Ethics and economics, today and in the past

Author(s): James E. Alvey / Language(s): English Issue: 1/2011

Economics was traditionally viewed as part of a wider study of human things, including ethics. It has drifted away from ethics despite the fact that ethical considerations inevitably form part of economics. After a brief introduction, the second section outlines the state of play in the economics discipline. The third section deals with the ethical crisis of economics today. The fourth section presents two grand narratives of ethics and economics. The fifth section sketches Amartya Sen’s critique of the mainstream and his alternative approach to economics. The sixth section provides some concluding comments.

From the search for natural laws to the discovery of contingent rules in economics

Author(s): Nicolas Postel / Language(s): English Issue: 1/2011

In this article, the author defends the idea that one of the positive results of modern economic analysis is the conviction that there is no natural law in economics. Thus, the most thorough scientific research which has tried to provide an analytical foundation for the mythical invisible hand, the “general equilibrium paradigm,” has finally shown that such an equilibration process cannot be formally demonstrated. Hence, we can say that economists cannot demonstrate the existence of a law of “supply and demand” but, more simply, can assert that some causal but contingent relations may exist between price, supply and demand. According to this result, the critical approach of Kenneth John Arrow concludes with the necessity of social and moral rule (for the good functioning of the market). It is, thus, necessary to assume the contingent nature of economic rules, and the absence of natural law, and consequently, to modify economists’ theoretical model.

Finance contemporaine et postmodernisme: l’expression d’un capitalisme tardif

Author(s): Christophe Schinckus / Language(s): French Issue: 1/2011

This paper shows that the evolution of financial markets implies some features of the postmodernism, as for example, the emergence of a hyperreality or an over-exaggeration of the exchange. Computerization contributed to the development of what Baudrillard called a hyper-reality in which financial quotations are self-referent, i.e. they do not refer to an economic reality. Finance is now in post-modernity and this essay offers an analysis of this financial post-modernity.

The Christian ethics of socio­economic development promoted by the Catholic Social Teaching

Author(s): Edgardo Bucciarelli,Tony E. Persico,Nicola Mattoscio / Language(s): English Issue: 1/2011

This paper highlights the relationship between economic science and Christian moral in order to analyze the idea of socio­economic development promoted by the Catholic Social Teaching (CST). In the first period leading up to the Second Vatican Council (1891­1962), from Pope Leo XIII to Pope John XXIII, the idea of development was connected both to technical and industrial progress, and to the universal values of justice, charity, and truth, which national communities were asked to follow. During the Conciliar period (1962­1979), the concept of development assumes a social and economic dimension, and so it becomes one of the main pillars of Catholic Social Teaching, which introduces the earliest definition of integral human development. Ultimately, in the post­Conciliar phase (1979­2009) including Benedict XVI’s pontificate, the idea of integral human development reaches its maturity by incorporating the complexity of real­world economic interactions. Finally, this paper shows how the ethics bolstered by the Catholic Social Teaching is characterized by two distinct but complementary lines of thought: moral rules for both political action, and for socio­economic issues.

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.

"This lofty mountain of silver could conquer the whole world”: Potosí and the political ecology of underdevelopment, 1545-1800

Author(s): Jason W. Moore / Language(s): English Issue: 1/2010

By the 1570’s, Potosí, and its silver, had become the hub of a commodity revolution that reorganized Peru’s peoples and landscapes to serve capital and empire. This was a decisive moment in the world ecological revolution of the long seventeenth century. Primitive accumulation in Peru was particularly successful: the mita’s spatial program enabled the colonial state to marshal a huge supply of low-cost and tractable labor in the midst of sustained demographic contraction. The relatively centralized character of Peru’s mining frontier facilitated imperial control in a way the more dispersed silver frontiers of New Spain did not. Historical capitalism has sustained itself on the basis of exploiting, and thereby undermining, a vast web of socio-ecological relations. As may be observed in colonial Peru, the commodity frontier strategy effected both the destruction and creation of premodern socio-ecological arrangements.

