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New Pragmatism by G.W. Kolodko: an Alternative of Or a Supplement to Pure Economic Theory?

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New Pragmatism by G.W. Kolodko: an Alternative of Or a Supplement to Pure Economic Theory? 18 KWARTALNIK NAUK O PRZEDSIĘBIORSTWIE — 2019 / 1 Aleksandr Nekipelov New pragmatism by G.W. Kolodko: an alternative of or a supplement to pure economic theory? Scientific and technological pro- cesses. It is obvious that this fundamental gress has radically changed and con- problem, as well as its derivatives, has a tinues changing the life of human special economic dimension. community. Some thirty-forty years In the sphere of mutual relations be- ago people could not even imagine tween man and nature the conflict be- how their life would be modified as a tween growth and development manifests result of digital revolution, explosive itself in a sustained escalation of the prob- development of information and com- lem of environmental degradation result- munication technologies. Mesmerizing ing from human productive activity. It is prospects have opened due to accelerat- known that efforts to intensify productive ing penetration of mankind into the se- activity have had a mixed impact on the crets of microbiological and cognitive dynamics of human well-being. Immedi- processes, of the laws of matter at the ate result consists in the growing quan- nanoscale. Because of permanent pro- tity of goods, which meet the demands gress in basic and applied research peo- of the members of the society, and this ple are getting at their disposal more very effect stimulates people to scale up and more perfect technologies, which production. The growth of the human provide them with possibilities to meet population acts in the same direction. their material and spiritual needs on an The deterioration of the environment is a increasing scale. more remote and gradually accumulating effect of expanding exploitation of natu- But it is also well known that grow- ral resources, which negatively influences ing intellectual might does not save the people’s welfare. mankind from new challenges – both from the surrounding material world, and Growth vs development problem has its own organization as a society. Perhaps, numerous manifestations within the soci- in the most general way these challenges ety itself. Social – including economic – can be seen as a manifestation of a single institutes do not ensure that cultural val- big problem – non-identity of growth (in ues of different groups of people are fully the sense of permanent, though uneven, taken into account in the process of their increase of material and spiritual goods, interaction. This side of the case deserves knowledge and technologies at the dis- special attention in the period of globali- posal of mankind) and development pro- zation. In more general terms we can talk Praktyczna teoria 19 about constant failures in the process of ent currents within these disciplines their harmonization of interests, belonging to very existence testifies to the fact that eco- different interacting actors – both indi- nomic relations have by no means a casual viduals and their groups. The end result of character. The main task of micro- and the imperfection of institutes are conflicts macroeconomics is the same as the task – sometimes quite acute, and unfavorable of any other theory – to build the “intel- development of socio-economic processes. lectual layout” of the studied object. This As an example of such phenomena of con- model, reflecting main interconnections cern we can refer to deep differentiation of between different elements of economic incomes among separate people, regions, system, is designed to reveal the features countries and their radically different op- of its functioning and evolution under portunities of access to the achievement the influence of internal and external im- of modern civilization. pulses. Along with micro- and macroeconom- Numerous problems arise as a result of ics there exists another type of theoretical imperfect organization of economic life in disciplines. Their function is to develop modern society – both on a national and tools, which help those who study specific global level. The functioning of market economic processes to collect and process economy, which has become a universal data. Economic statistics and economet- form of economic order, is accompanied rics are precisely these disciplines. by deep crises. It is indicative that the In turn, applied economic research is main source of global perturbations is lo- designed to reveal and estimate processes, calized now rather in the financial than which occur in specific economic systems real sector of the economy. – global and national economies, regions, The problem is further aggravated by branches etc. On the one hand, applied the existence of a complicated system of research is based on conclusions of eco- feedback between different challenges nomic theory (in this sense the latter is facing the mankind. The tension growing its methodological foundation) and take along the line of man – nature is projected advantage of research tools developed by on the