An Archaeology of Adam Smith's Epistemic Context

Abstract

Adam Smith played a key role in Foucault's archaeology of political economy. This archaeology, which Foucault accomplished in The Order of Things, is the focus of this article. Foucault may have disagreed with the writings of the classical political economists but he widens our perspective through new possibilities of understanding. It is very illuminating to understand Smith's thinking as following a discursive practice that economic thought shared with the knowledge of living beings (natural history) and language (grammar). Foucault's archaeology highlights some ontological and epistemological conditions that shed light on some of the pillars of Smith's thinking: the centrality of exchange, the division of labour and the labour theory of value. The proximity between Newton and Smith is also examined in ontological and epistemological terms which can be understood through an investigation of that interdiscursivity practice. Beyond testing Foucault's considerations, our aim is to demonstrate their potential for the current scholarship of Smith's works. Foucault's archaeology of knowledge offers a range of elements that warrants greater analysis by historians of economic thought.     

Rational vs historical reconstruction – a counter-note on Signorino's note on Blaug

Heckscher's 1919 article originated the Heckscher-Ohlin theory of international trade. In 1987 Carl Uhr pointed out that Heckscher in 1928 made another major contribution to economics in a German-language article on ‘intermittently free goods’, presenting ‘a theory of imperfect competition nine years ahead of that by Joan Robinson and Edward Chamberlin, and a discussion of collective goods not priced by the market’. This paper summarizes the salient ideas of Heckscher's article. It evaluates its merits, originality and significance for the history of economic thought, and how it fits into the ‘revolutionary’ developments of the theory of imperfect competition in the 1930s.     

An Epistemological Reflection on Social and Solidarity Economy

Social and Solidarity Economy (SSE) is emerging as life affirming solutions to the global crises through the multiple ways people locally reinvent economic life on the margins of the capitalist system based on values of solidarity, reciprocity and sustainability. Although the SSE builds on a strong foundation of real practices and institutions of economic transformation as the way forward for us, this paper argues that this world of practice is in need of its theory to frame discourses and engage with the bigger picture with confidence as an alternative to the dominant economic paradigm. The author argues that the orthodox economics, with its ontological construct of the homo economicus, Cartesian dichotomy and logical positivist epistemology severely constrains our abilities to understand and appreciate economic alternatives based on ‘other’ rationalities. Hence, there is a need for an epistemological revolution to construct a coherent theoretical framework from the wreckages of the neoclassical economics for the SSE. This paper seeks to outline the basic structure and the key elements of the ontological and the epistemological framework for this ‘science-in-the-making’ as a step to stimulate further debate for a paradigm revolution.     

Jules Dupuit: A sesquicentennial tribute to the founder of benefit-cost analysis

Abstract

This article examines Slutsky's 1927 paper ‘The Summation of Random Causes as the Source of Cyclic Processes'. It provides an in-depth analysis of both the content and the reception of Slutsky's groundbreaking contribution by distinguishing between a ‘real' and a ‘statistical' interpretation of Slutsky's two related hypotheses, and also discusses the context of composition of the paper in the Moscow Conjuncture Institute. It then places the 1927 paper in the context of Slutsky's other work in economics and statistics, and highlights some lines of influence that have emanated from it. Various latent ambiguities in Slutsky's ideas are considered.     

The New Economics of Labor Migration: Beware of Neoclassicals Bearing Gifts

Abstract

Until the emergence of the New Economics of Labor Migration (NELM) in the 1980s, migration scholars were largely divided into two main theoretical camps, viz. the neoclassical and historical-structural approaches to migration. Against this background, the NELM presented itself as a theoretical ‘third way’ between the two latter approaches, and purported to reconcile agency and structure in a way previously unachieved by either of them. While those pretensions gained a fair amount of acceptance and popularity, this paper argues that they are fundamentally misleading, and that the NELM is little more than a slightly more sophisticated avatar of the neoclassical approach to migration, whose fundamental weaknesses it has not, and cannot, shed. This paper further argues that, in so doing, the NELM effectively constitutes migration theory's own instance of economics imperialism, i.e. the attempt to advance the fundamental tenets of neoclassical economics (methodological individualism and the assumption of optimizing rationality) within the context of the study and interpretation of various social phenomena. In order to put forth these arguments, this paper provides a summary presentation of the standard neoclassical theory of migration, the historical-structural heterodoxy and the NELM; highlights why it is that the NELM should be regarded as a ‘reworked’ version of the neoclassical theoretical framework and discusses its inception in the context of the ‘information-theoretic revolution’ in economics; and argues for a new and improved ‘historical-structural synthesis’ as a more satisfactory alternative to both the NELM and the standard neoclassical theory.     

