Institutions and Values: A Methodological Inquiry

Economics entails a study of institutions regardless of the school of thought, and it is inherently an analysis of institutional transformation with a vision toward creating positive social change through economic arrangements. However, the conceptions of institutions, identity of individuals, human nature as it pertains to economics, identification of the economic sphere, its concerns, and studying its evolution, all vary substantively across schools of thought. We examine the following issues: (i) the differences in the ontological identity of the individual between heterodox approaches, new institutional economics (NIE), and the neoclassical school; (ii) the central point of divergence between original institutional economics (OIE) and NIE, despite both schools being committed to the project of an “institutionally” centered approach to economics; and (iii) the absence of a cohesive project to explore foundational theoretical congruencies among those heterodox approaches that have a shared vision, values, and a common ontological identity of socially embedded people.     

Can We—and Should We—Measure Well-Being?

In this article, I argue that recent criticisms of happiness research in economics can be extended to any conception of well-being used for scientific or policymaking purposes. These criticisms are both practical and ethical: well-being is not only impossible to define, measure, or implement, but its use also offends human dignity through unjust distribution of harm and value substitution. On this basis, I recommend the abandonment of welfare economics and urge social economists to propose new approaches to addressing social problems that are more focused and respect the dignity of persons.     

Presidential Address: Welfare Economics Beyond Welfarist-Consequentialism

Capitalizing on the recent work in social choice theory, I re-examine the foundations of post-Pigovian welfare economics and social choice theory. The structure of the "old" and "new" welfare economics is critically scrutinized, and the culprits of the poverty of welfare economics as well as of Arrovian social choice theory are boiled down to their common informational basis, referred to as welfarist-consequentialism . Alternative avenues that may be taken in an attempt to escape from the poverty of normative economics are identified and examined. These are focused on interpersonal comparisons of welfare levels, opportunity preferences and the procedural fairness of social choice.
JEL Classification Numbers: B21, D63, D71.     

The Normative Problem of Merit Goods in Perspective

Abstract

In his Theory of Public Finance (1959), Musgrave invented the concept of merit wants to describe public wants that are satisfied by goods provided by the government in violation of the principle of consumer sovereignty. Starting from Musgrave’s mature discussion (1987), I construct two categories to classify the explanations of merit goods. The first strand of thought attempts to justify merit goods within the New welfare economics, by modifying its assumptions to accommodate irrationality, uncertainty, lack of information, and psychic externalities. The second category encompasses more radical departures from consumer sovereignty, drawn from philosophical critiques of economics. In the third part of the paper, I argue that the two strands might be represented by a non-individualistic social welfare function. I also show how this solution echoes Musgrave’s early views on public expenditures before he coined the concept of merit wants. From an historical perspective, the survival of the concept highlights the persistence of a social point of view in welfare economics.     

Toward an experimental foundation for benefit-cost analysis

Empirical results from experimental economics and neuroscience have uncovered regularities in human behavior that may provide a base for new approaches to welfare theory and economic policy. These empirical findings do not challenge basic economic concepts but they do imply that our assumptions about “rational behavior”, “opportunity cost”, and “social welfare” should be revised using sound scientific evidence and methods. This research has the potential to make benefit-cost analysis more reflective of how people value gains and losses, and more responsive to considerations of environmental and social responsibility.     

回归失落的传统:广义虚拟经济理论的政治经济学解读(I)

政治经济学曾经是经济学科的核心,其重要的标志就是强调国家的富强和政府的经济调控职能。然而,在后来的发展历程中,经济学科逐渐分裂为强调归纳和历史研究的政治经济学范式与推崇纯演绎和数学分析的纯经济学范式。前者延续了早期经济学科的政治经济学视角,强调政治对经济发展的影响作用,并进而对制度尤其是文化因素进行了新的考察;而后者则抛弃了早期经济学科的政治经济学,在过分强调模型分析和数学方法的趋势下,逐渐演变成为一门专注于模型分析的纯粹经济学,在越来越脱离政治经济学的同时,也越来越与现实脱节。本文把政治经济学与当今一些中国学者提出的广义虚拟经济理论相联系,从政治经济学发展的角度对广义虚拟经济理论进行解读。本文认为在政治经济学研究缺失的今天,广义虚拟经济理论是对政治经济学的一种回归;其不仅坚持了传统的政治和文化视角,而且通过"制文化权"等理论的提出,对政治经济学理论体系进行了发展和创新。     

