Financial bubbles and their magic: asset price as a heroic journey in the financial markets

Author(s): Alexandru Bălăşescu,Jain Apurv / Language(s): English Issue: 1/2018

Why do financial crises appear unprecedented in spite of being a rather regular occurrence across countries and time? There are many answers from various schools of finance and economics, including Minsky’s financial instability hypothesis in which systemic stability endogenously results in instability. We explore the inclusion of observed human behavior in an endogenous framework by engaging with anthropological concepts such as myth, ritual and magic that structure and explain our behaviour, and by extending the concept of agency from human to non-human. We also point to the possibility of better understanding our position in the mythological cycle using the new social media data. The aim of the article is to offer a holistic framework of interpretation of causes and circumstances of economic crises, using the tools of economy, semiotics, and economic anthropology that would account for both the universality of these crises and for their particular occurrences that always seem unique.

Negative and positive liberty and the freedom to choose in Isaiah Berlin and Jean-Jacques Rousseau

Author(s): Stefan Collignon / Language(s): English Issue: 1/2018

Berlin has made the famous distinction between negative and positive liberty. For many liberals, negative liberty is modern individual liberty manifested in markets, while interference by the State is a form of positive liberty. Berlin was also repelled by Rousseau’s concept of the general will, which he considered as a form of collectivist holism. The paper argues that this philosophy is a mistaken interpretation of Berlin’s two concepts of liberty and of Rousseau’s general will. In a simple model of individual and collective choice under conditions of bounded rationality, it is shown that positive and negative liberty are interdependent. The collective choices made under positive liberty can be modeled as the stochastic version of Rousseau’s general will, provided that liberal democracy enables the conditions of free public deliberation. In that case, the individual freedom cherished by Berlin is compatible with positive liberty.

Classical economics must not become history

Author(s): Ion Pohoaţă,Delia-Elena Diaconaşu,Vladimir-Mihai Crupenschi / Language(s): English Issue: 1/2018

This paper is meant as a clear statement that things can no longer continue the way they have gone so far. If analyzed critically, the classical heritage, enshrined in fundamental rules and theories, the result of a massive abstraction effort, has not always been consolidated and developed properly in modern times. Therefore, compared to other sciences, economics has been losing ground, exactly where it should have been reinforced by those who serve it –, the economists. Its main core, the classical heritage, has been enriched, but the additions, knowingly or not, have in fact weakened and transformed it into a loose collection of feeble causalities and verbosity. It is imperative that such deviations be stopped. We suggest a two-step solution: a) an inventory of the elements that define the hard core of Economics; b) a review of the circumstances that show what happened with said hard core. The conclusions point to a necessary return to classical ideas.

Ecce Homo-Economicus? The Dr. Jekyll & Mr. Hide syndrome of the economic man in the context of natural resources scarcity and environmental externalities

Author(s): Panos Kalimeris / Language(s): English Issue: 1/2018

Indeed, the artificial entity ‘Homo-Economicus’ plays a central role in modern neoclassical economic theory. Maybe an illegitimate child of markets’ self-regulation doctrine and the emerging rationalism - professed by the post-modern realms of neoliberalism and the ongoing globalization process - this theoretical abstraction is promoted as a potential prototype of human behavior. It is firmly believed, that this individualistic, self-motivated, and above all, perfectly informed ‘entity’ could, theoretically, lead the economic system into profound balance between supply and demand, consumption and production, utility maximization, and so on. The present paper consists of a criticism to the mainstream prototype of Homo-Economicus, with further extensions to the neoclassical paradigm. Placing this criticism in the context of ecological economics, the paper argues that the notorious rationality of Homo-Economicus seems to be vanished in the deadlock of a futile race towards non-renewable natural resources depletion and increasing environmental externalities. Finally, a brief review of alternative theoretical frameworks and evidence from institutional and behavioral economics, delineates an emerging pressing request for a paradigm change.

