Overhead Capital: A Study in Development Economics

Veblen's and Commons's contributions are outlined and related to the approaches to economics and political actions over the years of the author. Commons's philosophy and pragmatic contribution to economic and political institutions in order to help create decent living conditions for wage-earners within capitalism are reflected in the author's rethink in the late 1970s of what was possible for a social democratic government in Australia to achieve. The implication of John Kenneth Galbraith's example and writings on the war in Vietnam are linked to the author's actions in Australia during Australia's involvement in the war. The relevance of Veblen's damning critique of J.B. Clark's views on capital theory for the arguments of the Cambridge - Cambridge controversies in capital theory of the 1950s-1970s, first noted by Joan Robinson, are set out. Veblen's biting analyses of the nature of capitalism in his major writings are argued to be even more relevant now for the modern world of haves, have nots and have lots.     

Alternative Perspectives on Post-Keynesian Price Theory

We present an overview of recent developments in methodological and epistemological discussion in post-Keynesian work. We use these developments as a basis for judging various contributions to the post-Keynesian literature on pricing, in particular the arguments presented by Lee in recent issues of this journal, whilst acknowledging the positive contribution of Lee's work, we argue that his critique of post-Keynesian pricing theory is flawed and that his 'empirical pricing model' is consequently ill-founded.     

Institutionalism,Critical Theory,and the Administered Society

Paul Krugman recently suggested that John Maynard Keynes helped economists study and resolve mass unemployment at a time when few of them could understand the problem and institutionalists seemed unable to articulate a clear policy strategy. This article responds by outlining John R. Commons' case for full employment with liberty and his three-part strategy (addressing money, people and politics) for curing joblessness while saving capitalism. Commons' argument and recommendations offer insights that extend beyond Keynesian economics in important ways, and his contributions have special relevance today in light of the recent global financial crisis and still ongoing Great Recession.     

Introduction - Children and Family Policy: a Feminist Issue

Policy makers increasingly rely on theories of social capital to fashion development interventions that mobilize local social networks in the alleviation of poverty. The potential of such theory lies in its recognition of the social dimensions of economic growth. This recognition has inspired some innovative approaches to development, such as the now-popular microfinance model. In assessing the implications of these recent developments for feminist objectives of social transformation, this paper evaluates prevailing ideas about social capital (rooted in rational choice theory) against the grain of three alternative approaches: Marxian social capital theories ( À la Pierre Bourdieu), neo-Foucauldian governmentality studies, and my feminist ethnographic research on the social embeddedness of economic practice in a merchant community of Nepal. The paper concludes by bringing these critical insights to bear on possibilities for designing microfinance programs - and practicing a kind of development more generally - that could engage women's solidarity to challenge dominant gender ideologies.     

The notion of private information in a modern perspective: a reappraisal of Hayek's contribution

Hayek's critical attitude towards Walrasian modelling was based on informational considerations. In his view, a meaningful notion of equilbrium has to deal with the consistency of agents' plans which information is dispersed throughout the economy. He emphasized that only in this context could the role of market prices as aggregators of information be correctly analysed. Recent developments in general equilbrium theory with rational expectations have taken up the issue formally. In this paper, Haek's main ideas about the competiitive mechanism are compared with these recent results. It is argued that Hayek's notion of private information is different from that used in modern equilibrium theory, not only because of its dynamic content, as many critics observed ex post, as is usually in a general equilibrium framework. This issue of whether modern notions of private information, namel that used in conract theory, are good substitutes for Hayek' notion of personal knowledge is also examined in detail. From this analysis, it is possible to conclude that Hayek's notion of equilibrium neither entails Pareto optimality prperties nor full informational efficiency.     

Sraffa: the theoretical world of the ‘old classical economists’ *

Sraffa's mature work is seen here as a re-discovery and resumption of the ‘submerged and forgotten’ approach of the ‘old classical economists from Adam Smith to Ricardo’. Wages determined by broad economic and social forces entail there product prices determined independently of demand and supply functions. Some main questions raised for the modern economists by this radical reorientation of economic theory are then considered in order to conclude that it is aginst that background that Sraffa's mature work should be set with its three main contributions, of a rediscovery of the approach, of a complete and transparent solution of the problems of price determination it raises, and of its application to the critique of neoclassical theory. Among several developments originating from Sraffa's seminal work, two are singled out for mention: (i) the possibility of deficiencies of aggregate demand in the long period no less than in the short one; this follows naturally from the abandonment of the neoclassical theory of distribution, of which the role of the interset rate in equilibrating savings and investment is a corollary; (ii) the question of the distribution of the surplus between wages and profits in a modern economy where wages are no longer confined to subsistence.     

