A review of U. Mäki (ed.). Fact and Fiction in Economics, Cambridge: Cambridge University Press, 2003. pp. xvi 384. ISBN 0521 00957. As people interested mainly in theory, methodologists and philos...

This is a history of economic thought from Adam Smith to John Maynard Keynes - but it is a history with a difference. Firstly, it is a history of economic theory, not of economic doctrines, that is, it is consistently focused on theoretical analysis, undiluted by entertaining historical digressions or biological colouring. Secondly, it includes detailed Reader's Guides to nine of the major texts of economics, namely the works of Smith, Ricardo, Mill, Marx, Marshall, Wickstead, Wicksell, Walras (...) and Keynes, in the effort to encourage students to become acquainted at first hand with the writings of all the great economists. This fifth edition, first published in 1997, adds new Reader's Guides to Walras's Elements of Pure Economics and Keynes' General Theory to the previous seven Reader's Guides of other great books in economics. There are significant and major additions to six chapters. (shrink)

Papers produced for a conference of economists, economic methodologists and historians of economics, convened to reflect on the question of whether MSRP - the methodology of scientific research programmes - has proved useful in the light of 20 years' experience.

In this study, Don Ross explores the relationship of economics to other branches of behavioral science, asking, in the course of his analysis, under what interpretation economics is a sound empirical science. The book explores the relationships between economic theory and the theoretical foundations of related disciplines that are relevant to the day-to-day work of economics -- the cognitive and behavioral sciences. It asks whether the increasingly sophisticated techniques of microeconomic analysis have revealed any deep empirical regularities -- whether (...) technical improvement represents improvement in any other sense. Casting Daniel Dennett and Kenneth Binmore as its intellectual heroes, the book proposes a comprehensive model of economic theory that, Ross argues, does not supplant, but recovers the core neoclassical insights, and counters the caricaturish conception of neoclassicism so derided by advocates of behavioral or evolutionary economics. Because he approaches his topic from the viewpoint of the philosophy of science, Ross devotes one chapter to the philosophical theory and terminology on which his argument depends and another to related philosophical issues. Two chapters provide the theoretical background in economics, one covering developments in neoclassical microeconomics and the other treating behavioral and experimental economics and evolutionary game theory. The three chapters at the heart of the argument then apply theses from the philosophy of cognitive science to foundational problems for economic theory. In these chapters, economists will find a genuinely new way of thinking about the implications of cognitive science for economics, and cognitive scientists will find in economic behavior, a new testing site for the explanations of cognitive science. (shrink)

This volume, first published in 1991, represents a wide-ranging inquiry into the general field of structural economic analysis and provides a thorough appraisal of the method of economic dynamics. It comprises nine original essays by distinguished scholars, all of which assess different aspects of the concept of economic structure. The analytical contribution of the volume is to draw attention to the relationship between 'horizontal' and 'vertical' treatments of economic structure that have characterized economic theory. The (...) former focuses on the circular character of economic relationships, as exemplified in the Quesnay–Leontief literature, while the latter concentrates on the relationships between the 'fund' of productive resources and the production of finished goods. Perhaps the most important contribution of the volume is to provide a linkage between the two approaches and to put forward a new conceptual framework that combines an appreciation for the importance of technical relationships with a recognition of the institutional arrangements in the economic system. (shrink)

This book uses game theory to analyse the creation, evolution and function of economic and social institutions. The author illustrates his analysis by describing the organic or unplanned evolution of institutions such as the conventions of war, the use of money, property rights and oligopolistic pricing conventions. Professor Schotter begins by linking his work with the ideas of the philosophers Rawls, Nozick and Lewis. Institutions are regarded as regularities in the behaviour of social agents, which the agents themselves tacitly (...) create to solve a wide variety of recurrent problems. The repetitive nature of the problems permits them to be described as a recurrent game or 'supergame.' The agents use these regularities as informational devices to supplement the information contained in competitive prices. The final chapter explores the applicability of this theory, first by relating it to previous work on the theory of teams, hierarchies, and non-maximizing decision theory, and then by using it to provide a new approach to a variety of questions both within and outside economics. (shrink)

