Forms of emergence and the evolution of economic landscapes

Over the past two decades, the notion of ‘emergence’ has attracted increasing attention and controversy across the social science, including economics. Within this context, as economic geographers, our concern in this paper is with the usefulness of the idea of emergence for studying the economic landscape and its evolution. The paper considers in what sense geographical processes and places can legitimately be described as emergent, how such places themselves produce emergent effects, and how we should conceive of and study the ‘emergent’ space economy. To do this, we apply Deacon's (2006) models of first-order, second-order and third-order emergence, and trace through their implications for constructing an ‘emergence perspective’ in economic geography. The notion of third-order emergence is argued to be the most promising, since it focuses explicitly on emergence as an evolutionary process. What is evident, however, is that a notion developed mainly for applications in physical and biological systems requires further elaboration and exploration if it is to provide explanatory leverage in studying the evolution of economic landscapes.     

Economic emergence: An evolutionary economic perspective

The standard neoclassical approach to economic theorising excludes, by definition, economic emergence and the related phenomenon of entrepreneurship. We explore how the most economic of human behaviours, entrepreneurship, came to be largely excluded from mainstream economic theory. In contrast, we report that evolutionary economists have acknowledged the importance of understanding emergence and we explore the advances that have been made in this regard. We go on to argue that evolutionary economics can make further progress by taking a more ‘naturalistic’ approach to economic evolution. This requires that economic analysis be fully embedded in complex economic system theory and that associated understandings as to how humans react to states of uncertainty be explicitly dealt with. We argue that ‘knowledge,’ because of the existence of uncertainty is, to a large degree ‘conjectural’ and, thus, is closely linked to our emotional states. Our economic behaviour is also influenced by the reality that we, and the systems that we create, are dissipative structures. Thus, we introduce the notions of ‘energy gradients’ and ‘knowledge gradients’ as essential concepts in understanding economic emergence and resultant economic growth.     

论《资本论》的研究对象、方法和分析范式

马克思在《资本论》第一卷序言中明确指出:"我要在本书研究的,是资本主义生产方式以及和它相适应的生产关系和交换关系。"这句话是关于《资本论》的研究对象的经典表述。我们可以将马克思这一经典表述解读为:作为资本主义经济形成的生产力基础的生产组织或劳动方式,以及和它相适应的生产关系和交换关系。在《资本论》中,马克思将历史唯物主义运用于资本主义经济形态的研究,发现了这种经济形态的特殊运动规律。这就是说,《资本论》的研究方法就是历史唯物主义。在《资本论》的宏大的理论体系的展开过程中,历史唯物主义的世界观这个根本的方法论原则,具体化为经济学分析的一系列规范:(1)从生产力与生产关系的矛盾运动中解释社会经济制度变迁;(2)以生产资料所有制为基础确定整个社会经济制度的性质;(3)在历史形成的社会经济结构的整体制约中分析人的经济行为;(4)依据经济关系来理解政治和法律的制度以及道德规范。     

On the divergence of evolutionary research paths in the past 50 years: a comprehensive bibliometric account

In the last two decades, there has been a noticeable increase in published research on evolutionary economics. The general perception is that formalization lags behind appreciative work. Notwithstanding, this general reading has yet to be supported by real data analysis. This work presents a survey on evolutionary economics, aimed at exploring the main research paths and contributions using bibliometric methods. The documentation is based on an extensive review of the abstracts from articles published in all economic journals over the past 50 years gathered from the Econlit database. Evolutionary contributions have apparently not converged to an integrated approach. Two rather extreme main research strands emerged: ‘History of Economic Thought and Methodology’ and ‘Games’. Whereas formal approaches have a reasonable and increasing share of published papers, purely empirical-related works are relatively scarce, representing a meagre and stagnant percentage of published works. This highlights the need to redirect the evolutionary research agenda.     

Political economy and the ‘modern view’ as reflected in the history of economic thought

This paper focuses on the transition from classical political economy to ‘modern’ economics, a central aspect of which is the ascent of the conception of ‘theory’ as a mere instrument of research. We analyse how this transitional phase was perceived and interpreted in representative, more or less contemporaneous histories of economic thought: those by Luigi Cossa in 1880, by John Kells Ingram in 1915 (originally published in 1888), and by Charles Gide and Charles Rist in 1915. Despite their differences, all authors share the same conception of the structure of scientific laws, as well as the view that economics must be separated from liberalism.     

