Interpenetration Versus Embeddedness

A bstract .   The economy and economics are important fields in Talcott Parsons's work. Parsons's contributions on this subject were, however, mostly critically received in the new economic sociology. In this article, main points of criticism of Parsons's economic sociology will be discussed and the question asked whether the importance of Parsons's works in economic sociology was adequately treated. It will be demonstrated that the critical assessments was based for the most part on theoretical conceptions Parsons developed during his structural-functionalist period. Hence the assessments neglected to discuss the theory of expressive-symbolic communication of affect that Parsons developed in his later systems-functionalist period. However, precisely these later theoretical developments correlate directly with the concept of social embeddedness as a key concept in the new economic sociology. A stronger linking with this development in Parsons's theory could bring economic sociology closer to finding a foundation in action theory, which has been missing up to the present.     

Economics, Sociology, and the "Professional Complex"

A bstract .   This article discusses the relationship between economics and sociology in the context of Parsons's analytical theory of action and systems and his criticisms of orthodox and institutional economics. The article also addresses his view of the importance of the professions to an understanding of the nature of advanced capitalism. The professions are discussed as both an illustration of his theoretical argument and a substantive problem that stimulated the development of his theory. The "professional complex" is an emergent phenomenon in capitalism that modifies its operation and points to the complexity of systems of social action that require to be analyzed without being reduced to one of their elements. This reductionism is evident in orthodox economic theory and also in the more sociologically-oriented approach of institutional economics. Parsons argues that each is a form of what, following Whitehead, he calls the "fallacy of misplaced concreteness." Although Parsons offers a significant critique of dominant approaches in economics, major flaws within his own theory create the appearance that he has simply carried over the deficiencies of orthodox theory into his own general statement of theory. These flaws contribute to major misunderstandings of Parsons's project and, therefore, indicate continuing problems in the relation between economics and sociology.     

Is entrepreneurship a virtue?

Entrepreneurship is rarely (if ever) discussed by virtue ethicists. And economists analysing entrepreneurship have rarely described it as a virtue. Entrepreneurship is indeed a virtue and the entrepreneur can be seen as the creative counterpart of Aristotle's ‘Magnificent Man’, the virtuous possessor of wealth. But entrepreneurship is also a virtue for anyone who is economically active. By reviewing analyses of entrepreneurship by economists such as Cantillon, Schumpeter, Knight, Baumol, Kirzner and Casson, particular features of entrepreneurial practice are identified from which characteristic virtues (and vices) are isolated and analysed. The characteristic features of the vicious Entrepreneur (or crooked businessman) are also described.     

The Marginalists Who Confronted Land

A bstract .   Although the neoclassical turn in economics demoted land as a factor, important economists of neoclassical thinking, from neoclassical predecessors such Hermann-Heinrich Gossen through figures such as Leon Walras, did view land as a distinct factor of production. Walras, in particular, favored the use of land rent for public revenue. This paper examines the treatment of land by several neoclassical and Austrian economists and shows how, although the neoclassical school today has managed to bury land, some of the key figures who founded these schools did confront land as a factor. The burial of land is thus not inherent in neoclassical economics, but is a historical development that can be reversed.     

Religion and International Trade: Does the Sharing of a Religious Culture Facilitate the Formation of Trade Networks?

A bstract .   Despite interest in the influence of religion on economic activity by early economists like Adam Smith, modern economists have done little research on the subject. In light of the apparent religious fervor in many parts of the global economy, economists' seeming lack of interest in studying how religious cultures enhance or retard the globalization of economic activity is especially surprising. This article makes a contribution toward filling this void by examining how religion affects international trade. Specifically, we examine whether the sharing of religious cultures enables the formation of exchange networks that can overcome the failure or nonexistence of other social and economic institutions necessary for completing complex international transactions. We apply an expanded gravity model of international trade to control for a variety of factors that determine trade, and we use two recently developed regression methods, scaled OLS and nonlinear least squares, to exploit the model to its fullest. We find that the sharing of Buddhist, Confucian, Hindu, Eastern Orthodox Catholic, and Protestant cultures by people in different countries has a significantly positive influence on bilateral trade, all other things equal. The sharing of Roman Catholic culture has a significantly negative influence on bilateral trade, and the sharing of Islamic and Judaic cultures neither promotes nor discourages international exchange. These results suggest that some religious cultures are more conducive than others for forming international trade networks.     