Epistemology and the tasks of feminist economics

This paper examines the implications of current epistemological debates for the work of feminist economists. Feminist economists must acknowledge (in accordance with recent developments in the study of science) that (a) inquirers can never be certain whether claims about the world are true; (b) scientific inquiry is permeated with “internal” and “external” values; and (c) beliefs are affected by inquirers' social locations. But feminists should not, it argues, embrace the “relativist” stance of some postmodern thinkers, or reject the ideal of “truth,” or argue that beliefs are strictly determined by inquirers' identities and interests. It seeks to outline an epistemological “middle ground” for feminist economics, between the extremes of exaggerated claims of certainty and a disempowering relativism.     

Hicksian monetary economics and contemporary financial innovation

In the light of developments in financial markets the very foundations of monetary economics are being re-evaluated. This article assesses the implications of Hicks's arguments in the context of such developments. It is suggested that Hicks's more recent monetary theory, with its ‘neo-Wicksellian’ or ‘Radcliffian’ overtones has a great deal to offer.     

Japanese Consumption,External Disequilibrium and their Statistical Measurement

Georgescu-Roegen's work is usually divided into two categories, his earlier work on consumer and production theory and his later concern with entropy and bioeconomics beginning with his 1966 introductory essay to his collected theoretical papers published in the volume Analytical Economics. Most economists usually praise his earlier work on pure theory and ignore his later work which is highly critical of neoclassical economics. Those economists sympathetic to his later work usually take the position that he “saw the light” and gave up neoclassical theory some time in the 1960s to turn his attention to the issues of resource scarcity and social institutions. It is argued here that there is an unbroken path running from Georgescu's work in pure theory in the 1930s, 1940s, and 1950s, through his writings on peasant economies in the 1960s, leading to his preoccupation with entropy and bioeconomics in the last 25 years of his life. That common thread is his preoccupation with “valuation.” The choices our species makes about resource use and the distribution of economic output depends upon our valuation framework. Georgescu-Roegen's work begins in the 1930s with a critical examination of the difficulties with the hedonistic valuation framework of neoclassical economics, moves in the 1960s to the conflict between social and hedonistic valuation, and culminates in the 1970s and 1980s with his examination of the conflict between individual, social, and environmental values. This paper traces the evolution of Georgescu-Roegen's thought about valuation and the environmental and social policy recommendations which arise out of his bioeconomic framework.     

Thinking Critically: The Case of Health Policy Research

In this paper, we focus upon the recent work of one of health policy's leading academics. We then explore policy developments and show that where 'mainstream' health policy analysis implicitly supports the managerialization of health services, our critical perspectives reveal the existence of four male power blocs: management, medicine as science, medicine as practice, and the academic discipline of political science. Finally we suggest how the use of our perspectives enhances the possibility for bringing about meaningful change in health policy.     

Agriculture in recent development theory

This paper is a critical review of recent contributions to the literature on agriculture in development theory. It considers and compares the main lines of advance made within neoclassical, neo-Marxian and structuralist approaches. Recent neo-Marxian and structuralist studies of agrarian development reveal that traditional agriculture is neither stationary nor efficient, that resource allocation cannot be separated from wealth distribution or production organization, that forms of surplus appropriation do not necessarily follow the dictates of efficiency, that the social relations of production may inhibit accumulation and determine the forms of technological change, that the state's role in primitive accumulation is more economic than explicitly coercive/political, and that political and macroeconomic constraints preclude a simple ‘get the prices right’ view of the intersectoral terms of trade. The thrust of these developments is to challenge both neoclassical and some orthodox Marxian formulations of agrarian development issues and add to the insights to be gleaned from a political economy of development.     

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.     