Adjusting the model to adjust the world: constructive mechanisms in postwar general equilibrium theory

Economic methodologists most often study the relations between models and reality while focusing on the issues of the model's epistemic relevance in terms of its relation to the ‘real world’ and representing the real world in a model. We complement the discussion by bringing the model's constructive mechanisms or self-implementing technologies in play. By this, we mean the elements of the economic model that are aimed at ‘implementing’ it by envisaging the ways to change the reality in order to bring it more in line with the model. We are thus concerned mainly not with the ways to change the model to ‘fit’ the reality, but rather with the model's own armature that is supposed to transform the world along theoretical lines. The case we study is Arrow–Debreu–McKenzie general equilibrium model. In particular, we show the following: gradient methods and stability could be regarded as constructive mechanisms of general equilibrium modeling in the context of market socialism debates; the obsession of general equilibrium theorists with these concepts can be partly explained by the fact that they hoped not to be faithful to reality, but rather to adjust it to fit the theoretical model; mechanism design theory initiated by the stability theorist Leonid Hurwicz could be seen as a successor of this position. We conclude by showing the relevance of this analysis for epistemic culture of much of contemporary economics and hence, claim that it is an important complement to the traditional philosophy of economic modeling.     

The breakdown of the IS–LM synthesis: implications for post-Keynesian economic theory

The monetarist and the new classical economics attack routed the IS–LM version of Keynesian theory and the large scale econometric models from the centre of macroeconomic research. However monetarism and the new classical economics were more successful as a critique of the IS–LM orthodoxy than as a basis for fruitful research and policy analysis.

Post-Keynesian economists also attack the IS–LM orthodoxy, mainly because it misspecified ‘… the economic society in which we actually live’. Post-Keynesians that emphasized financial and labour markets argued that properties of the real world economy made instability normal results ofmarket interactions.

The vacuum in main line theory that developed as the shortcomings of monetarism became evident led to a revival of interest in basic Keynesian propositions. This has spawned what is now labeled a new Keynesian economics. New Keynesian economists conform to the modeling standards set by the new classical rational expectations school but claim to get Keynesian results. To a degree these results are compatible with propositions of post-Keynesian economics.

It is suggested that a convergence between the new and the post-Keynesian economics can be expected, and the result is likely to be fruitful.     

The sceptic as an economist's philosopher? Humean utility as a positive principle

Whereas in philosophy David Hume was long regarded as a negative thinker to be criticized rather than read, many thinkers interested in social and economic theory from Adam Smith onwards found key concepts, distinctions and problems as developed by Hume useful and inspiring. This applies not only to his seminal contributions to technical problems in economics. It is argued that the way in which Hume employed ‘utility as a positive principle’ (most notably in his ‘experimental’ moral theory) is of pivotal importance in this context. It allows for:

a. distinguishing between internal motifs and external circumstances and constraints; and for

b. making explicit the abstract logic of social interaction structures, mechanisms and processes.

Both are necessary conditions for employing the logic of social situations and mechanisms in the explanation of social institutions and economic processes. It moreover prepares the ground for the use of simplified or cartoon-like models of individual agency in economic and social theory, but also for its critique. On this basis, Hume's influence on various strands of social and economic thought, but also the specific differences with regard to more ‘rationalistic’ approaches (such as Hobbesianism or important versions of neoclassical economics) can be assessed more clearly.     

Trade and the environment: from a ‘Southern’ perspective

The relationship between free trade and the environment is one of the main issues of contention between environmental and ecological economics. Environmental economics assumes a positive relationship between free trade, economic growth and environmental policies. Environmental externalities may cause important damage. However, trade is not to be blamed for this. Instead, the fault lies with policy inadequacies at the national level. On the other hand, some ecological economists criticise the assumptions of environmental economics, especially the immobility of production factors and the positive correlation between income and environmental quality. They plead for measures to prevent deterioration of ‘Northern’ environmental standards in a ‘race to the bottom’ due to ‘ecological dumping” from the South. In this paper, we argue that neither environmental economics nor ‘Northern’ ecological economics take into account the structural conditions determining the international trade system. Based on some new empirical evidence on material flows, we stress the notion of environmental cost-shifting. If physical and political ecology perspectives are adopted, a ‘Southern’ approach to the trade-and-environment issue may arise.     

