The Economic Problem of Happiness: Keynes on Happiness and Economics

By stressing the substantial continuity of vision between John Maynard Keynes’s early unpublished essays and his more mature writings, the paper discusses Keynes’s ethics and focuses on his thoughts about happiness. In particular, we emphasize the anti-utilitarianism of Keynes’s vision and his belief that material wealth is but a precondition to enjoy the possibilities of a good life, and direct attention to problems of incommensurability raised by the multidimensional nature of happiness as considered by Keynes. We then argue that the rediscovery of Keynes’s legacy in this respect may be a precious counterweight to the most controversial aspects of today’s happiness research.     

A historiographical exhumation of J.A. Hobson's Over-Saving Thesis: General theory versus historiography

Abstract

The discussion of J.A. Hobson's understanding of over-saving has been largely confined within John Maynard Keynes' famous critique in the General Theory. I argue that gauging Hobson's contribution by ‘general theory’, that is, by an ahistorical, non-evolutionary yardstick, is to miss the larger part of Hobson's achievement. Hobson's conception of over-saving was contained within an evolving historiography of capital accumulation and took on various meanings depending on whether Hobson was discussing a competitive or monopolistic environment. I show that Keynes' ‘corrected’ version of over-saving was implicitly contained within Hobson's analysis of an evolving monopolistic industrial structure.     

An Institutionalist Vision of a Good Economy

The current crisis in global capitalism and the wide-ranging problems that have been caused by the promulgation of a regime of deregulation of goods, services, and labor markets across the globe, but especially in the United States over the past thirty years, may indeed prove to be the end of the neoliberal era. Thus it is an opportune time to reconsider how the global economy could be restructured along more equitable and progressive lines. This paper will present the institutionalist vision of just such a good economy, building on the ideas of Veblen, Ayres, Commons, and Galbraith. The institutionalist vision of a good economy is productive but also non-invidious, democratic but also pragmatic, egalitarian but also efficient. The good economy must therefore be embedded in key social institutions, and be regulated appropriately to preserve the most beneficial social and cultural institutions. The good economy must, furthermore, be a full-employment economy, with jobs available to all who are capable of making productive contributions to their society and to enable those who labor to work in decent conditions. Finally, the good economy must provision all its members with the necessary means of subsistence for them to achieve their human aims.     

Gandhian Economics from the Perspective of John R. Commons

We examine the evolution of law regarding corporations' legal status and the power of government to regulate corporations. John R. Commons described this jurisprudential history as changing the meaning of property from individual ownership to a going business owned by a going concern. Despite this history, the U.S. Supreme Court's 2010 decision, Citizens United v. Federal Election Commission, accorded corporations the rights of individual citizens, characterizing the corporation as an "association of citizens." If corporations are associations of citizens rather than going concerns distinct from their owners, the law will elevate private interests of shareholders above collective interests.     

A Critique of Economic Theory

Abstract:

Faced with home foreclosures, a stagnant economy, and weakly-effective federal programs of relief, Richmond, California, considered using eminent domain to acquire mortgages, modify loans to be more affordable, and thus prevent further erosion of the tax base. Strong objections have been lodged against such alteration of property rights, except through bankruptcy and foreclosure processes. The Richmond proposal is considered in the historical context of changes in the use of eminent domain as described by John R. Commons. Just as economic change forced U.S. courts to change the working definitions of property in the late nineteenth century, current contradictions in the way in which we think of households, and the systemic consequences of their management of debt, may produce changes in law and should alter the way in which economists analyze aggregate consumer spending and borrowing.     

Silvio Gesell: “A strange,unduly neglected” monetary theorist

Abstract

In recent years negative nominal interest rates came to the attention of a wider audience as one instrument to overcome the lower zero bound to conventional monetary policy. Modern proponents trace the origin of the proposal back to Silvio Gesell, a largely forgotten German autodidactic scholar of the interwar period, whose work provides valuable insight into heterodox late nineteenth- and twentieth-century economic thinking. Against this backdrop, the present article provides a comprehensive review of Gesell’s life and social economy, firmly linking him to German anarchism of the interwar period. It suggests that Gesell not only provided a monetary theory of interest, but put forward an independent monetary theory of economic crisis that is essential in understanding the historical origins of depreciative currency proposals. Moreover, the article maintains that Gesell’s monetary theory of interest can be seen as the missing link between heterodox economics, The General Theory, and anarchist economic theory.     

Evolution of the Corporation in the United States: Stabilized Scarcity and Vested Interests

The widening of markets beginning in the late nineteenth century in the United States involved changes in the financial and legal institutions supporting production for large-scale markets. The evolution of the corporation under these circumstances reflects the role of the legal system in formulation of formal rules which favor vested interests. As Thorstein Veblen said, “A constitutional government is a business government.”