Originally published in 1981, Dr Currie's main emphasis in this book is on the economic theory of agricultural land tenure, but he also makes extensive reference to the historical development of land tenure in England. After consideration of the history of economic thought on this important topic, he employs an essentially neo-classical approach, though one that pays due attention to the nature of institutional arrangements and particular forms of property rights. In dealing with these latter aspects, he considers (...) not only the economic effects of particular institutional forms but also their economic causes. The careful use of the history of land tenure development gives this work especial relevance for agricultural development and for issues of land reform. The Physiocrats and Classical economists gave land tenure an important place in their work. Following a long period of' neglect by Neo-Classical economists, land tenure arrangements again received considerable theoretical attention in the years preceding publication. Dr Currie draws on and develops this work. Moreover, he investigates the importance of a number of crucial issues that were being neglected at the time. (shrink)

War often comes down to one thing: money. The role of economics in the study of both peace and war is arguably then the most important single factor when it comes to the study of defence. This excellent new book from Fanny Coulomb will be of interest not only to those involved in the burgeoning field of defence economics - it will also be of vital interest to students and academics from international relations, defence studies, philosophy and political science backgrounds.

A collection of specially commissioned papers which apply new analytical methods to the dtudy of the institutions, their origin, maintenance, and adaptation, which play such an important role in agrarian relations and rural development.

The interpretation of economic theories varies along several dimensions. First, models can describe reality, illustrate a recommended state of affairs, or analyze the structure and implications of a theory. Second, theories can be used for prediction or for explanation. Third, theories can relate to reality in a rule-based or case-based manner. Fourth, theories can be statements about economic reality or about the act of economic reasoning itself. Fifth, theories can offer predictions or (...) merely critique reasoning. We argue that theories are often open to multiple interpretations which can shift depending on the context in which the theory is applied, the surrounding economic literature, and the argument made by the interpreter. (shrink)

In these two volumes, David P. Levine undertakes the systematic clarification and further development of the theoretical contributions of classical political economy. It focuses on such central issues in economic theory as: * need, value and exchange * capital and its production * the concept of labour * growth * the firm * price determination. Throughout the treatment is at a high level of abstraction.

Economic theories of democratic legitimacy have criticized deliberative accounts of democratic legitimacy on the grounds that they do not represent a practical possibility and that they create conditions that make actual democracies worse. It is not simply that they represent the wrong ideal. Rather, they are too idealistic – failing to show proper regard for the cognitive and moral limitations of persons and the depth of disagreement in democratic society. This article aims to show that the minimalist criterion (...) of democratic legitimacy is self-defeating and that even if there are minimal cognitive, moral, and social requirements for the possibility of practicable deliberative democracy, these limitations do not necessarily impose insuperable barriers for democratic deliberation as the normative basis of democratic legitimacy. Thus, the limiting facts do not dictate the structure of appropriate normative models of democracy in the way minimalists have supposed. (shrink)

Standard economic theory has told us for more than half a century that, to attain a high level of social welfare, there is no viable alternative to a market economy regulated by a powerful state. Critics often represent standard economic theory as a doctrinal defense of the free market. The truth is quite the opposite. Free market ideology is unfounded. Standard economic theory provides the proper framework for analyzing market failure. This theory must of course be supplemented (...) by a theory of state failure, as well as a theory of nonstate solutions to market failures. Standard economic theory offers a poor approach to macroeconomic dynamics, but we complexity and evolutionary theorists are working on correcting this situation. (shrink)

Like a message in a bottle, How Is Critical Economic Theory Possible? originally written in the late 1960s in Hungarian, has recently arrived on the shores of critical theory in the form of an English translation. As a critique of Marx’s economic determinism, the authors aim to set Marxist thinking on a more realistic path. This article looks first, at what the authors think are flawed premises in Marx’s work. Second, I sketch the contemporary economic context of (...) a global digital economy to point at issues a critical economic theory inevitably has to contend with today to prove its relevance. Finally, I argue that Maria Márkus’s ideas of a politicisation of needs and civil/decent society make a significant contribution to a potential answer to How Is Critical Economic Theory Possible? and also advance the idea of a mixed economy with the goal to sustain an economic order that allows a maximum of economic and political freedom while simultaneously reducing economic and political inequalities to a minimum. (shrink)