Schumpeterian dynamics : Some methodological notes

The main purpose of this paper is to define ‘Schumpeterian dynamics’ and to indicate how it can serve as a basis and starting point for studies in development economics irrespective of how Schumpeter used his general approach and what kind of hypotheses he launched. Schumpeterian dynamics is characterized by its focus on economic transformation. This implies that the main interest is in causal chains outside the scope of macroeconomic growth analyses, namely in disequilibria and chain effects created inter alia by entrepreneurial activities, market processes and competition as a dynamic force. The micro underpinnings of such analyses therefore differ from those of growth models which deal with aggregates, such as investments and saving, productivity, income distribution, wage shares in value added, and capital/output ratios. Seen through Schumpeterian glasses, the micro units have no well-defined generalizable ‘propensities’, and they are not fully informed calculators reacting in a mechanical way to prices that they cannot influence. Instead, firms continuously seek new information and often search for projects which, if carried out, exert transformation pressure on the markets. Consumers can also actively influence firms and markets and do not only passively react to supply prices. Transformation analyses should not replace macroeconomic growth models, but a change of roles is called for. Such analyses have too long and too often been regarded as empirical complements to growth analyses and therefore as belonging mainly to the domain of economic historians. The stress on ‘complement’ instead of ‘alternative’ implies that some sort of a synthesis should be sought in theoretical as well as in empirical research.     

Prior Commitment and Uncertainty in Complex Economic Systems: Reinstating History in the Core of Economic Analysis

Conventional ‘neoclassical’ economics is very useful in understanding how prices are determined but less so as a general basis for understanding the economic behaviour we observe. What is not taken into account is that economic systems are dissipative structures that are complex, but incompletely connected, networks of rules. It is explained why a degree of prior commitment in decision‐making is inevitable in complex economic systems and the implications of this are examined. It is argued that economic analysis must begin with the reality that choices are made in relation to pre‐existing commitments, both with regard to economic structures built in the past and to prevailing systems of belief, when deciding what to do in a future characterised by uncertainty. It is explained how conventional economic incentives can be dealt with in such a complex historical context building upon the neoclassical perspective of Alfred Marshall over a century ago. It is argued that econometric modelling remains viable and useful in understanding behaviour in complex economic systems. It is shown how we can design and interpret time series econometric modelling from a complex systems perspective.     

Orthodox Core–Heterodox Periphery? Contrasting Citation Networks of Economics Departments in Vienna

ABSTRACT

The notion of an ‘orthodox core–heterodox periphery’ structure and the extent of interdisciplinary links have been widely discussed, and partially investigated bibliometrically, within economic discourse. We extend this research by applying tools from social network analysis to citation data of three economics departments located in Vienna, two mainstream and one non-mainstream, to assess their relative citation patterns. We show that both mainstream economics departments follow the asserted core–periphery pattern and have a mono-disciplinary research focus, while the citation network of the non-mainstream department has a polycentric structure and is both more heterodox and interdisciplinary. These findings suggest that discussions about the future of heterodox economics should pay more attention to the organizational level and seek allies from other disciplines.     

Narrativity and identity in the representation of the economic agent

We critically survey explicit discussions of the narrativity of economic agents by economists. Narrativity broadly refers to the way humans construct and use stories, notably to define their personal identity. We borrow from debates outside of economics to provide the critical dimension of our survey. Most contributions on the narrativity of economic agents do not discuss one another. To establish communication, we suggest a structure of oppositions that characterize these contributions taken as a whole. These oppositions are notably characterized by three tensions: in terms of methodological attitudes (‘scientism’ vs. ‘humanism’), of underlying theories of personal identity postulating the existence of a unique sense of self or not (‘diachronicity’ vs. ‘episodicity’) and of the normative implications of narrativity (‘welfare-increasing’ vs. ‘welfare-decreasing’). The main goal is to clarify the structure of opposite positions within a more or less explicit debate about the identity of individuals in economics.     

