Critiques and developments in world­systems analysis: an introduction to the special collection

Author(s): Richard E. Lee / Language(s): English Issue: 1/2010

From its inception, the world-systems perspective was not only enormously influential in long-term, large-scale social research; it also attracted a set of serious critiques. These fell into the general areas of the emergence of the capitalist world-economy; reductionism in the mode of argument; surplus appropriation and accumulation, including the question of class; and the general exclusion of an analysis of any role for “culture.” It is concrete developments in world-systems analysis over the past three decades, although not to the exclusion of explicit responses to critiques, that have gone a long way in addressing these concerns. They fall most notably into the areas of commodity chains, households, world-ecology, and the structures of knowledge.

Nonwaged peasants in the modern world-system: African households as dialectical units of capitalist exploitation and indigenous resistance, 1890-1930

Author(s): Wilma A. Dunaway / Language(s): English Issue: 1/2010

Colonialism did not transform African peasants into waged labor. A majority of peasants worked as forced laborers, often unpaid, and they returned to their agricultural household labor as soon as they completed work assignments mandated by the colonizers. Colonial Africans resided in mixed livelihood households in which nonwaged labor forms (both free and unfree) predominated, and very few became dependent on wages. For a majority of colonial Africans, informal sector activities, tenancy, sharecropping, and subsistence production on communal plots were not temporary nonwaged forms on an inevitable path toward proletarianization. Wage earning was not the primary mechanism through which these households were integrated into the modern world-system. Instead, these households primarily provided nonwaged labors to capitalist commodity chains that, in turn, extracted surpluses from them and externalized costs of production to them.

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).

Six choice metaphors and their social implications

Author(s): Frederic B. Jennings Jr. / Language(s): English Issue: 2/2009

The six metaphors analyzed in this paper unfold stepwise into an interdisciplinary systems framework based on planning horizons. The notion of planning horizons serves as an ordinal measure of rationality and organization, in a social systemic context of ecological interdependence. Each metaphor opens into the next to extend our understanding.The neighborhood store is where almost all neoclassical choices are made, with visible options spread on shelves and a budget allocated among them, maximizing its worth. The chessboard demands strategic contingency planning in an evolving context of incompletely projectable outcomes. A transportation network combines substitutes and complements into a static complex system, intertwined and non­decomposable, leaving economists with a problem of institutional choice. Love is a complementary good – virtually costless to produce and distribute, always in demand – that should be abundant, though it is scarce. The educational system brings inter­horizonal complementarities into our field of view, where contagion effects of longer horizons enhance complementarity at the expense of substitution, shifting the mix of interdependence away from conflicts to concerts of interest. Human ecology is a dynamic complex system of interactive phenomena opening into time, evolving constantly in its structure, relationships and diversity and demanding ethics in our relations. These six metaphors raise some pressing questions on the invisible limits of models standing on substitution applied where they have no place. Symptoms of failure reveal themselves in myopia, ecological loss and the rise of violence in society. Economic implications of these metaphors are reviewed to illustrate the basis for an interdisciplinary approach to social scientific constructions.

The inheritance of heterodox economic thought: an examination of history of economic thought textbooks

Author(s): Mary V. Wrenn / Language(s): English Issue: 2/2009

The inheritance of heterodox economics hinges upon the degree to which the next generation is exposed to the history of the discipline’s thought. The potential to include heterodox thought into the curriculum presents itself most easily through history of economic thought classes. The potential is limited by the professor, but it is also circumscribed by the material presented or withheld in history of economic thought textbooks. If included, the presentation of heterodox methodologies and philosophies impresses upon students the relevance and importance of pluralism and dissenting views and by consequence, the future course of the discipline. This research seeks to examine the presentation of heterodox economics in history of economic thought textbooks and to assess the amount of space dedicated to its study and further, to explore how textbook adoption impacts the inheritance and heritage of heterodox thought and philosophy.

The epistemology of modern finance

Author(s): Xavier De Scheemaekere / Language(s): English Issue: 2/2009

Modern finance is a social science where the complexity of mathematical models compares to that of physics. The aim of this paper is to provide a conceptual framework for the interpretation of mathematical models in finance, in order to determine the epistemological standards according to which financial theory must be assessed. The analysis enlightens the contrast between highly objective results and the radical uncertainty that governs the markets. The main contribution of the paper is to show that the reasons why finance models are relative and non-causal are deeply rooted in the nature of finance theory itself. An important consequence is that arbitrage-free model prices are reference prices and indicators of the economical features underlying mathematical models. As such, they can be used to structure and support final pricing and hedging decisions, but not to predict future market prices

A review of Stephen T. Ziliak and Deirdre N. McCloskey, The Cult of Statistical Significance. How the Standard Error Costs Us Jobs, Justice, and Lives, The University of Michigan Press, Ann Arbor, 2008, 320 pages

Author(s): Tamás Dusek / Language(s): English Issue: 2/2009

A review of Peter Söderbaum, Understanding Sustainability Economics. Towards Pluralism in Economics, London, Sterling/VA: earthscan, 2008, 158 pages

Author(s): Karl Georg Zinn / Language(s): English Issue: 2/2009

A review of Ralph Harris in His Own Words, the Selected Writings of Lord Harris, Edited by Colin Robinson, Cheltenham, UK, Edward Elgar and the Institute of Economic Affairs, 2008, 343 pages

Author(s): Valentin Cojanu / Language(s): English Issue: 2/2009

Commentary on Teaching Economics with Podcasts, Literature and Movies

Author(s): James Moulder / Language(s): English Issue: 2/2009

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.