The social organisation of epistemology in macroeconomic policy work: the case of the IMF

Author(s): Richard H. R. Harper / Language(s): English Issue: 1/2009

This paper reports an ethnographic study of work practices in the IMF, and IMF mission activity in particular. It will show how this work combines arithmetic, econometric and meeting skills with the adroit management of social processes that transform ‘incomplete’ or ‘ambiguous numbers’ into socially validated and hence ‘objective for practical purposes’ data. These data form the basis of epistemic certainty in the analytical work undertaken, and though this certainty is socially framed, it is treated as sufficient for substantive, robust and ‘real world’ macroeconomic policy making.

The foundation of Marx’s concept of value in the Manuscripts of 1844

Author(s): Laurent Baronian / Language(s): English Issue: 1/2009

The aim of this paper is to show how Marx’s Economic and Philosophic Manuscripts of 1844, which stand as his first systematic study of classical economists, transform the concept of labour as it had been developed by political economy against mercantilism and physiocracy. The current interpretations of the Marxian theory of value are first reviewed. The analysis of the Manuscripts then shows that the contribution of Hegelian philosophy lies in the definition of social labour in total opposition to the orthodox conception. This issue leads to a re­examination of the significance of these Manuscripts for the Marxian concept of value and its source, general and abstract labour.

Institutionalism as the way of unification of the heterodox theories

Author(s): Nicolas Postel,Richard Sobel / Language(s): English Issue: 1/2009

In this article we seek to show that there is a common framework to the various approaches known as heterodox. This framework is the “institutionalism”, which take into account the concrete institutions in which the economic process proceeds. To argue our thesis we deploy two types of justification. We begin with an historical justification which borrows from the history of the thought and will find in emblematic authors (Ricardo, Marx, Keynes, Polanyi) (1) the definition of a common object for an institutionalist political economy (the study of a “Monetary economy of capitalistic production”); (2) a common general standard of the economy like “an institutionalized process between men and environment” (against the definition of Robbins). Our second justification is a more epistemological one. We develop the way in which the institutionalist approach mobilizes the concepts of action and of institution. The goal of this article is to contribute to the emergence of a positive paradigm, common to the heterodox, which is not defined any more in hollow or negative in opposition to the neo­classic “main stream”.

Loanable funds, liquidity preference: structure, past and present

Author(s): Romar Correa / Language(s): English Issue: 1/2009

We appraise the canonical Robertson­Keynes discussion from the structural axis of exogeneity/endogeneity of the interest rate. The interest rate is shown to be an exogenous variable. It is only with Keynes’ contribution of liquidity preference and, specifically, the introduction of the liquidity preference of banks that no more than the possibility of endogenising the interest rate arises. Given the tenuousness of the resolution, we pose the ethical question: should the rate of interest be endogenised? On the other hand, Keynes’ theorem that the rate of interest is a monetary variable is validated. Both money and the rate of interest are codetermined in a capitalist economy.

A new framework for the analysis of contemporary financial markets: the need for pluralistic approaches

Author(s): Mitja Stefancic / Language(s): English Issue: 1/2009

Interdisciplinary approaches are essential to properly evaluate an economic and financial system that is increasingly complex and globally interrelated. With reference to the work of the philosopher Peter Godfrey – Smith, it is argued that a more pronounced interdisciplinarity in the social sciences would enable a flourishing of pluralism in economics. By adopting clearly defined research strategies and objectives, scholars with different academic backgrounds can successfully work on common projects. A better integration of economic, social and behavioural sciences will favour the establishment of new frames of thinking and new analytical tools which are much needed in contemporary financial regulation. Financial markets, defined as competitive markets in financial instruments such as stocks, bonds, loans and derivatives, represent a research subject that may be analysed from a plurality of angles and frames, including a sociological one. In practice, such a plurality of perspectives could favour sustainable wealth creation and contribute to maximizing the benefits from economic globalization.