Contemporary economic theory is generally regarded as a scientific or at least potentially so. The replacing of the cardinal theory of utility measurement by the ordinal theory was supposed to prepare the groundwork for economics as a genuine science. But in adopting the ordinal approach, theorists saw fit to anchor ordinal theory to axioms of choice founded on principles of rational behavior. Behavior according to these axioms was embodied in the ideal type model of rational economic man. This (...) model served the basis for scientific explanation of the choices made by actual economic agents. I argue though that the postulate of rationality is a normative principle and that this compromises the scientific pretensions of economic theory. Yet the theorist must rely on this principle to formulate predictive and explanatory theories. This raises questions as to whether it is possible that economic theory satisfy the same kind of scientific criteria set down for research in the natural sciences. (shrink)

The goal of “Inclusive Economics” is to tie together various authoritative strands of contemporary economic theory into an easily comprehensible whole that illuminates the need for a broader approach to contemporary economic policymaking undistorted by obsolete 18th century rationalist assumptions about utility, ethics, worthiness and traditional culture. This is accomplished by elaborating the rationalist competitive ideal along the optimizing lines pioneered by Paul Samuelson (neoclassical economics); plumbing modifications necessitated by Herbert Simon's realist concepts of “bounded rationality” and “satisficing”; (...) refined further by applying a pragmatist outlook to probe the consequences of relaxing Enlightenment teleological, ethical, spiritual and cultural taboos. The exercise will explain why competitive market economies guided by rational utility-seeking invariably are less productive, efficient, just and beneficent than most theorists concede, and will illuminate the full range of interventions needed to achieve better outcomes. We call this program in its entirety “Inclusive Economics”, including the integration of micro and macroeconomics. (shrink)

This paper evaluates the economic assumptions of economic theory via an examination of the capitalist transformation of creditor–debtor relations in the 18th century. This transformation enabled masses of people to obtain credit without moral opprobrium or social subordination. Classical 18th century economics had the ethical concepts to appreciate these facts. Ironically, contemporary economic theory cannot. I trace this fault to its abstract representations of freedom, efficiency, and markets. The virtues of capitalism lie in the concrete social relations (...) and social meanings through which capital and commodities are exchanged. Contrary to laissez faire capitalism, the conditions for sustaining these concrete capitalist formations require limits on freedom of contract and the scope of private property rights. (shrink)

Surveys the contributions that economic theory has made to the often contentious debate over the government's use of its power of eminent domain, as prescribed by the Fifth Amendment. It addresses such questions as: when should the government be allowed to take private property without the owner's consent? Does it depend on how the land will be used? Also, what amount of compensation is the landowner entitled to receive? The recent case of Kelo v. New London revitalized the debate, (...) but it was only the latest skirmish in the ongoing struggle between advocates of strong governmental powers to acquire private property in the public interest and private property rights advocates. Written for a general audience, the book advances a coherent theory that views eminent domain within the context of the government's proper role in an economic system whose primary objective is to achieve efficient land use. (shrink)

Patient autonomy, as exercised in the informed consent process, is a central concern in bioethics. The typical bioethicist's analysis of autonomy centers on decisional capacity—finding the line between autonomy and its absence. This approach leaves unexplored the structure of reasoning behind patient treatment decisions. To counter that approach, we present a microeconomic theory of patient decision-making regarding the acceptable level of medical treatment from the patient's perspective. We show that a rational patient's desired treatment level typically departs from the level (...) yielding an absence of symptoms, the level we call ideal. This microeconomic theory demonstrates why patients have good reason not to pursue treatment to the point of absence of physical symptoms. We defend our view against possible objections that it is unrealistic and that it fails to adequately consider harm a patient may suffer by curtailing treatment. Our analysis is fruitful in various ways. It shows why decisions often considered unreasonable might be fully reasonable. It offers a theoretical account of how physician misinformation may adversely affect a patient's decision. It shows how billing costs influence patient decision-making. It indicates that health care professionals' beliefs about the ‘unreasonable’ attitudes of patients might often be wrong. It provides a better understanding of patient rationality that should help to ensure fuller information as well as increased respect for patient decision-making. (shrink)