ACCOUNTING FOR SOCIAL COSTS ASSOCIATED WITH RESALE PRICE MAINTENANCE

Resale price maintenance (RPM) can provide a positive or negative effect on social welfare. The evaluation depends on many factors, such as whether a high-demand or low-demand state exists, storage/holding costs, and disposal costs. A number of articles addressing the welfare effects of RPM conclude they enhance social welfare. Disposal costs for manufactured products are real and increasingly accounted for in firm costs, and are an essential issue in environmental economics. This article examines the case for RPM with disposal costs. When not incorporated into firm profits, RPM may be welfare reducing. (JEL D42 , D62 , D81 )     

Pluralism and heterodoxy in economic methodology

Economists work within models that are simplified depictions of reality. An argument for a pluralistic understanding of economics is that different approaches lend insight by looking at different phenomena from different viewpoints. While all economists can benefit from taking a pluralistic approach to understanding economics, Austrian school economists must be more pluralistic in their understanding and presentation of ideas than mainstream economists if they want their ideas to have an impact on mainstream economics. Despite the argument for a pluralistic understanding of economics, in research, as in other activities, specialization increases productivity. While Austrian school economists can benefit from taking a pluralistic approach to understanding economics, they are likely to be most productive in their research by specializing in the development of Austrian school methods and ideas.     

Monopoly Welfare Losses in the Long Run

Irrespective of the merit of any previous approaches to assess the deadweight loss due to monopoly they are all static in character and disregard the long term effects of monopoly power. Taking into account the long run consequences of monopoly power within the framework of the new growth theory yields startling new insights. In contrast to the Schumpeterian view that there is a tradeoff between static inefficiency and dynamic progressiveness monopoly power is shown to entail not only static welfare losses but also to exert an adverse influence on economic growth. Once this is granted the long run welfare loss due to monopoly can be shown to dwarf the static losses so far treated in the economics literature.     

Can welfare be measured with a preference-satisfaction index?

Welfare in economics is generally conceived of in terms of the satisfaction of preferences, but a general, comparable index measure of welfare is generally not taken to be possible. In recent years, in response to the usage of measures of subjective well-being as indices of welfare in economics, a number of economists have started to develop measures of welfare based on preference-satisfaction. In order to evaluate the success of such measures, I formulate criteria of policy-relevance and theoretical success in the context of preference-satisfaction measures of welfare. I present a detailed case study of the methodological choices put forward in a prominent generalized proposal for measuring welfare through preferences recently published in the American Economic Review. I contrast this with an alternative welfare measure which also uses preferences to weight aspects of welfare: the ICECAP-A measure. I assess the methodology of both approaches in detail and argue that the two goals of a preference measure of welfare can only be satisfied at the expense of making a measure prohibitively costly.     

Demography and welfare economics

The focusing on demographic issues as an important part of welfare-economic assessment shifts the evaluative space in the direction of public discussion and social concern. A commoditycentred view of individual success and social welfare is often used in economics. But the linkage between our economic wealth and our ability to live as we would like has strong limits. This is partly because of interpersonal variations between individuals, but also because of variations in public and social arrangements (for example, for public health care, education and social security). The use of demographic perspectives can enrich economic analysis in several ways. In particular a demographically oriented system of evaluation can not only focus on variables that we all value, but it also gives us the freedom to decide what weights would be most appropriate for the exercise in which we might be engaged. The problem of valuation in welfare economics is ultimately a social-choice issue, requiring the use of explicit judgments on which the society can achieve some consensus through political processes.Lecture presented to the annual meeting of the Austrian Economic Association in Vienna, 24 May 1994. The author is grateful for support from the National Science Foundation for the research on which this paper draws.     

The Economics of Regulating Cross-border Finance: Two New Views

For much of the 20th century the dominant view in macroeconomics was that cross-border finance needed to be regulated in order to balance the ‘impossible trinity’ first sketched by John Maynard Keynes in his two books on monetary theory. The dominant view in development economics during the same period was that cross-border capital flows need to be regulated for similar reasons but also to mobilize domestic resources for economic development. The view that capital mobility was something to be constrained fell out of favor in mainstream economics by the 1980s and 1990s. The experience of numerous financial crises in the past 20 years has spawned new economic theories that reintroduce the notion that cross-border finance can cause financial instability. One strand of new theory in this realm picks up from Ragnar Nurkse, Hyman Minsky, and others, and has become popular in many emerging market capitals and in the United Nations system. Another strand of new theory comes from modern welfare economics and is gaining ground in mainstream economics, central banks, and the Bretton Woods institutions. This paper examines these new breakthroughs and traces them to their origins in economic thought. Coupled with new econometric evidence on the efficacy of capital account regulation, the regulation of capital flows is justified now more than ever.     