This article examines the co-evolution of the legal system and the economic system as they relate to the merger movement at the turn of the twentieth century, the increased use of the corporate form, and the emphasis on pecuniary values over production to secure stabilized scarcity in the midst of cutthroat competition and deflation. The resultant financialization of the economy which continues today was reinforced by such legal rules as the Fourteenth Amendment’s protection of property, including intangible property, and the Rule of Reason accommodating some instances of monopolization. These stabilization policies have secured the rentiers’ return at the cost of the long term health of the national economy. John R. Commons’ observations on artificial selection and the use of law to make capitalism better offer a solution through laws regulating the detrimental aspects of financialization.     

Modeling Technological and Institutional Change in Karl Marx’s Theory of Capitalism

Health policy in the United States struggles with apparently conflicting purposes: (1) access to health care and (2) cost-containment. The failures of policy to resolve this apparent conflict have produced inequities in the health system and the perverse outcomes of high costs and poor access. The failures of policy are associated with the third-party payment system that has become a "rationing transaction" in John R. Commons' hierarchy of transactions. The dominion of private interests over the payment system elevates the financial interests of insurers over the interests of patients. Commons' approach to "reasonable value" as a means of resolving conflicts of interest through a process that engages all participants in the going concern suggests a strengthened role for the public sector in the payment system to achieve the public purposes of the health system.     

The Diaries of a Cabinet Minister,Volume One,Minister of Housing 1964–66

While John R. Commons often referred to third sector organizations, such as associations, cooperatives, and trade unions, it is unclear how these organizations can be fitted into his transactional typology. This paper clarifies this problem by identifying two dimensions of bargaining, managerial, and rationing transactions: 1) the extent of legal equality of transactional participants, and 2) the extent of commonness of these participants' transactional interests. These dimensions enable defining the identity of the third sector in terms of a distinct variety of rationing transactions combining legal equality of transactional participants with significant commonness of their interests. The paper further explores several implications of this argument for new institutional economics, concerning the citizenship aspect of markets and hierarchies and the possibility of viewing third sector organizations as hybrids between markets and hierarchies. The paper concludes with a discussion of the implications for further research.     

How Necessary Are Unions? Insights from John R. Commons

In this article, I assess Commons’s warning that union suppression endangers democracy. I do so by considering evidence from four viewpoints: (i) Commons’s view, (ii) the free market view, (iii) the power resource view, and (iv) the comparative sociology view. I expand on Commons’s insights with the question: What is democracy? My conclusion points to the reasonableness of his warning.     

The State,Public Policy and Heterodox Economics: An Introduction

While most heterodox economists endorse some amount of policy activism, there is no unified conception of the state and public policy in heterodox economics. To help clarify the similarities and differences within heterodoxy – and between heterodox and mainstream economics – a panel addressing this subject was convened in 2007 at the Annual Meeting of the Association for Institutional Thought. This article introduces the essays prepared for that symposium. They include an examination of the position of Marx and Engels, a clarification of the institutionalist views of Veblen and Commons, an outline of the perspective of Post Keynesian Institutionalism, and an account of some essential contributions of Classical Pragmatism (a major school of thought within the philosophy of science). The collection advances what Robert Heilbroner called “the worldly philosophy” by seeking to understand the role of the state in a world where institutions, defined broadly as social habits, adjust to other institutions.

Denmark’s Agricultural Institutions: An Instrumental Evaluation

This paper begins with a tax and a specially organized commission proposed by John R. Commons. Commons made his proposal because high tariffs were not benefiting workers. The paper contends that his proposal also applies to a current problem - the failure of trade agreements to improve working conditions. The paper bases its argument on data, standard economic reasoning, and Commons’ approach in “constructive research” to wage transactions, public purpose, limiting factors, and power imbalances.

The paper argues that Commons’ proposal could improve the evolution of American labor law and that it could ameliorate power imbalances created by laws that give corporations and trade associations a bargaining advantage over nations and organizations such as the International Labor Organization (ILO). It concludes that economic discourse could benefit from consideration of the belief behind Commons’ proposal - that costs of production passed on to consumers should include the cost of good working conditions.     

Institutional Economics and Chock-Full Employment: Reclaiming the “Right to Work” as a Cornerstone of Progressive Capitalism

In the United States, the “right to work” originally referred to a progressive call for the right to employment. For example, from the perspective of John R. Commons, the right to work included “the right of the unemployed to have work furnished by the government.” For Commons, that right was a logical outgrowth of Americans’ constitutional rights to life and liberty, “the next great human right.” This article reviews Commons’s right-to-work stance, the history of federal efforts to establish government as employer of last resort, and some key postwar institutionalist contributions to the literature on achieving jobs for all. Then it presents the case for reclaiming the right to work as a cornerstone of progressive capitalism.     