A review of David Colander, The Making of a European Economist, Cheltenham, UK, Edward Elgar, 2009, 190 pp.

Author(s): Mariana Nicolae / Language(s): English Issue: 1/2009

A review of George A. Akerlof and Robert J. Shiller, Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism, Princeton University Press, 2009, 264 pp.

Author(s): Cornel Ban / Language(s): English Issue: 1/2009

A Review of The Genesis of Innovation: Systemic Linkages between Knowledge and the Market, Edited by Blandine Laperche, Dimitri Uzunidis, Nick von Tunzelmann, Cheltenham UK, Edward Elgar, 2008, 285 pp

Author(s): Dana Gârdu / Language(s): English Issue: 1/2009

A Review of Marshall and Schumpeter on Evolution: Economic Sociology of Capitalist Development, Edited by Yuichi Shionoya and Tamotsu Nishizawa, Cheltenham UK, Edward Elgar, 2008, 285 pp.

Author(s): Andreas Stamate / Language(s): English Issue: 1/2009

Economics and religion – a personalist perspective

Author(s): Petre Comşa,Costea Munteanu / Language(s): English Issue: 2/2009

Traditionally, the reaction of many mainstream economists to the effort to integrate theology and economics demonstrated the difficulty of doing so in a way that could be broadly recognized as legitimate. This state of things is simply an indication of a broad consensus within the field of economics that methods, norms, and even concerns construed to be related to religious belief have no place in the scientific study of economics. Recently, the situation seems to be changing, however. A decade ago, a group of Christian Catholic social thinkers engaged in dialogue with free-market economists concerning the morality of market activity. As a result, this interdisciplinary exchange inspired the conception of a new subdiscipline that sought to synthesize central aspects of theology and economics, thereby giving rise to a new body of scholarship termed economic personalism. The general idea is to promote a humane economic order that benefits from market activity but does not reduce the human person to just another element in economic phenomena. This paper suggests that, under such circumstances, the Christian-Orthodox contribution to further development of this new field of investigation could consist in bringing forward the teaching of the Holy Fathers of Eastern Tradition. It is argued that, in this way, the moral dimension which dominantly defines the Catholic vision of the human person could be surpassed and even transfigured by the spiritual dimension which fully inform the Orthodox vision. Moreover, this pre-eminence of the spiritual determinants of the human person is expected to result in a number of significant changes concerning the way economic personalism is currently conceived (in terms of its subject matter, basic conceptual principles, and general mission).

Pluralism and Heterodoxy: Introduction to the Special Issue

Author(s): Andrew Mearman / Language(s): English Issue: 2/2008

This paper introduces a special issue of the journal devoted to work presented at two recent conferences of the Association for Heterodox Economics (AHE). The AHE is an organisation which advocates and provides a forum for non-mainstream approaches to economics. Recent conferences have focused on pluralism. Pluralism is a variegated concept with multiple motivations and arguments in its favour. Such arguments tend to be ontological and epistemological, but may also be pedagogical. Pluralism has been advocated as a moniker preferable to heterodoxy which might be adopted by non-mainstream economists. However, it is problematic. The papers which comprise the remainder of this issue illustrate that point. The papers are discussed in turn and contrasted.

Methodological Monism in Economics

Author(s): Tamás Dusek / Language(s): English Issue: 2/2008

The aim of the paper is to give an outline of the relation between general epistemology and the epistemology of economics. The epistemology of economics can be treated starting from the ‘general epistemology of science’ and from the subject of the investigation, namely the problems of economics itself. Starting from the general or subject-independent epistemology one can make an attempt to adapt to economics various methodological approaches which were practically created to take only the subject of physics or mathematics into consideration. The characteristic feature of this mentality is often methodological monism, a doctrine which implicitly or explicitly states the unity of epistemology in all disciplines. In methodological writings of economics, beside the supporters of some general epistemological viewpoints, there are serious critics of them on behalf of methodologists who start their researches based on economics.Methodological pluralism does not reject the importation of methodological ideas from other branches of knowledge in an aprioristic way. However, the uncritical adoption of the methodology of physical sciences or ‘general’ methodology leads to the realm of inadequacy and dogmatism. According to methodological pluralism, every research has to choose its methods and methodology conforming to the nature of its own problems.The theoretical consequences of methodological monism are not always obvious. Inappropriate methodology can lead to inappropriate theories and inappropriate practical decisions. The negative consequences of formalism will be illustrated by some spatial economic issues in the field of money and price theory, such as the empirical empty doctrine of purchasing power parity and the theory of optimal currency areas. Since neoclassical mainstream is monist, therefore the critique of monism is at the same time the critique of the method of neoclassical mainstream.

