Modeling exogenous moral norms

Author(s): Ross A. Tippit / Language(s): English Issue: 1/2014

This paper considers the possibility of a robust and general formulation of a model of choice for the representation of a variety of moral norms. It starts by reviewing several recent models of deontological (or rule-based) norms that retain the basic elements of the economic model of choice. It briefly examines the achievements and drawbacks of each model, and while no model is identified as the most accurate or robust, the most appealing aspects of each model contribute to the construction of a tout-ensemble utility function proposed in the final section. This representation of preferences aims to incorporate the most common qualities of both consequentialist and deontological moral norms in order to represent decision making under their influence.

Shifting economics: fundamental questions and Amartya K. Sen’s pragmatic humanism

Author(s): Tara Natarajan / Language(s): English Issue: 1/2014

Amartya K. Sen’s body of work is an unrelenting project that consistently and coherently re-focuses the attention of economists and economics towards foundational questions. His capabilities framework has offered an expanded space of evaluation to directly judge the well-being of people and society. Through a detailed survey of Sen’s intellectual development, his readdressing fundamental rigidities in economic methodology, and his new framework for evaluation, this paper argues that Sen has inculcated new habits of mind, and engendered a social momentum in economic thought that takes human complexity and the richness of societal diversity into account. Creating a social momentum in economic thought through refocused habits of mind can have a sustainable impact in economics only if its scope is not sub-discipline specific, if it provides an inclusive framework, and if it builds bridges within and outside the discipline chiefly between economics and moral philosophy. Sen’s approach is pragmatic, courteous, and persuasive, but not divisive. It is expansive, yet contextual; it is humanistic. In Sen, economics is an inquiry into the nature and causes of human development.

A comment on scarcity

Author(s): M. Northrup Buechner / Language(s): English Issue: 1/2014

Modern economics is based on the idea that every good and service is scarce, but the standard defenses of this premise by reference to zero prices and infinite resources are invalid. The concept of scarcity is defined and used to show that ordinary scarcities are not economic scarcities. The errors regarding scarcity are traced to the methodology of modern economics, and an alternative method is suggested for a science whose subject matter is real human beings. The concept of relative scarcity is explained, and used to illuminate some important aspects of the functioning of a market economy. Some of the consequences are identified for economics if economists recognized that universal scarcity is not a fact.

Commentary on secrets of economics editors: an unintended ethnography of economics

Author(s): Utku Balaban / Language(s): English Issue: 1/2014

Review of Jérôme Ballet, Damien Bazin, Jean-Luc Dubois, and François-Régis Mahieu, Freedom, Responsibility and Economics of the Person, London, Routledge, ebk, 2014, 174 pp., ISBN 978-0-203-79633-7

Author(s): Carmen Elena Dorobăţ / Language(s): English Issue: 1/2014

Growth theory after Keynes, part I: the unfortunate suppression of the Harrod-Domar model

Author(s): Hendrik Van den Berg / Language(s): English Issue: 1/2013

After Harrod and Domar independently developed a dynamic Keynesian circular flow model to illustrate the instability of a growing economy, mainstream economists quickly reduced their model to a supply side-only growth model, which they subsequently rejected as too simplistic and replaced with Solow’s neoclassical growth model. The rejection process of first diminishing the model and then replaced it with a neoclassical alternative was similar to how the full Keynesian macroeconomic paradigm was diminished into IS-LM analysis and then replaced by a simplistic neoclassical framework that largely ignored the demand side of the economy. Furthermore, subsequent work by mainstream economists has resulted in a logically inconsistent framework for analyzing economic growth; the popular endogenous growth models, which use Schumpeter’s concept of profit-driven creative destruction to explain the technological change that Solow left as exogenous, are not logically compatible with the Solow model.

Fairness through regulation? Reflections on a cosmopolitan approach to global finance

Author(s): Marin Beroš,Marta Božina Beroš / Language(s): English Issue: 1/2013

In the aftermath of the last financial crisis a strong message prevails that ‘something’ has to be changed in the manner global finance is governed. What exactly this ‘something’ entails and what could constitute the ‘common ground’ of anticipated change is more difficult to determine. Many envisage future improvements of global financial governance by evoking deliberative democracy, political equality and cosmopolitanism. As financial regulation is the main instrument through which global finance is shaped and governed nowadays, these principles should then be transmitted to regulatory arrangements. This paper focuses on a new conceptual approach to regulatory and governance issues in global finance, by employing the philosophical idea of cosmopolitanism. It argues that although as a concept, cosmopolitanism cannot mitigate all the flaws attributed to contemporary finance, its development and extension to international financial regulation that is promulgated by institutions of the global financial system, would represent a worthwhile endeavour in making global finance more accountable and just in the eyes of many.

On the problem of scale: Spinozistic sovereignty as the logical foundation of constitutional economics

Author(s): Benjamen F. Gussen / Language(s): English Issue: 1/2013

This paper argues that sovereignty, as envisaged by Spinoza, is the logical foundation of constitutional economics. Constitutional constructs such as sovereignty weave an evolutionary dialectic between different organizational scales (the local, national, and global). This dialectic continues to wreak havoc at the local scale, and can be interrupted only through explicit constitutional constraints on the size of jurisdictions. The paper argues for more emphasis on constitutional orders in the spirit of Spinoza’s understanding of sovereignty. This entails preference for federal polities in which sovereignty is shared between different cities rather states where once capital cities dominate.

The ethics of New Development Economics: is the Experimental Approach to Development Economics morally wrong?