Context: Due to its grounding in a simplistic core model, mainstream theoretical work in economics is heavily conditioned by a realist epistemic framework that may be viewed as the “paradogma” – sensu Mitterer – of economics. Problem: The contribution delineates theoretical developments on the basis of a realist epistemology and their problem-laden consequences for the economic sciences. The subsequent critical discussion seeks to clarify whether economic theory formation is a suitable field for the application of Mitterer’s non-dualist ideas. (...) Method: In the context of a review of their historical background, the paper will explore the possibilities and limits of an application of Mitterer’s non-dualist argumentation to the economic sciences, and present a diagnosis of compatibility and a characterisation of necessary steps towards amplification. Results: It can be shown that the economic sciences would gain in expert knowledge and applicability by adopting the alternative of non-dualism, whose potential has been little appreciated so far. The solution to the meta-scientific problems caused by the pre-structuring of economics in terms of a realist epistemology seems at hand. To take up this new meta-scientific perspective, however, theoretical progress in both non-dualism and economics is required, particularly by paying more serious attention to the theoretical component of communication. Implications: Non-dualism can certainly be utilised by the economic sciences to induce radical innovations and conceptional revisions involving higher meta-scientific consistency. In future, pragmatic gaps will increasingly have to be filled conceptually in order to develop more highly-reflected economic theory formation and corresponding scientific practice. Hence the main idea is that economic actions are inevitably, but not exclusively, based on communication. Constructivist content: Theoretical approaches embracing epistemic relativism in the economic sciences will be properly assessed and developed further along the lines of a non-dualist conceptual revision on the basis of an ontology-free understanding of reality. (shrink)

Many authors in the discipline as well as outsiders have claimed that the main results from Mathematical Economics are far removed from real world phenomena. A more precise version of this position is that one of the main reasons for this unrealistic stance is the use of the wrong formal tools. So, for example, it has been pointed out that the computability of choice functions as well as the existence of economic equilibria and of states of the world may (...) not be ensured in general if the assumed set theory is ZFC. We will show that there exists a very natural set theory that overcomes some formal limitations of contemporary economic theory. A switch to an alternative set theory helps to obtain in a more natural way results widely accepted by mathematical economists. Moreover, alternative set-theoretical frameworks convey different intuitions about how agents behave when solving problems. We claim that AFA−+AD+DC is the adequate alternative set-theoretical universe for economic theory. (shrink)

This is a review of the book “The Future of Law and Economics” by American legal philosopher and judge Guido Calabresi (Moscow: Institut Gaidara, 2016). Author considers the theoretical aspects of the bilateral relations between the economic theory and legal studies developed by Calabresi. The author analyzes the differences between the previous tradition of the economic approach to law, which was based on the principle of epistemological expansion of economic theory into the field of legal studies, and (...) the common program of “law and economic”, which is aimed to find the basis for the bilateral dialogue between these sides of social knowledge. Both programs assume some alternatives for the formal analysis of law. The author discusses the concept of merit good and evaluates the prospects for the reception of this concept in legal philosophy. (shrink)

This book brings together in a single coherent framework a research programme begun by the author in the forties. The main model around which the analysis is built is Hicksian in character, having been drawn in large part from John Hicks's Value and Capital. The model is extended so as to include money and securities. In respect of the theory of the firm the model focuses on demand and supply plans, on inputs and outputs, on inventories, and on dependencies between (...) them. The stability of temporary equilibrium is discussed for linear and non-linear cases. Because the concept of structural stability is important for understanding non-linear cases, it is defined and applied to the case of economic motion generated from the temporary equilibrium analysis. The addenda focus on developments in economic theory following the publication of the main model. (shrink)

This book covers a broad range of topics in the history of economics that have relevance to economic theories. The author believes that one of the tasks for a historian of economics is to analyze and interpret theories currently outside the mainstream of economic theory, in this case non-Walrasian economics. By doing so, he argues, new directions and new areas for research can be developed that will extend the current theories. Familiar topics covered include: the (...) division of labor, economies of scale, wages, profit, international trade, market mechanisms, and money. These are considered in the light of the well-known non-Walrasian schools of thought: the classical, Marxian, Austrian, and Cambridge schools. (shrink)