I Want to Be an Economist: A Rejoinder to Ross Gittins

This article provides a rejoinder to Ross Gittins’ commentary on the potential contributions of psychology and behavioural economics to public policy formation. It includes three main arguments. First, that behavioural economics is not a new approach to doing economics, but instead is best seen as a way of enriching ‘conventional economics’ (using Gittins’ terminology). Second, that behavioural economics is not a panacea. Not all aspects of economic activity need psychology to be understood and behavioural economics has limitations. Third, that the failings of conventional economics are not as severe as Gittins suggests.     

On novelty and economics: Schumpeter’s paradox

Is novelty as such an intra or extra-economic phenomenon? Must we, necessarily, treat novelty uniquely as something that, from outside of an economic system, has an influence on it and on its evolution? Is it not a paradox to say that something that has no economic meaning is able to explain economic change? If so, is this paradox present in the Schumpeterian view on development? In this paper, we present what will be called the Schumpeter paradox: denoting nominally ‘novelty’ and ‘creator personality’ as its source, and ‘norm change’ as an analytical tool, is insufficient to separate different fields such as development and growth, if previously (and as a necessary condition) one does not develop a theoretical framework that has a natural place for the elements of ‘novelty’ and ‘creator personality’ that can support such a difference. Nobody should pretend that the study of economic development processes is straightforward. There are good grounds for believing that the innovation ‘black box’ will remain partially closed to economic analysis. However, this does not mean that nothing substantial may be said about novelty and economic development. How to tackle with this topic (and so, with the above-mentioned paradox) will require a change of perspective: a heuristic task should be undertaken. The ‘action plan approach’ here proposed would provide a coherent analytical framework to tackle with this kind of paradox.     

Economics and evolutionary mismatch: humans in novel settings do not maximize

Standard economic theory does not consider the deep evolutionary history of humans. As such, economics ignores the notion that human nature can be ‘out of sync’ with certain aspects of modern life. In contrast, the theory of ‘evolutionary mismatch’ argues that novel products and situations might present particular difficulties. The assumptions of economics are discussed and examined from an evolutionary perspective including both equilibrium and mismatch. The conclusion is that economics would be changed by evolutionary thinking in general, and evolutionary mismatch in particular.     

Towards an Austro–German theory of uneven economic development? A plea for theorising by inclusion

Based on Meir Kohn’s distinction between research programmes based on ‘value’ and ‘exchange’ (2004), this paper argues for a ‘production’ paradigm based on the tradition of Menger and Schumpeter. It is suggested that this production-based programme could use, as its starting point, Schumpeter’s (Wesen und Hauptinhalt der theoretischen Nationalökonomie, 1908) attempt to mediate in the Methodenstreit by arguing that different types of economic problems require theories at different levels of abstraction. This opens up for ‘theorising by inclusion’, an approach combining key elements both of traditional German economics and of Austrian economics in the Mengerian tradition.     

The ‘curse of dimensionality’ resolved: The effects of climate change and trade barriers in large dimensional modelling

Solving large scale optimisation problems over space and time quickly generates a computational impasse, termed the ‘curse of dimensionality’. This severely limits the practical use of economic models, especially for determining the effects of climate change and protectionist trade policies. In this paper, we employ an innovative approach to solving (otherwise unsolvable) large scale systems through the use of parallel processing methods and a proper ordering of variables and equations in a ‘Nested Doubly Bordered Block Diagonal’ form. We illustrate how the approach can be used to solve an intertemporal CGE model with more than 500 million equations. Using existing damage functions, the framework allows us to determine the impact of climate change on long-run economic growth for 112 countries as a result of the effect of sea-level rise on land endowments, variation in crop yields and productivity and shifts in the demand for energy and transportation. We also compare our solution to more common (and smaller dimensional) recursive methods, in terms of both the economic effects of climate change and potential increases in trade barriers, showing the power and efficiency of our computational approach and parallel processing routine.     

Citation performance of thirty keywords in economics

Keywords of a publication may be indicative of its subfield. In this paper, we analyse citation performance of thirty keywords to understand differences in intra-field citation performance in economics. First, citation performance of publications that contain a certain keyword is computed. Then, adjustments are made for the publication year and the publishing journal. Keywords such as ‘growth’, ‘inference’ and ‘institutions’ have above average citation performance in all adjustments. Lastly, the trend in the frequency of publications that contain a certain keyword is explored.