Institutionalism and the State: Founding Views Reexamined

Economists in the institutional tradition have spent a great deal of time dealing with the notions of governance and the state. Yet that school of thought has yet to develop a complete unified theory of either governance or the state. In the work Commons and Veblen we see very different levels of analysis and commentary on these issues. Both authors are recognized as founding thinkers in the Institutional school yet they differ on how they use their methods and they have differing ideas about the usefulness of the state. Still, considered together they present a fairly complete and useable set of ideas about how governance and the state work. This essay summarizes, clarifies, and somewhat expands on the views held by Commons and Veblen with the view of moving towards a clear and concise institutional theory of the state.

Puerto Rico in the 1970s and 1980s: Crisis of the Development Model

In his institutional economic essay on "Taxation in Chicago and Philadelphia" (published in 1895) John R. Commons addresses property tax assessment. He demonstrates that the revenue is not just a question of the tax rate and the distribution of the tax burden but also one of constitutional requirements and how the taxes are assessed. His essay is reviewed with regard to his later work, subsequent Institutional Economics, and the social provisioning of the market for professional tax advice. The degree of liabilities is defining characteristics of the differences between the United States and Germany.     

史前经济学中的企业家思想

企业家理论的研究,最早可以追溯到史前经济学。康替龙意义上的企业家是从事商业投机活动的套汇者;魁奈视野中的企业家则是农民或是大规模农场的经营者;杜尔哥说明了企业家作为企业的独立组织者和管理者的一般职能;尼古拉斯则强调企业家作为革新者的特征。     

Augusto Graziani and the Marx-Schumpeter-Keynes ‘Cycle of Money Capital’: A Personal Look at the Early Italian Circuitism from an Insider

ABSTRACT

The paper goes back to the origins of the theory of the monetary circuit in its Italian incarnation. Focus is on the evolution of Augusto Graziani's thinking between mid-1970s and mid-1980s, considering: (i) how Graziani connected (positively or polemically) with Keynesianism and Post-Keynesianism, both in its Cambridge and US incarnations; (ii) how Graziani interpreted the contributions of Keynes proposing a continuity between the Treatise on Money, the General Theory, and the articles on finance published after the 1936 book; (iii) how beneath the research programme of Italian circuitism (Graziani) we may recognise a peculiar Marxian inspiration, later on pursued for a while by some participants to the Seminar in Monetary Theory that Graziani coordinated in Naples (1981–85). Since the mid-1970s Graziani — who already had a profound knowledge of Neoclassical Theory; and who was deeply aware of the role of institutions — developed more and more his heretical stance into what we may label as a ‘structural Keynesian' approach, inserting Keynes’ views about finance to production and effective demand into a Schumpeterian vision of the capitalist process, and leading to Marxian conclusions about value and distribution. The early forays into circuitism by Graziani were not only critical towards the Neoclassical Synthesis, Monetarism, or New Classical Macroeconomics. They were also grounded in an intense confrontation with other contemporary heterodox currents. The outcome was the construction of an original scheme of thought which amounted to nothing less than a macro-monetary theory of capitalist production.     

Index Volume XI – 1977

Abstract:

This essay adapts Commons’s model of the legal foundations of capitalism to the peculiar circumstances of the neoliberal era. So doing provides a lens for seeing the steady erosion of state capacity to protect the commonwealth, even in nations with hegemonic currency. Our focus here is on the links between the “triple crisis” of the 1980s and the subprime and foreclosure crisis of the 2000s. We show how Brady bonds, after being used to resolve the Latin American debt crisis in the 1980s, provided a governing contractual context for subprime lending, and as such constrained the capacity of the U.S. government to respond to a crisis that preyed on the vulnerable, undercut community life, and contracted the commonwealth.     

A Method for Identifying Actors in a Knowledge Based Cluster

The objective of the paper is to develop a method through which we can identify the actors (industrial, institutional and individual) who are active in technology development in the same or similar knowledge fields. The paper is, thus, aimed to make a methodological contribution to the literature, which has emerged on the systemic nature of innovation. The method involves broadening out from a starting point in a specific patent class, which corresponds as closely as possibly to the technological area of interest, to a set of related patent classes by using co-classifications and citations. After close scrutiny of both patent classes and patents, the actors in the new classes, as well as in the original class, are then identified. We try out the method on radio wave antennas for communication technology in Sweden. We find a range of firms and other actors in a whole set of industries, which bear little relation to one another in an input-output sense. Although we cannot ascertain the extent of linkages or relations between these actors, our hypothesis is that they constitute a cluster around radio wave antenna technology in Sweden.