Author(s): Baele Stéphane J. / Language(s): English Issue: 1/2013

The 2000s have witnessed the arrival and growing popularity of randomized controlled experiments (RCTs) in Development Economics. Whilst this new way of conducting research on development has unfolded important insights, the ethical challenge it provokes has not yet been systematically examined. The present article aims at filling this gap by providing the first ad hoc discussion of the moral issues that accompany the use of RCTs in Development Economics. Claiming that this new research agenda needs its own, specific set of ethical guidelines, we expose the six ethical problems that these experiments potentially provoke and that should therefore be carefully assessed by ethics committees before an RCT is launched and by scholarly journals before its results are published.

Research note on an experimental approach to the intrinsic motivations of corruption

Author(s): Valeria Burdea / Language(s): English Issue: 1/2013

Even though most of the causes of corruption are easily identifiable at the macro level, there is considerable disagreement when it comes to the intrinsic motivations leading people to engage in this activity. The present paper tries to shed light on the aspect concerning the correlation between corruption and individual performance. This is useful for understanding the dynamics of common events like medical students attempting to bribe their way towards becoming a doctor, or companies bribing public officials to obtain licenses to build public highways, buildings, or provide electricity and water. However, corruption’s secretive nature makes it difficult to obtain trustworthy qualitative data on this subject. Hence, the study addresses the issue in the lab, through an experiment based on a bribery game. The results show that there is a significant correlation between performance and propensity to engage in a corrupt activity, opening the way for an improvement in the allocation of resources to reduce this negative phenomenon.

Review of Resilient Liberalism in Europe’s Political Economy, edited by Vivien A. Schmidt and Mark Thatcher, New York, Cambridge University Press, 2013, 469 pp., $32.99, ISBN 9781107613973

Author(s): Pheiffer Chantel F. / Language(s): English Issue: 1/2013

Review of The Elgar Companion to Recent Economic Methodology, edited by John B. Davis and D. Wade Hands, Cheltenham, UK; Northampton, MA, USA, Edward Elgar, 2011, hb, 542 pp., ISBN 9781848447547

Author(s): Lucia Ovidia Vreja / Language(s): English Issue: 1/2013

Review of Mark Blyth, Austerity. The History of a Dangerous Idea, New York: Oxford University Press, 2013, 304 pp., hb, $16.95, ISBN 9780199828302

Author(s): Juan Camilo Blanco / Language(s): English Issue: 1/2013

Money and value: a synthesis of the state theory of money and original institutional economics

Author(s): Georgios Papadopoulos / Language(s): English Issue: 2/2013

The paper proposes a synthesis of original institutional economics and in particular of the work of John R. Commons with the state theory of money, constructing a theoretical framework for the analysis of economic value in relation to money. The argument developed resists the naturalistic, individualistic, neoclassical analysis of value, proposing an account based on antagonism and negotiation framed by social institutions and more specifically by the institution of money. Money plays an active role in the process of the constitution of the system of prices, creating possibilities of mediation in the conflicts around the distribution of social production and contributing towards the establishment of ‘reasonable value’ in economic transactions.

The missing link: From Kautilya’s The Arthashastra to modern economics

Author(s): Marinko Skare / Language(s): English Issue: 2/2013

The aim of this paper is twofold: first, to provide evidence supporting the thesis that Kautilya was the first political economist; second, to verify that a systematic study of political economy has begun long before the ideas and works of Adam Smith. It was in the works of Kautilya (around 375 B.C.). In order to validate the aims of our study, we look for evidence in his Arthashatra of rational behaviour, self-interest motivation, and market elements of a traditional commercial society. Providing a sound interpretation of Kautilya’s main arguments, we demonstrate that his is no less a systematic study in political economy than Smith’s The Wealth of Nations. Economics is a science that tries to offer policies and practices for creating and enriching a nation’s wealth, and in that sense, the Arthashastra (literal translation being The Science of Wealth) represents the first systematic manual of political economy. The development of economics as a science must take cognition of the economic principles and ideas presented in The Arthashastra so as to reveal the true origins of economic thought and its evolution. It is only by understanding methodological problems in a historical perspective we can understand the modern methodological and conceptual issues.

The economic consequences of homo economicus: neoclassical economic theory and the fallacy of market optimality

Author(s): David Calnitsky,Dupuy-Spencer Asher / Language(s): English Issue: 2/2013

This essay presents a critique of the standard ascension from the rational agent to the optimal market in economic theory. Critiques of homo economicus are found unsatisfactory on grounds that its employment allows for the prediction of essential features of actual markets. Using this same criterion we introduce Gary Becker’s essay, ‘Irrational Behavior and Economic Theory,’ which demonstrated that the same features of markets could be derived from non-rational behaviour. Thus, non-rationality is equally predictive but is less restrictive than rationality. Once the assumption of rationality is relaxed, the concept of market optimality (though not market order) must also be sacrificed.

Review of The Social Sciences and Democracy, edited by Jeroen Van Bouwel, London, Palgrave Macmillan, 2009, 268 pp., £58 hb, ISBN 9780230224391

Author(s): Ioana Negru / Language(s): English Issue: 2/2013

Review of James E. Alvey, A Short History of Ethics and Economics: The Greeks, Cheltenham (UK), Edward Elgar Publishing, 2011, x+184 pp, hb, ISBN 9781847202017

Author(s): Dragoş Bîgu / Language(s): English Issue: 2/2013

Review of Pranab Bardhan, Awakening Giants, Feet of Clay: Assessing the Economic Rise of China and India, Princeton, NJ, Princeton University Press, 2010, 172pp, hb, ISBN 9780691129945

Author(s): Géraud Bablon / Language(s): English Issue: 2/2013

Review of Niall Ferguson, Civilization: The West and the Rest, Allen Lane, Penguin Books, London, 2011, pp. 385

Author(s): Andrei Josan / Language(s): English Issue: 2/2012