The rise, maturity and geographic diffusion of the cotton industry, 1760-1900

Author(s): Florence Molk / Language(s): English Issue: 1/2010

This article examines the trajectory of the cotton industry, including calico printing, over the period 1760-1900. From its beginnings in England as a leading industry of the capitalist world-economy, it spread geographically on a major scale to finally reach the United States and Japan. Over the long term, it is argued that as it expanded and competition increased, profit rates tended to fall, although unevenly.

"The dangerous classes”: Hugo Grotius and seventeenth-century piracy as a primitive anti-systemic movement

Author(s): Eric Wilson / Language(s): English Issue: 1/2010

This essay discusses the historical and textual representations of piracy in the writings of Hugo Grotius, primarily De Indis/De iure praedae (1603-1608) and the Commentarius in Theses XI (c. 1600). Contrary to popular belief, Grotius, in stark contrast to Jean Bodin, was not an advocate of the constitutionally homogenous Nation-State. Rather, his central concept of divisible sovereignty, the lynchpin of the constitutional theory of his early writings, unambiguously presents us with the object of the heterogeneous State. In Grotian theory, the State may be “read” as a composite construction, with a residual degree of inalienable sovereignty accruing at each unit-level. Even if only unconsciously, Grotius describes a concurrent para-political sub-division of the state between institutional Government (the “magistrates”) and civil society, one that constitutes an operational system of governance within the Nation-State. Like his contemporary Johannes Althusius, Grotius’ theory allows for the emergence of a wholly “private,” albeit lawful, mode of authority. This is most apparent in Grotius’ treatment of the mercantile trading Company and its Privateering operations. The corporatist theory of sovereignty permits the Company’s private agents of violence, the legally ambivalent Privateer/Pirate, to be invested with a requisite degree of sovereignty. The Grotian theory of divisible sovereignty, investing the seventeenth-century Pirate band with legal personality, serves as a vital historical precursor to the quasi-statist (trans-) national criminal cartels of the twenty-first century. The Grotian Pirate/Privateer/Just Avenger, therefore, is a “nomad”: a liminal entity that simultaneously transverses both geographical and juro-political spaces, rendering him or herself in-determinable.

Structures of knowledge in the Ottoman Empire and Turkish Republic, 1731­-1980

Author(s): Sanem Güvenç-SalgÂrl / Language(s): English Issue: 1/2010

It is argued that the historiographical approaches prevalent in the Ottoman Empire and then in the Turkish Republic, observable in both academic and cultural production and implemented in the education system, were closely related to material transformations in politics and economics. It is further shown, however, that these relations were not of a one-way causality in either direction, but rather part of a singular whole. Debates over the construction of the past and the modernization project survive today in discussions arising from Turkey’s possible candidacy for membership in the European Union.

Malthus’s idea of a moral and political science

Author(s): Sergio Cremaschi / Language(s): English Issue: 2/2010

This paper discusses, first, the kind of Newtonian methodology Malthus had been exposed to at Cambridge; secondly, the views on algebra and the doctrine of proportions he inherited from MacLaurin and the contribution of his colleague Bewick Bewin in devising a special role for this doctrine in the moral sciences; thirdly, Malthus’s ideas on language and the reasons for rejection of an artificial language for political economy. Then it discusses his idea of political economy as a moral science and his claims to be Adam Smith’s true heir. The conclusion is that Hollander is right when he contends that Malthus’s and Ricardo’s methods, as contrasted with their methodologies, were just two opposite poles within one spectrum, but also that the Cantabrigian and Scottish tradition provided staple for a design of a moral and political science alternative to the Unitarian and the Benthamite programs.