Foucault,Weber and the history of the economic subject

Abstract

The present paper begins with a presentation of Foucault's lectures on economic issues. Departing from his previous views on government, Foucault offered a new approach to eighteenth-century liberalism and neo-liberalism, interpreting these political theories in terms of what he called biopolitics. Then the paper endeavours to demonstrate that the line of reasoning pursued by Foucault coincides with that found in Weber's sociology of religion. In as much as Weber studies the relation between the religious and the economic, the paper draws a parallel between the Weberian concept of ‘life conduct’ and the concept of ‘technique of the self’ advanced by Foucault in order to study the moral foundation of the economic agent.     

Interrogating Sickonomics,from Diagnosis to Cure: A Response to Hodgson

Hodgson's review of our books argues against us that marginalism neither adopted methodological individualism nor excluded the social from economics. Thus, he finds a partial solution to sickonomics in abandoning the term methodological individualism and using both structures and individuals as analytical starting point(s), revisiting Marshallian marginalism dressed up in socio-institutional clothing. He also denies any relationship between the current malaise in economics and the marginal revolution, as we claim, focusing exclusively on institutional developments since the Second World War. We show Hodgson is either partial or wrong on all of these counts. Firstly, his alternative to methodological individualism is untenable. Secondly, institutions, although implicitly present in Marshallian and Walrasian economics, play no substantive analytical role and as such are superfluous. Finally, although institutional factors help explain the sickness of modern economics (in addition to socioeconomic, ideological, political, and intellectual factors), the intellectual roots of this decay lie in the conceptual framework established around the marginal revolution.     

The new right and the US economy in the 1980s: an assessment of the economic record of the Reagan administration

This paper discusses the new-right ideas underlying the victory and implementation of ‘Reaganomics’ and examines the economic record of the Reagan administration. Given the preeminence of supply-side economics in the USA in the 1980s, and the supply-side leanings of the Reagan government, attention is focused mainly upon supply-side ideas, policies and claims: although some assessment of monetarist propositions is also provided. In addition to the evaluation of new-right claims, however, a broader assessment of the Reagan administration's record is also undertaken which deals, inter alia, with inflation, growth, unemployment and the ‘twin deficits’. Within this evaluation the social impact of Reaganomics is highlighted as a counterpoint to the claimed economic successes of the Reagan years.     

Value,sign, and social structure: the ‘game’ metaphor and modern social science

This exploratory paper, part of continued work on the history of game theory, seeks to illustrate certain links between von Neumann's theory of games and contemporaneous ideas in other fields. In particular, we claim that the emergence of the analytical metaphor of the ‘game’ in economics can be viewed as part of a general reconceptualization of theory in a range of disciplines. That methodological reconstitution may be described as the emergence of a Structuralist view, an approach to theorizing which treated its object – be that a text, a kinship arrangement, or an economy – as a self-contained system, with its own internal logic, subject to its own ‘laws’. In particular, individual texts, or observed social and economic arrangements, are now viewed as variations on an underlying logical theme, on a structural invariant. The latter is to be uncovered, in the case of linguistics, through the analysis of phonemes; in kinship analysis, through the rules governing the exchange of women because of the incest taboo; in von Neumann and Morgensterns game theory, through the possibilities for equilibrium coalition formation, based on the stable set. There thus emerged a tendency, across the intellectual spectrum, towards seeing things in combinatorialterms. Theoretical coherence was to be found in examining how objects ‘held together’ rather than analysing where they ‘came from’: nineteenth-century concerns with history, evolution and individual psychology give way to a distinctly modern emphasis on synchronic, formal structure, on analogical reasoning. Atomism gave way to holism, and formal elegance superceded immediate empirical content. Recourse to the metaphor of the ‘game’ was constitutive of this shift, which we examine by referring to Saussures General Course in Linguistics, to Formalism in mathematics and literary analysis, to Lévi-Strauss's analysis of kinship and myth, and to von Neumann and Morgenstern's Theory of Games and Economic Behaviour.     