Pluralism versus Heterodoxy in Economics and the Social Sciences

Author(s): Randall G. Holcombe / Language(s): English Issue: 2/2008

Pluralism is the concept that there is no single methodology that is always the correct one for discovering scientific truths, so multiple approaches and methodologies are required for a complete scientific understanding of a subject. Heterodoxy refers to those approaches to a subject that are outside of the generally accepted mainstream. While pluralism and heterodoxy are not necessarily inconsistent, heterodox economists tend to follow one particular methodology or school of thought rather than taking an eclectic approach to economic understanding, and heterodox economists often criticize approaches other than their own. Thus, in most cases, heterodox economists, by defending their own schools of thought and critiquing other approaches, are not pluralistic. The paper advocates a pluralistic approach to the social sciences over the more narrow approaches typically promoted by heterodox schools of thought.

Plurality in Orthodox and Heterodox Economics

Author(s): Sheila C. Dow / Language(s): English Issue: 2/2008

Several observers have noted signs of a growing plurality in mainstream economics. At the same time there has been a growing emphasis in heterodox economics on commonality. The purpose of this paper is to explore the nature of plurality in economics in order to make sense of these characterisations, and to consider the issues raised by this plurality. The critical factor is to distinguish between plurality at the level of theory and evidence, at the level of methodological approach (plurality of methods), and at the meta-methodological level (a plurality of methodologies). First it is argued that, while there is plurality at the level of theory and even of type of evidence in orthodox economics, there continues to be monism in terms of methodological approach, and in attitude to methodological alternatives. In heterodox economics, the commonality of methodological approach does not go far before emerging pluralistically into a variety of approaches. Indeed there is, at the meta-methodological level, a range of arguments in heterodox economics for a plurality of methodologies, that is, a recognition that it is legitimate (if not inevitable) that there is more than one approach to economics.

From Fragmentation to Ontologically Reflexive Pluralism

Author(s): Ioana Negru,Vinca Bigo / Language(s): English Issue: 2/2008

Considerable attention has recently been directed towards the analysis of pluralism in social science, not least in economics. Plurality is often taken as a mark of pluralism. But it is not the same thing, and often indicates little more than a disconnected fragmentation of contributions to a topic. We believe, in fact, that such fragmentation is rife in modern social theorising, and identify numerous causes. We subsequently examine the possibility of using an ontologically reflexive form of pluralism to achieve a greater degree of theoretical integration between various strands of thought than has hitherto been the case. We conclude by stressing the need to be aware of ontological presuppositions in social theorising. Our motivation is a concern with advancing a ‘the pluralist project’ in which, where feasible, an integration of ideas takes centre stage.

Dialectics and the Austrian School: A Surprising Commonality in the Methodology of Heterodox Economics?