Critical comments on the philosophical context of Ludwig von Mises’s ‘Human action’

Author(s): Alexandru A. Popovici / Language(s): English Issue: 1/2018

Mises’s work of ‘Human action’ is analyzed in relation to the methodological conceptions of his predecessor C. Menger and of his successor F. von Hayek. Also, it is placed in the continuation of one of his previous works and in contrast to one that followed it. Some of his ideas can be better understood in such a way, while others show themselves as contradictory. It results that his attempt to combine apriorism with scientific realism explains some of major difficulties of Mises’s argumentation.

Review of Tavasci, Daniela and Luigi Ventimiglia (eds.), Teaching the History of Economic Thought. Integrating Historical Perspectives into Modern Economics, Edward Elgar Publishing, 2018, hb, vi+150 pages, ISBN 978-1-78811-347-2

Author(s): George ŞERBAN-OPRESCU / Language(s): English Issue: 1/2018

Review of Max Haiven, Art after Money, Money after Art; Creative Strategies Against Financialization, London: Pluto Press, 2018, 279 pp., pb. £19,99, ISBN 978-074533824

Author(s): Georgios Papadopoulos / Language(s): English Issue: 1/2018

Editorial

Author(s): Valentin Cojanu / Language(s): English Issue: 2/2015

Collective beliefs and horizontal interactions between groups: the case of political parties

Author(s): Olivier Ouzilou / Language(s): English Issue: 2/2015

Groups matter in our ordinary folk psychology because a part of our social interactions is done with collective entities. In our everyday life, we indeed sometimes ascribe mental states to social groups as a whole or to individuals as members of groups in order to understand and predict their behavior. The aim of this paper is to explore this aspect of social interactions by focusing on the concept of ‘collective belief’ in a non-summative sense and, more precisely, on collective belief of a specific kind of group: the political party. How can the concept of ‘collective belief’ help to understand the interactions which involve these kinds of collective entities? After providing an epistemic description of political parties, this paper focuses on the collective belief in a non-summative sense. As Gilbert says, a group believes that p, if its members are jointly committed to believe that p as a body. It is argued, with the help of an example from the political history of France, that this view can enable us to understand the interaction between political parties. More precisely, it can help clarify the way in which a political party use the rational constraints on the party as a whole and/or the social and epistemic constraints on the behavior of the group's members in order to destabilize or weaken other political parties.

Work, recognition and subjectivization: some remarks about the modernity of Kojève’s interpretation of Hegel

Author(s): Richard Sobel / Language(s): English Issue: 2/2015

From the analytical point of view of Hegel's philosophical anthropology, in Kojève's interpretation, work is an existential structure through which the dual process of subjectification and socialization unfolds. For Hegel, however, this process is not taken for granted: its possibility is understood in terms of the culmination of man's conquest of humanity, taking as a point of departure the relation of mastery to servitude and the undertaking to transform this relation precisely from within the perspective of servitude. The goal of this article is to reconstruct the conceptual framework of this philosophical moment, to our mind an indispensible precondition for the apperception of our modern societies' functioning at the most fundamental level, to the extent that they consider themselves to be ‘work based societies.’

Expiration of private property rights: a note

Author(s): Walter E. Block / Language(s): English Issue: 2/2015

According to libertarian law, upon what occasions may a person’s private property rights in goods, commodities, in himself, be alienated from him? The present paper is an attempt to wrestle with this question. We consider abandonment, punishment, salvage, misplacement, liberation of property.

Ups’ and ‘downs’ in metaphor use: the case of increase / decrease metaphors in Spanish economic discourse

Author(s): Anca Pecican / Language(s): English Issue: 2/2015

The purpose of the present article is to analyze the use of evaluative metaphors in two economic discourse genres displaying different degrees of specialization: business media and the central bank report. The article points out the differences in terms of metaphor use between the two types of discourses ranging from lexical choices to the way evaluation is assumed. Metaphor use is also a result of specific textual goals. The research is intended to provide a detailed insight into matters related to hidden subjective content present in metaphors. The extended use of the lexical items in focus both in the media as well as in specialized discourse tends to generate readers’ over familiarization with them and consequently the possibility of value neutralization. That is why people are usually not aware of the opinion forming effects metaphors have in communication.