Militarism,Realism, Just War,or Nonviolence? Critical Geopolitics and the Problem of Normativity

Despite illuminating multiple modalities by which armed conflict is discursively justified, critical geopolitics can be criticised for providing a weak normative engagement with the social institution and practices of warfare. This has limited the impact of this school of thought outside of geography and critical security studies at a time when the ethics of military intervention have been prominent in public debate. This article explores the moral discourse of critical geopolitics through an examination of Gerard Toal's writings on Iraq and Bosnia. This scholarship is reviewed in the light of Coates's typology of major traditions of moral reflection on war – militarism, realism, just war theory, and pacifism/nonviolence. This analysis interrogates Toal's narratives, in which American military intervention was advocated in the Former Yugoslavia and opposed in Iraq. This suggests that rather than a thoroughgoing commitment to pacifism/nonviolence, or a blanket cynicism about American foreign policy, Toal's thinking includes an underlying attachment to some form of just war reasoning. However, its implicit and partial appropriation leads to a certain incoherence and selectivity that calls for further reflection. This presents a challenge to critical geopolitics. If it chooses to engage more explicitly with just war theory, its insights into identity and militarism could in turn inform a reworking of aspects of the theory, thereby facilitating critical geopolitics' engagement with wider public anti-militaristic modes of discourse. However, as this risks blunting the political potential of the project and repeating the mistakes of twentieth-century geopolitical thought, the paper concludes with a call for a wholehearted commitment to nonviolence.     

Critical survey. Endogenous growth theory: a critical assessment

A critical assessment is made of endogenous growth theory fromthe perspective of recent developments within economics as adiscipline. These include its increasing mathematical formalisation,its focus upon microfoundations, the casual use of econometricsto test models, and the incorporation of factors that have traditionallybeen outside mainstream economics. It is found that the theoryfocuses upon market imperfections and technological progressin a variety of ways, and reconstructs their impact upon themacroeconomy as a growth rather than as a level effect. Whilstthe growth rate is endogenised, this leads to the problem ofmultiple equilibria and extremely complex dynamics. The generalisationfrom exogenous growth theory is, however, associated with evenmore extreme assumptions and analytical distance from the socioeconomicprocesses of growth itself.     

The agents of production are the commodities themselves: On the classical theory of production,distribution and value

The paper discusses the classical theory of production, distribution and value as interpreted by Piero Sraffa in his published and unpublished work. The emphasis is on the characteristic features of the theory, including its objectivist orientation; its explanation of all property incomes in terms of the social surplus generated in production conceived of as a circular flow; and its treatment of wages either as paid out of social capital (given inventory wages) or as paid out of the surplus (a given share of wages). The latter concept is traced back to Ricardo's proportional wages.     

Critical survey. The new 'geographical turn' in economics: some critical reflections

Over the past few years, a new 'geographical' economics hasemerged, focused on the spatial agglomeration of industry andthe long-run convergence of regional incomes. Several leadingnames are associated with this 'geographical turn', includingPaul Krugman, Michael Porter, Robert Barro and W. Brian Arthur.This 'new economic geography', it is argued here, is neitherthat new, nor is it geography. Instead, it is a reworking (orre-invention) - using recent developments in formal (mathematical)mainstream economics - of traditional location theory and regionalscience. As such it is quite opposed to, and difficult to reconcilewith, the work on regional development and industrial agglomerationbeing carried out in economic geography proper.     

The Economic Contributions of James J. Heckman and Daniel L. McFadden

This paper analyzes the economic contributions of Daniel L. McFadden and James J. Heckman, who were awarded the Nobel Prize in economic science in 2000. McFadden's analytical work on discrete choices and related theory brings economic tools to bear on policy questions that previously had not been empirically investigated. The multinomial logit and similar models developed by McFadden enable researchers to empirically model factors that affect individual choices (e.g. of travel mode, occupation or employment, and residential location) with discrete outcomes. Heckman's research on selective samples demonstrates the difficulty of achieving generalizable results in analyses of choice-based behavior. In addition, his work on the evaluation of social programs has challenged conventional beliefs about the infallibility of experimental evaluation results and explored the limits and potential of non-experimental methodologies in a range of social science applications.