Towards a critical realist-inspired economic methodology

Author(s): Bjørn-Ivar Davidsen / Language(s): English Issue: 2/2010

This paper argues that critical realism conceived as a meta­theory for scientific activities offers a consistent set of helpful philosophical resources from which a potentially fruitful position of economic methodology may be developed. When fully developed, a critical realist­inspired economic methodology may in turn underlabour for more concrete scientific undertakings, economic theorising and applied analyses. Adopting such a strategy for further advancement of the critical realist project would prove a much needed supplement to, or perhaps even substitute for, the currently dominating strategy of grand scale philosophical underlabouring aimed at reorienting more or less the whole discipline of economics. The main trust of the argument made then, is that critical realism comes with a constructive and practical potential that goes beyond critiques of mainstream economics and philosophical underlabouring for already existing schools of thought within economics and that it is time for this potential to be actualised.

Because I said so: the persistence of mainstream policy advice

Author(s): Nathaniel Cline,Kirsten Ford,Matías Vernengo / Language(s): English Issue: 2/2010

The current global crisis has shown the limitations of the mainstream approach. We trace the origins of the limitations of the dominant neoclassical views to the capital debates and to the rise to dominance of intertemporal general equilibrium. The limited use of the Arrow­Debreu model, which became dominant after the capital debates, in terms of policymaking, is central to understand the persistence of policy guided by the aggregative model. We use the International Monetary Fund (IMF) as a case study of this perplexing continuity of policy advice. Given our survey, we conclude that even though the economy is in the midst of the worst capitalist crisis since the Great Depression, a significant paradigmatic shift in economics is extraordinarily unlikely.

Schumpeter’s theory of leadership: a brief sketch

Author(s): Panayotis Michaelides,Ourania Kardasi / Language(s): English Issue: 2/2010

So far, it has hardly been recognized that the great Austrian thinker Joseph Alois Schumpeter had developed a general theory of leadership. In this paper, we analyze how leaders promote change by building on Schumpeter’s understanding of entrepreneurial leadership which fuses the concepts of entrepreneurship and leadership. Also, we analyze Schumpeter’s shift in emphasis regarding his leadership theory. Specifically, Schumpeter in his early works defined entrepreneurs as individuals whose acts have significant effects on firms. However, in his late works he seems to have realized the need to extend further the boundaries of his early approach, to account for social forces.

The internal consistency of perfect competition

Author(s): Stephan Pühringer,Jakob Kapeller / Language(s): English Issue: 2/2010

This article surveys some arguments brought forward in defense of the theory of perfect competition. While some critics propose that the theory of perfect competition, and thus also the theory of the firm, are logically flawed, (mainstream) economists defend their most popular textbook model by a series of apparently different arguments. Here it is examined whether these arguments are comparable, consistent and convincing from the point of view of philosophy of science.

On technological change and stage evolution in the works of Seneca and Adam Smith

Author(s): Christos P. Baloglou / Language(s): English Issue: 2/2010

The present paper investigates the links that connect Seneca and Adam Smith in relation to the concept of the technological change and the evolution of society. The Roman philosopher and jurist discusses extensively the technical achievements in various factors of production which are an outcome of the division of labour. The main question concerning the fact, if all inventions stem originally from the cogitations of philosophers, or, the common workman is exposed to the manufacturing process in his daily tasks appears also in Adam Smith’s thought. The analysis shows Smith’s classical roots and the significance of the Roman literature.

Commentary on black political economy

Author(s): Curtis Haynes Jr / Language(s): English Issue: 2/2010

A Review of Christian Arnsperger, Full Spectrum Economics. Towards an Inclusive and Emancipatory Social Science, Routledge, 2010, 277 pp.

Author(s): Irina Zgreabãn / Language(s): English Issue: 2/2010

A Review of Jean-François Ponsot and Sergio Rossi (eds), The Political Economy of Monetary Circuits: Tradition and Change in Post-Keynesian Economics, Basingstoke, Palgrave Macmillan, 2009, 264 pp.

Author(s): Rémi Stellian / Language(s): English Issue: 2/2010

Commentary on Teaching Economics with Podcasts, Literature and Movies

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