A review of the Granger-causality fallacy

Author(s): Mariusz Maziarz / Language(s): English Issue: 2/2015

Methods used to infer causal relations from data rather than knowledge of mechanisms are most helpful and exploited only if the theoretical background is insufficient or experimentation impossible. The review of literature shows that when an investigator has no prior knowledge of the researched phenomenon, no result of the Granger-causality test has any epistemic utility due to different possible interpretations. (1) Rejecting the null in one of the tests can be interpreted as either a true causal relation, opposite direction of the true causation, instant causality, time series cointegration, not frequent enough sampling, etc. (2) Bi-directional Granger causality can be read either as instant causality or common cause fallacy. (3) Non-rejection of both nulls possibly means either indirect or nonlinear causality, or no causal relation.

A brief history of international trade thought: From pre-doctrinal contributions to the 21st century heterodox international economics

Author(s): Carmen Elena Dorobăţ / Language(s): English Issue: 2/2015

The present paper outlines the development of international trade thought, from the pre-doctrinal contributions of Greek philosophers and scholastic theologians, through the theories of the first schools of economic thought, and up to modern and contemporary trade theories. I follow filiations of ideas in a chronological order, and show how theoretical investigation into the causes and effects of international trade—and the rationale for government intervention—has evolved over the last two centuries.

Review of Philip Mirowski, Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown, New York, Verso, 1st edition, 2013, ISBN: 978-1-781-68079-7, 384 pages

Author(s): Şerban Brebenel / Language(s): English Issue: 2/2015

Review of Abdul Azim Islahi, History of Islamic Economic Thought: Contributions of Muslim Scholars to Economic Thought and Analysis, Edward Elgar, Cheltenham (UK), hb, 2014, ISBN 9781784711375, viii+125 page

Author(s): Valentin Cojanu / Language(s): English Issue: 2/2015

Behavioural controversy concerning homo economicus: a Humean perspective

Author(s): Khandakar Elahi / Language(s): English Issue: 2/2014

In his monumental masterpiece, A Treatise on Human Nature, which explains the methodology of human reasoning concerning matters of fact and describes the roles that passions and morals play in it, Hume arrives at an enormously interesting maxim: An academic controversy cannot continue for long unless the disputants assign different meanings to the major terms employed in the debate. This theory has been applied in this paper to examine the behavioural criticisms about Homo Economicus (HE), the pivotal perception in the neoclassical microeconomic model.To achieve this objective, the paper discusses the origin and evolution of the concept, reviews behavioural criticisms, summarises the main tenets of Hume’s philosophy of human knowledge and finally examines the behavioural opinions from Hume’s perspective. The paper concludes that Hume’s theory convincingly explains the reason why the HE controversy is continuing for over half century- a fact that both the mainstream and behavioural economists are ignoring

Review of Cheryle Desha and Karlso ‘Charlie’ Hargroves, Higher Education and Sustainable Development: A model for curriculum renewal, London: Routledge, 2014, 268 pp., hb, $180.00, 9781844078592, pb, $49.95, ISBN 9781844078608

Author(s): R. Edward Di Collalto / Language(s): English Issue: 2/2014

Review of Ole Bjerg, Making Money: The Philosophy of Crisis Capitalism, London: Verso, 2014, 256 pp., pb, £19.99, ISBN 9781781682654

Author(s): Georgios Papadopoulos / Language(s): English Issue: 2/2014

Review of David Stuckler and Sanjay Basu, The Body Economic: Why Austerity Kills, New York, Basic Books, 2013, hb, 240 pp., $26.99, ISBN 9780465063987

Author(s): Jorge Tamames / Language(s): English Issue: 2/2014