Collateralized Social Relations: The Social in Economic Calculation

Traditionally, economists have viewed social relations as "friction" or "impediments" to exchange and have excluded social relations from their analyses by assuming autonomous actors. Recently, however, a number of scholars—economists, sociologists, anthropologists, and other social scientists—have begun to discuss the numerous ways in which social arrangements both prompt and channel economic activity. Rational choice theory, social capital and network analysis, and agency and game theory, are among those approaches that consider the effects of social relations on economic action. In this paper we extend that discussion by arguing that social relations can function as "collateral" or assurance that an economic transaction will proceed as agreed by the parties involved. We review recent microeconomic theories and conjecture how they might be developed following this observation, which is derived from sociological and anthropological studies of economic action and organization.     

Hermeneutics and the Heidegger = Schumpeter Theses

This paper is a part of an attempt to develop an economic philosophy of ontology based on the Continental tradition of hermeneutics. Ontology explores the meanings of entities as the objects of knowledge to posit the orientation of knowledge. Heidegger developed hermeneutical ontology, focusing on the self-understanding of Dasein (human beings), which consists of the "projection" of its possibilities into the future and the "thrownness" of it into the restrictions by the past history. Dealing explicitly with the pre-structure of knowledge, hermeneutics opens the perspective of knowledge much broader than permitted by the analytical tradition of philosophy. It is the contention of this paper that Schumpeter from the Austrian subjectivist circle could cope with this approach in social science by the use of the concepts of "innovation and tradition" or "creation and routine." The paper discusses the relationship between Heidegger and Schumpeter on various philosophical issues and derives what might be called the Heidegger = Schumpeter theses.     

Entrepreneurship,income distribution and economic growth

Traditionally different factors and variables have been considered in the economic growth models. Following Solow’s model, economists considered physical capital and technology during 1950s–1980s. With the introduction of endogenous growth models, new forms of capital were introduced in the production function; human capital, public capital and more recently social capital. However, the consideration of qualitative variables is necessary to improve the economic growth analysis. The improvement of statistical information has favored their introduction in the economic growth models. Recently, “entrepreneurship” concept has been considered in this type of analysis. Entrepreneurship considers the capacity and ability to create new business and production activity. It is an activity not an occupation. Some authors like Schumpeter have included it in their models and they have analysed its effects on economic growth. But it is also necessary to include the role of social climate, that in a schumpterian way it could be represented by income distribution. The main objective of the paper is to analyze the relationship between entrepreneurship, income distribution and economic growth following the ideas developed by Schumpeter and we will contrast them from a empirical analysis using the GEM (Global Entrepreneurship Monitor) data.     

Schumpeter,Commons, and Veblen on Institutions

This article compares Schumpeter, Veblen, and Commons with regard to institutions setting up the paradigm of institutional evolutionary economics. Their theories are of a complex nature, and as such, it is very difficult to situate them in a clear‐cut tradition. The main similarity is their opposition to the thesis that market economy is an independent and self‐regulating system, in an attempt to integrate economic, sociological, and political perspectives with regard to the functioning of the system. Also, change per se is in contrast to the notion of equilibrium. Of course, despite the parallels, the existence of differences is undeniable.     

Henry George's Ingenious Tax

A bstract . Henry George (1839–1897) has left an intellectual legacy which is shrouded under a cloak of controversy. "Professional economists who focused attention on the single-tax proposal and condemned Henry George's teaching, root and branch, were hardly just to him." (Schumpeter 1954, p. 865). This essay tries to do justice to Henry George from the point of view of economic theory and relevant economic practical questions in 1997. The single tax proposal is looked at from the point of view of constitutional economics, and the wider applicability of Henry George's basic notions is emphasized.     

Is There a Free‐Market Economist in the House? The Policy Views of American Economic Association Members

A bstract .   People often suppose or imply that free-market economists constitute a significant portion of all economists. We surveyed American Economic Association members and asked their views on 18 specific forms of government activism. We find that about 8 percent of AEA members can be considered supporters of free-market principles, and that less than 3 percent may be called strong supporters. The data are broken down by voting behavior (Democratic or Republican). Even the average Republican AEA member is "middle-of-the-road," not free-market. We offer several possible explanations of the apparent difference between actual and attributed views.     