system of social institutions; the theoreticians, but, on the other hand, it latter has a strong impact on the character allows to confirm or to reject general con- of human productive activity and, there- clusions of economic theory. fore, on his mutual relations with nature. How to unravel this extremely com- An opinion that economic science or- plex tangle of problems? Can modern eco- ganized in such a manner does not allow nomic science be useful in this? – here are to formulate clear answers to challenges question, which attract more and more at- faced by humanity in its economic activ- tention of social scientists and politicians. ity has become quite widespread nowa- days. Obvious failures in forecasting The heterodox answer important economic events, on the one Historically economic science embrac- hand, and multiple cases of inefficiency es a wide range of disciplines both of basic of practical recommendations made on its and applied character. From this point of behalf, on the other hand, are considered view, it does not differ much from natural as the most convincing evidences of the sciences. crisis of modern economic science. The General economic theory (economics) most vivid example of the first kind is the is represented by two sciences – micro- huge world financial and economic crisis and macroeconomics. Despite the differ- of 2007-2009, which, ironically, erupted 20 KWARTALNIK NAUK O PRZEDSIĘBIORSTWIE — 2019 / 1 soon after mainstream economists be- Back in 1998 V. Polterovich (1998) came confident that they had resolved the came to conclusion that the crisis of eco- problem of depression prevention (Lucas, nomic science is linked to impracticabil- 2003). The examples of the second kind ity of the task to transform it in a precise are numerous. I will limit myself to men- science such as theoretical mechanics or tioning now generally accepted inefficien- chemistry. The position of G.W. Kolod- cy of measures, known under the name of ko is quite close to this point of view: Washington consensus, which were heav- he argues that in the system of sciences ily imposed on post-socialist countries. economic theory occupies the place be- Such failures of modern economic tween hard precise mathematics and soft science can be considered as obvious ex- abstract philosophy. amples of its crisis. However, the task The rejection of exclusive reliance on of researchers is not to state the existing logical structures and the intention to problems. The next, more difficult step is bring economic science closer to solving to reveal the nature of the crisis, its deep practical problems led to the spread of foundations. G.W. Kolodko’s concept of the point of view, according to which this new pragmatism is an example of the so- science should absorb results of different called heterodox approach in economic spheres of knowledge, i.e. to have multi- science, whose methodological founda- disciplinary and heterogeneous character. tions are analyzed in this section. Prof. V. Polterovich brings this thesis to its logical conclusion, advocating for the The representatives of this approach replacement of economic theory by gen- are questioning the validity of the at- eral social analysis. His idea is that … all tempt to construct economic theory in attempts to determine the area of economic the image and likeness of natural sciences, phenomena proper lead to the insolvabil- i.e. basing on a set of axioms and logical ity of the main economic problems (Pol- inferences and with wide application of terovich, 2013, p. 181). The functioning mathematical technique (Pigou, 1932). and development of social institutes as a Consequently, an obvious simplicity of whole should become the subject of gen- hypotheses (axioms) referring to specific eral social analysis. Studies, which are features of human behavior, on which carried out within general social analysis, economics is based, becomes an object of should be supported by a single database criticism. Among them are the theoreti- and their common analytical apparatus cal constructs used by modern economic should consist of statistical processing of theory to characterize both individual be- data (econometrics) and game theory, the havior, and social goal-setting. latter being treated as an abstract disci- Attention is attracted to the fact that pline explaining the formation of norms agents with consciousness and their own of behavior (Polterovich, 2013, p.184). interests act in society and their ideas The author himself emphasizes an eclec- about reality can directly influence it. tic character of this construct: Modern One of the consequences of such a state institutional analysis with its methodologi- of affairs is a fluidity of economic envi- cal eclecticism could become a convenient ronment, which leads to the rapid obso- platform for synthesis (Polterovich, 2013, lescence of any models that claim com- p. 185). pleteness. At last, the fallacy of ignoring The concept of new pragmatism by non-economic factors of economic devel- G.W. Kolodko is also based on the fact opment is emphasized, especially of cul- that economic theory should be primar- tural and political character.
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