The age of the universal consumer: a reconsideration of Ricardo's politics *

This paper reconsiders Ricardo's political thought, its relationship with his political economy and, more generally, Ricardo's connection with the ‘philosophical radicalism’ of Bentham and James Mill. It is arguedinter alia, that Ricardo's politics were utilitarian and individualistic; that he developed a notion of a shared, homogeneous interest; that he believed that individuals should know their ‘real’ interests as a condition for their suffrage; and that he subscribed to a doctrine of virtual representation. It is also argued that Ricardo was considerably less ‘radical’ in his political views than some previous commentators have recognized.     

Civilisations and Their Discontents: Political Geography and Geopolitics in the Huntington Thesis

This article considers the place of political geography and geopolitics in Samuel Huntington's celebrated work Clash of Civilizations. It is argued that Huntington's engagement with geography is fundamentally ambivalent. On the one hand, he frames his entire analysis as a form of what he calls political geography, and he invokes geographical factors in various ways throughout the entire text. At the same time, however, he explicitly discounts the significance of space or territory in the civilisational framework that he depicts. An analysis of Huntington's inconsistency in this regard contributes to a broader critique of his overall premises, logic, and conclusions. Beyond this, it provides insight into the uncertain position of geography more broadly in contemporary discourses of international relations and international security. Ultimately, I suggest that the ambivalences in the Clash of Civilizations are indicative of certain ‘fault lines’ — to borrow from Huntington's own lexicon — that have been characteristic for the American security imagination across much of the twentieth century.     

Bentham and Owen on entrepreneurship and social reform

Abstract

Jeremy Bentham invested an important amount of money in New Lanark's cotton mills, which at that time were run by Robert Owen. However, apparently Bentham never took a serious interest in the organisation of such a successful entrepreneurship and new model society, although it seemed to fit in with Bentham's ideas of the entrepreneur (‘projector’) and also with Bentham's ideas on social reform, seeking the greatest happiness of the greatest number. This article explains how Bentham's share in New Lanark came about. It tries to ascertain whether the New Lanark experiment and Owen's ideas fit Bentham's managerial theory and ideas on social reform so as to understand why Bentham did not pay more attention to Robert Owen's practice.     

Critical Realism as a Basis for Economic Methodology: A critique

This paper considers the claim that critical realism provides a convincing critique of mainstream economics and offers a sound methodological basis for an alternative approach. It argues that critical realism presents a tendentious definition of positivism and a characterisation of mainstream economics that is misleading, and that it misrepresents the nature and purpose of the work of Hume and modern Humean philosophers. It also argues that critical realism's bold ontological claims lack epistemological support. The paper concludes that critical realism does not provide a compelling basis for economic methodology.     

Jevons's Theory of Political Economy and the ‘Marginalist Revolution’ *

Very many statements have been made about the (non-)existence and characterisation of the ‘marginal revolution’ but it is urged here that detailed study of the relevant texts is far more valuable than the making of grand statements about such matters. In particular, a close reading of Jevons's Theory of Political Economyis proposed as an antidote to over-easy generalisation. Jevons by no means rejected all elements of classical theory. He did not propose a catallatic revolution; he attributed such an emphasis to earlier authors and himself stressed the role of production. It is shown that Jevons was very aware of the necessarily general equilibrium nature of his theory but that he was simply not able to cope with it satisfactorily; it is suggested that this explains, at least in part, his fluctuating and apparently inconsistent statements relating utility and labour to value. Jevons certainly attempted to sketch a complete marginal productivity theory of distribution, even if he was far from successful in providing one.     