The role of property rights in the positive theory of monopoly

The traditional approach to monopoly posits a dead-weight loss, a classic inefficiency, wherever market power is discovered. Critics such as Joseph Schumpeter argue that such dead-weight losses are inconsequential in a dynamic setting, where long-run trade-offs are said to dominate them with postive sum gains, which are also claimed to flow from market power. Yet further examination reveals that even the static monopoly argument showing Pareto inefficiency is not due to a positive analysis but is an outcome determined by the normative interpretation of the monopolist's property rights. The costs which a firm possessing market power has in expanding its output are not considered as legitimate for inclusion in our analysis. (In other markets, traders are sometimes allowed to collect such rents without being labeled as inefficient—for instance, in the labor market.) The interesting questions become: Why have economists adopted this particular normative view of property rights? Is public policy thereby well served?     

Offshoring in the New Global Political Economy

abstract    This essay challenges claims by economists and management scholars that 'offshoring' is simply another form of trade with mutual benefits. I argue that reducing wages through offshoring leads to wealth creation for shareholders but not necessarily for countries and employees, and that many displaced workers have difficulty 'trading up' to higher skilled jobs. Offshoring is a new phenomenon that entails the organizational and technological ability to relocate specific tasks and coordinate a geographically dispersed network of activities. It decouples the linkages between economic value creation and geographic location. The result is the creation of global commodity markets for particular skills and a shift in the balance of market power among firms, workers, and countries.     

Keeping Land in Capital Theory: Ricardo, Faustmann, Wicksell, and George

A bstract .   Most economists today live in a two-factor world: There is just labor and capital. Land, so central to classical political economy, has been swallowed into capital and "disappeared." This paper surveys some of the better historical treatments of land and capital, their interrelations, and how they support modern Georgists and Greens who want land to reappear.     

What Price Drug Use? The Contribution of Economics to an Evidence‐Based Drugs Policy

Abstract.  This paper presents a review of the recent economics literature in the area of illicit drug use. Particular attention is paid to the economics of addiction and the rational addiction model, the welfare economics framework for analysing the social costs of drug use, and the attempts that have been made by economists to evaluate recent or proposed policy interventions. A dominant theme in this review is the problem of poor data availability. This is particularly true when it comes to implementing the Rational Addiction model, but it is also apparent in the literature on estimating the costs of illicit drug use to society as a whole. One of the main conclusions of this review is that until recently public policy has not been particularly influenced by research carried out by economists. It is not clear whether this is because economists have had to grapple with inadequate data, and hence their conclusions are couched in uncertainty, or whether it is because drugs researchers have assumed a very limited role for economists in their analysis.     

The Global System of Finance

A bstract .   In the last decades, revolutionary changes in financial markets, instruments, and institutions have stimulated empirical and theoretical investigations into the interaction of the financial and the "real" side of economic systems. While a considerable body of empirical investigations seems to provide evidence of positive correlations between stock market development and economic growth, there is no consensus in other social sciences as to whether there are two-way linkages, and if so, how to conceive a possible mechanism of interaction. Particularly, the hypergrowth and ubiquity of financial markets has triggered controversial debates on how to understand today's economic landscape. With the objective of clarifying the relationship between finance and economy, this article restructures the present debate through the lenses of Talcott Parsons's and Niklas Luhmann's theories of social systems. Basic system-theoretical ideas on social aspects of finance and economy as well as on uncertainty and risk hint at new insights into the global system of finance that might go far beyond explanatory models of causality.     

Pareto, Parsons, and the Boundary Between Economics and Sociology

A bstract .   Recent discussions of the separation bUniversity of Bremenetween economics and sociology in the United States highlight the way Talcott Parsons used Vilfredo Pareto's Trattato di Sociologia Generale to propose that economics study logical actions and sociology study nonlogical actions. This article argues instead that in Pareto's treatise: (1) sociology is a synthetic discipline concerned with the study of human society in general; (2) human behavior is nearly always logical from a subjective point of view; and (3) sociology studies both logical and nonlogical behavior judged from an objective viewpoint. Thus, Pareto is an important intellectual ancestor for economic sociology.     

In the Shadows of Vanity: Religion and the Debate Over Hierarchy

A bstract .   Sandra Peart and David Levy emphasize the role of economists in their excellent history of the debate between philosophers and scientists and economists and evangelicals over race and hierarchy in 19^th-century Britain. Evangelical Christians have a role as allies with economists, and also Jews, but as a racial rather than a religious group. Religion, which has much to say about what it means to be human, remains in the shadows of Peart and Levy's account. The purpose of this paper is to make a start at casting light on the role of religion in the debate over race and hierarchy in 19^th-century England.