The doctrine of the “just price” is more than often described as the core of the “economic” thinking of the Scholastics (de Roover 1958; Baldwin 1959; Wilson 1975; Worland 1977). In fact, one could hardly contest that the notion occupies a place of high importance in the economic reflections of the Medieval Doctors. It is of no doubt that their study of economic reality led them to call up very frequently the said notion of “just price”. Yet (...) the insistence with which modern historiography has itself treated this – central but particular – element of the Scholastic economic thinking conceals, to our opinion, some of its important sights and interests. An “objective” approach of the scholastic theory seems to command such an interpretation. But why is the phrase “just price” so often used and developed by the Doctors? Such a simple question cannot be answered simply by focusing on the notion. From a more “methodological” point of view, just price appears only like the final result of a complex argumentation. Little attention has been given to the fact that (1) the issue at stake is less a problem of correctness in limited bargaining than a general question of social justice; (2) the method used to deal with this vast subject in the field of economic relations is a systematic “contractual” analysis. The second point forms the main theme of this paper. (shrink)

Bryan Caplan’s The Myth of the Rational Voter treats several immensely important and understudied topics—public ignorance of economics, political ideology, and their connection to policy error—from an orthodox economic perspective whose applicability to these topics is overwhelmingly disproven by the available evidence. Moreover, Caplan adds to the traditional and largely irrelevant orthodox economic notion of rational public ignorance the claim that when voters favor counterproductive economic policies, they do so deliberately, i.e., knowingly. This leads him to assume (...) (without any evidence) that “emotion or ideology” explain mass economic error. Straightforward, unchosen mass ignorance of economic principles—neither “rational” nor “irrational,” but simply mistaken—is a more coherent explanation for economic error, and it is backed up by the vast body of public‐opinion research. (shrink)

Economics is the only established discipline that is regularly charged not just with including ideologically motivated research programs and hypotheses, but with actually being (at least in its institutionalized mainstream form) an ideology. As Coleman (2002) documents, this charge has followed economics since its modern inception as ‘political economy’ in the eighteenth century. There is a veritable tradition of what Coleman calls ‘anti-economics’, most famously populated by people such as Ruskin and Carlyle, and extending in the contemporary environment to include (...) philosophers John Gray[1] and John Dupré,[2] numerous popular agitators associated with environmentalism and the self-styled ‘anti-capitalist’ and ‘anti-globalization’ movements, and no small number of disillusioned economists.[3] Of course all disciplinary establishments rightly attract critical literature; but as far as I know no one has ever published a book called ‘The Death of Geology’ featuring a hangman’s noose on the cover.[4] Coleman’s compendium of evidence shows conclusively, in case anyone hasn’t been keeping their eyes and ears open, that economics is actively hated by a substantial number of people. There is no other discipline of which this is true, except insofar as some people hate all actual and would-be scientific disciplines from religious, green, or aesthetic motivations. (shrink)

The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. We have changed, by insensible degrees, (...) our philosophy of economic life, our notions of what is reasonable and what is tolerable; and we have done this without changing our technique or our copybook maxims. Hence our tears and troubles. (shrink)

The Econometric Society holds a World Congress every five years. The program of these congresses has traditionally included a series of invited symposia, where speakers survey important recent advances in economic theory and econometrics. This volume, with its focus on economic theory and its companion volumes on econometrics contain papers delivered at the Fifth World Congress held in 1985. Designed to make material accessible to a general audience of economists, these articles should be helpful to anyone with training (...) in economics, who wishes to review past ideas and tendencies in the subject. Advances in Economic Theory - Fifth World Congress, edited by Professor Truman F. Bewley, includes a wide variety of topics, comprising empirical and policy orientated subjects as well as theoretical ones. (shrink)

Roughly speaking all economists can be divided into two groups--those who agree with Milton Friedman and those who do not. Both groups, however, espouse the view that science is a series of approximations to a demonstrated accord with reality. Methodological controversy in economics is now merely a Conventionalist argument over which comes first--simplicity or generality. Furthermore, this controversy in its current form is not compatible with one important new and up and coming economic (welfare) theory called "the theory of (...) the Second Best." In this paper I offer a Second Best meta-theory that says that (1) any compromise between simplicity and generality must yield a theory which is "third best" by these Conventionalist criteria; and (2) there exists a better way than a compromise. (shrink)