Samuelson’s operationally meaningful theorems: reflections of E. B. Wilson’s methodological attitude

This paper sheds new light on Samuelson’s early methodology as presented in his Foundations of Economic Analysis (1947) by reflecting on the similarity between his mathematical economics and Edwin B. Wilson’s mathematics. Wilson was Samuelson’s professor of advanced mathematical and statistical economics; he was also a protégé of Josiah Willard Gibbs. Wilson defined mathematics as a language that consisted of three interconnected aspects: postulational, axiomatic, and operational. In his Foundations, in a Wilsonian style, Samuelson wrote in the opening page, ‘Mathematics is a Language’ and claimed that he offered operationally meaningful theorems. In this paper, it is argued that these maxims embodied Wilson’s approach, which framed Samuelson’s mathematical and statistical thinking around 1940 and which led him to present his work as being mathematically, theoretically, and empirically well founded. Wilson’s and Percy Bridgman’s operational methodologies are also compared and Wilson is presented as a mediator between Bridgman and Samuelson.     

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.     

J.A. Schumpeter and T.B. Veblen on economic evolution: the dichotomy between statics and dynamics

At present, the discussion on the dichotomy between statics and dynamics is resolved by concentrating on its mathematical meaning. Yet, a simple formalisation masks the underlying methodological discussion. Overcoming this limitation, the paper discusses Schumpeter's and Veblen's viewpoint on dynamic economic systems as systems generating change from within. It contributes to an understanding on their ideas of how economics could become an evolutionary science and on their contributions to elaborate an evolutionary economics. It confronts Schumpeter's with Veblen's perspective on evolutionary economics and provides insight into their evolutionary economic theorising by discussing their ideas on the evolution of capitalism.     

A coming ‘Magnesian’ age? Small states,the global system,and the international community

Since Plato, we have considered that the ideal polis, or political community, is the small state, akin to the idyllic ‘Magnesia’ of the Laws. The Platonic ideal, however, generally has been considered unrealistic. Even in the ancient world, the Alexandrine model ‐ an expanding, pluralistic network of large trading cities under a single aegis ‐ came to contradict it. Subsequent history, especially the imperialism of the nineteenth century which swallowed up many small polities around the world, seemed to prove that only large and powerful entities were ‘fit’ to survive. Why, then, are there still so many small‐sized countries in the world today? Why is their number actually increasing? Decolonisation, the end of bipolarity, democratisation, trade liberalisation and the digital revolution are five factors that have given small states more freedom. Yet many are vulnerable, and the economics of their situations are precarious. The workings of the global system, particularly the globalisation of business, may harm them even while promoting their freedom. The international community, a large part of which is now in fact made up of small states, should be prepared to act, for the global public good as well as out of sheer political and also environmental self‐interest, to help safeguard the livelihood of the world's many and varied small states, whose ‘Magnesian’ venues and values can be of both functional and normative importance for mankind as a whole.     

What was wrong with the old institutional economics (and what is still wrong with the new)?

This paper is a comparison and critique of the old and the new institutional economics, with principal focus on the former. The paper argues that the old institutional economics (OIE) lacks methodological consistency and overall persuasiveness because of the preconceptions it took from the philosophy of pragmatism and its late nineteenth-century attitude towards science. The paper starts from the methodological problem posted by Thorstein Veblen; argues that the OIE was never able to solve that problem; and then poses a resolution of Veblen's dilemma in terms of a ‘benchmark’ programme useful in appraising both the OIE and the NIE. The paper also argues that the most appealing areas of OIE rhetoric–institutions and evolution–do not distinguish that programme from the NIE. What distinguishes the OIE are the less appealing doctrines of holism and instrumental valuing. The paper closes with a brief critique of the neoclassical core of the NIE.     

Moral philosophy and economics: the formation of François Huet's doctrine of property rights

François Huet (1814–1869), Professor of Philosophy at the University of Ghent, is known for his attempt to reconcile Christianity with socialism in Le Règne Social du Christianisme (1853). The book clearly belongs to a distinctively Belgian tradition of ‘liberal socialism’. Drawing upon archival material, we try to clarify the origins of Huet's theory of property rights. We focus on two intimately related questions: (1) Have the core ideas formulated by Huet in Le Règne been expressed and discussed before the publication of the book? (2) In what sense have reflections upon the science of economics contributed to Huet's views?