in institutional development: The insignificance of the English Bill of Rights

This paper challenges a belief that is deeply embedded in mainstream economics—that 1688–1701 saw a fundamental transformation in England that sprang from changes in the highest-level institutions designed by those who understood how to effect productive reform. This is the design hypothesis. The alternative is that change occurred in many features of society over a long period and that the 1688–1701 reforms were just one element in a deep ongoing evolutionary process. The paper presents evidence of two distinct types. First, legal history shows that the high-level institutional measures of 1688–1701 can be characterized primarily as either durable and endorsing the status quo or path-breaking and ephemeral. This is evolutionary trial and error. Second, patterns in structural breaks in myriad data sets reveal that widespread socioeconomic change was under way before 1688 and continued thereafter. Because England's early development provides a popular paradigmatic example for economists, the paper's verdict on the nature of English history is pertinent to debates on transition and development, on the importance of critical junctures, and on the relative roles of culture and institutions.     

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.     

Ethics,human behavior and the methodology of social economics

Social economists differ among themselves but are united in rejecting the rational actor model. They insist that individuals are more than economic actors; they arepersons with ethical values who live in community. That agreement over fundamentals leads social economists to embrace a methodological approach that differs substantially from the mainstream of economics. They (sometimes explicitly but usually implicitly), engage in a special form of storytelling known in the philosophy of social science as pattern modeling. Instead of using a pre-existing theoretical framework, such as rational choice theory, to logically construct a story, this type of story is constructed empirically from the bottom up through the use of case studies. The article concludes with a specific consideration of Albert Hirschman's methodology to illustrate the storytelling approach of a first rate and well-recognized social economist.     

Pauper Fiction in Economic Science: "Paupers in Almshouses" and the Odd Fit of Oliver Twist

The almshouse dominated the thinking about poverty and the poor during America's period of industrialization and its greatest economic downturns. Yet economists had surprisingly little to say about the facts of almshouse demography, and what they have written has been a rather bad fiction when seen in contrast with American novels. The main object of the paper is to delineate typical characters and characteristics of almshouses in America, and to examine the plausibility of various literary characterizations in light of the facts. The data certainly suggest new stories about paupers in American history: economists, and even the new social historians, have gotten it wrong. Between the Civil War and the Great Depression, the typical pauper living in an almshouse was not Oliver Twist (as many believe). He was not the Shiftless Man of the classical imagination (as Malthusians and Benthamites believe). The typical pauper of an American almshouse was plural. Instructive examples in American literature include Lennie, of Steinbeck's Of Mice and Men ; Denver, of Toni Morrison's Beloved ; Mrs. Thomson, of Edward Eggleston's The Hoosier School-Master ; and Forrest Gump, of Winston Groom's Forrest Gump .