Author(s): Andy Denis / Language(s): English Issue: 2/2008

This paper is prompted by the concluding comments to a recent paper (Denis “Hypostatisation”), which suggests that the neoclassical use of the concept of equilibrium expresses a formal mode of thought. Heterodox tendencies from Marxian to Austrian and Post Keynesian economics, that paper continues, exemplify a dialectical mode of thought in their common rejection of neoclassical equilibrium theorising. Heterodox currents in economics are – particularly in terms of their analysis and policy prescription – often as divided amongst themselves as they are from the orthodoxy. Nevertheless, the present paper suggests, there may be something profound uniting these disparate heterodox trends: the adoption of a dialectical method. The paper draws on the work of Sciabarra (“Marx”, “Total”), who argues that Marxian and Austrian economics are intellectual cousins sharing a methodological approach. He suggests that making process primary, which we might expect of Austrian economists, is the essence of dialectics, which we might identify with Marxism. If that is the case, then perhaps (a) we can only understand the method of neoclassical economics by contrasting it with a dialectical approach, and (b) we can explore methodological common ground between the various heterodox currents by examining their attitude, both implicit and explicit, to dialectics. Pluralism in economics requires, not merely toleration – though indeed it does require that – but mutual engagement, a conversation. For that to take place we need an understanding of what divides and unites the various approaches. This paper is offered as a contribution to the development of that mutual understanding.

European Historical Economics and Globalisation

Author(s): James Foreman-Peck / Language(s): English Issue: 1/2007

Globalisation is here considered as the increasing specialisation or complexity that accompanies extension of spatially limited markets to include larger and larger sections of the world. To the extent that the enlargement of one market brings contact with others, the process is one of market integration. This paper focuses on two millennia of globalisation so defined, from the perspective of the European economies. It shows that there have been several waves of globalisation linked with rising productivity and prosperity, followed by long economic contractions. Expansions took place within new frameworks for internal and external security and the disintegration of these regimes typically reversed the process. Higher incomes were the reward for accepting the greater vulnerability of stronger interdependency.

On Ethics and the Economics of Development

Author(s): Mozaffar Qizilbash / Language(s): English Issue: 1/2007

This paper examines the implications of some of the growing literature at the borderline of ethics and economics for development debates. It argues that this literature has already had considerable impact on development economics, particularly as a result of work on well-being and capabilities. Other areas where there has been considerable growth include population ethics and the area which explores the link between the contractarian tradition in moral philosophy and game theory. Work here has had less impact on development economics, and there is considerable scope for more work. Finally, both ethics and economics have been criticised for taking too abstract a view of human beings. Each has begun to take on this line of criticism and work which responds to it in various ways – such as by taking account of issues relating to identity, allowing for hard choices and fuzziness - is relevant to development.

Globalisation, the state and economic justice

Author(s): Mark Beeson / Language(s): English Issue: 1/2007

This paper explores the potential for states to act as agents of economic justice in an era of ‘globalisation’. After providing a critical review of debates about both economic justice and globalisation, the paper suggests that states retain an important degree of policy-making autonomy—should they care to exercise it. Following this I make a rather unfashionable argument which claims that, if economic justice is actually to be achieved in the contemporary era, it may be up to states to provide it. For the current structures of global governance are not only often ineffective, but they may actually entrench inequality and injustice. In the absence of a just global order, individual states may have to rely on their own efforts to achieve what economic equality they can.

From a ‘Moral Philosopher’ to a ‘Poor’ Economist

Author(s): Soumitra Sharma / Language(s): English Issue: 1/2007

The roots of modern ‘Economics’ are deeply buried in the moral and political philosophy of the ancient philosophers. The journey of an economist from the pedestal of a ‘moral philosopher’ to a state of ‘poor economist’ is rather long. Through the Middle Ages the ‘natural law’ approach to economics and sociology held firm. The ‘socio-economic rationalism’ of the Stoics helped this approach to develop into a ‘social science’ that later took the form of ‘moral philosophy’ of the 18th century philosophers. Since then Economics has been enriched by scientific thought of many. While Marshall and his Principles made the study of Economics popular at universities, Keynes provided a theoretical platform to the governments for their full employment policies ensuring an unprecedented economic growth for a quarter century during the post-war years. For more than a century now Economics has witnessed tremendous progress in methods and contents. Unfortunately, over the last two decades it has come under fire. Is there a new transformation underway or Economics has lost its lustre? This short essay tries to address some of such issues.