经济学研究的两大基本内容及其对知识结构的要求——对日益狭隘化的现代主流经济学之反思

经济学的根本目的是提高国民和社会的福利,这不仅关涉到自然资源的利用问题,而且关涉到人与人之间的社会关系。相应地,经济学的研究内容包含了伦理学和工程学两个方面:它们是相辅相成的,共同构建了整个经济学的理论大厦。事实上,不仅经济学与伦理学之间的关系源远流长,而且即使是专注于研究自然资源配置问题的主流经济学,也根本无法脱离具体的社会关系。正因如此,经济学的研究需要非常广泛的知识;否则,根本无法理解具体的经济现象,也无法提供合理的政策建议。然而,现代主流经济学日益局限于工程学一个方面,并极端地采取抽象化的分析路线,偏重于数理的训练而疏忽其他社会科学领域知识的吸收,从而造成了理论与现实的脱节。     

Attitudes Toward Catastrophe

In light of climate change and other global threats, policy commentators sometimes urge that society should be more concerned about catastrophes. This paper reflects on what society’s attitude toward low-probability, high-impact events is, or should be. We first argue that catastrophe risk can be conceived of as a spread in the distribution of losses. Based on this conception, we review studies from decision sciences, psychology, and behavioral economics that explore people’s attitudes toward various social risks. Contray to popular belief, we find more evidence against than in favor of catastrophe aversion—the preference for a mean-preserving contraction of the loss distribution—and discuss a number of possible behavioral explanations. Next, we turn to social choice theory and examine how various social welfare functions handle catastrophe risk. We explain why catastrophe aversion may be in conflict with equity concerns and other-regarding preferences. Finally, we discuss current approaches to evaluate and regulate catastrophe risk.     

新农村建设:一个政治经济学视角的解析

新农村建设是对城乡经济社会发展不平衡的一个积极回应,它包含经济增长和社会发展两个层面.从政治经济学视角出发,在经济增长方面,户籍、土地、保障等制度性因素制约到农村劳动力的有效流转,从而对劳动生产率提升和农业发展产生负面影响;在社会福利方面,农民的数量优势没有转化为谈判优势,对市场价格和政策制定的影响力较小,其社会福利获取以及发展程度处于不利地位.据此,新农村建设必须对相关制度性、组织性因素进行完善和改革,部分农民的真正流转和留守农民的自发组织将尤其重要.     

关于绿色经济学的几个问题

绿色经济学是在对传统经济学反思与批判的基础上,整合相关绿色理论资源、适应绿色经济实践而发展起来的经济学学科,是经济学内部逐渐发展起来的新因素和新需求,也是重建经济学理论的新思路和新尝试。绿色经济学已在学科涵义、研究对象、基本预设、理论体系和学科体系等方面进行了探索,同时亟待从学科建设角度,对绿色经济学的研究视角、参照标准、分析工具和"成本—效益"模式等问题进行深入研究。绿色经济学将成为推动经济发展、实现社会公平、促进环境优化、推进社会进步的重要力量,对当下我国转变发展方式、实现科学发展有重要的理论价值和实践意义。     

新技术扩散速率和量能研究——福利计算与政府政策中一个奇特的OOP思想运用

在经济学所追求的三种效率——生产效率、分配效率和动态效率中,以新技术扩散为核心组成的动态效率是最为重要的一个方面,因为它从根本上决定了社会福利所能浮动的范围。文章创新性地引入了OOP实验思想,利用JBuider动态经济环境模拟,以分析和研究新技术倡导者、旧技术维护者和社会福利促进者(政府)之间的动态博弈,对新技术扩散的动态速率和量能进行研究,尝试性地解决了经济学理论中对于新技术扩散、社会福利增进等指标的定量测算难题。     

Health, Health Care and Social Welfare

This paper reviews the conceptualisation of social welfare in the health economics literature, and the contribution of health and health care to social welfare.     

The undergraduate economics coursework of elementary and secondary school teachers

Abstract

In this study, the authors analyze the undergraduate economics coursework of U.S. college graduates who became pre-college classroom teachers. The results show that teachers successfully completed on average the equivalent of about half an economics course in their undergraduate coursework. About 6 in 10 teachers earned no course credits in economics. Of teachers certified to teach social studies—the ones most likely to teach economics—40 percent did not take an undergraduate course in economics. The percentages are 19 percent for high school teachers, 48 percent for middle school teachers, and 76 percent for elementary school teachers. High school teachers certified to teach social studies completed an average of only about one and a half economics courses as undergraduates.