Orthodox and Heterodox Economics in Recent Economic Methodology
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Positivism and the Separation of Law and Economics
Columbia Law School Scholarship Archive Faculty Scholarship Faculty Publications 1996 Positivism and the Separation of Law and Economics Avery W. Katz Columbia Law School, [email protected] Follow this and additional works at: https://scholarship.law.columbia.edu/faculty_scholarship Part of the Business Organizations Law Commons, and the Law and Economics Commons Recommended Citation Avery W. Katz, Positivism and the Separation of Law and Economics, 94 MICH. L. REV. 2229 (1996). Available at: https://scholarship.law.columbia.edu/faculty_scholarship/610 This Essay is brought to you for free and open access by the Faculty Publications at Scholarship Archive. It has been accepted for inclusion in Faculty Scholarship by an authorized administrator of Scholarship Archive. For more information, please contact [email protected]. POSITIVISM AND THE SEPARATION OF LAW AND ECONOMICS Avery Wiener Katz* INTRODUCION The modem field of law and economics - that is, the application of economic analysis to legal subjects other than trade and business reg- ulation - is now over thirty years old, but it remains controversial in the legal academy and, to a lesser extent, in the profession at large. Since its beginnings in the early 1960s, the economic approach has pro- voked substantial opposition and antagonism. The sources of this resis- tance, however, are a matter of dispute. Many economists and economi- cally influenced lawyers attribute it to more traditional lawyers' reluctance to learn a new and unfamiliar set of concepts and techniques. Critics of the economic approach offer a variety of other explanations. Some are skeptical of the utility of abstract theoretical modeling in the social sciences,' others object to economics' central behavioral assump- tion of rational choice,2 still others criticize economics' supposed liber- tarian politics and ideological allegiance to laissez-faire. -
Here with Permission
Heterodox Economics Newsletter WHO'S AFRAID OF JOHN MAYNARD KEYNES? CHALLENGING ECONOMIC GOVERNANCE IN AN AGE OF GROWING INEQUALITY, by Paul Davidson, Palgrave-MacMillan: 2017, pp. 162; ISBN 978-3- 319-64502-2. Reviewed by James K. Galbraith1 Originally appearing in the Journal of Behavioral and Experimental Economics, this review is reprinted here with permission. Paul Davidson, in his ninth decade, has produced a crisp and clear exegesis of essential Keynesian ideas and the critical failures of so-called mainstream economic thought. The most critical flaw lies in the treatment of time. Rooted in ancient ideas of equilibrium, harmony and social balance, mainstream economics treats the future as an extrapolation of the past, predictable except for random errors, which are called “risk.” This as Davidson insists is incurably incorrect; there is uncertainty and at any time financial markets are prone to collapse in a failed flight to safety, which drains liquidity and deprives both financial and physical assets of their market value. From this it follows that in the social sphere any model that projects the future from the past will fail from time to time. The models work so long as things do not change! As for change, for turning points, they nevertheless occur. And that those who believe most in the model will prepare the least and be hurt the worst. And yet, for the economy to function, “belief” in the model – at the least, conditional belief sufficient to motivate consumption and investment – appears essential. Without it, the private economy cannot prosper. Living in a house of cards is better than having no house at all. -
Evaluating the Atheoretical Turn in Economics 1
Form and Function: Evaluating the Atheoretical Turn in Economics Meredith M. Paker Nuffield College University of Oxford meredith.paker@nuffield.ox.ac.uk Prepared for Philosophy and Methodology of Economics Economic and Social History June 2017 1 Introduction Since the late 1990s, research in economics has increasingly employed “atheoretical” exper- imental and quasi-experimental methods.1 As laboratory and field experiments became more accepted in the discipline, paralleling the rise of behavioral economics, statistical quasi-experimental methods were developed and standardized. These tools, including difference-in-difference, regression discontinuity, and instrumental variable approaches, have made quasi-experimental analyses of natural or institutional variation more ac- cessible, popular, and persuasive. Experimentally-based approaches are now common throughout the discipline and are especially prominent in empirical microeconomic re- search, where they have displaced structural and theory-driven work in fields such as labor, education, and public economics.2 Two main reasons are often cited for the growth of work in experimental economics. First, experimentally-based methods are seen as “atheoretic” when compared with tradi- 1. “Economists are prone to fads, and the latest is machine learning,” The Economist, November 2016, http://www.economist.com/news/finance-and-economics/21710800-big-data-have-led- latest-craze-economic-research-economists-are-prone, In addition to an increase in machine learning methods, the figure shows a remarkable upward trend in laboratory, randomized control trial, difference-in-difference, and regression discontinuity approaches. 2. John Rust, “Comments on ‘Structural vs. Atheoretic Approaches to Econometrics’ by Michael Keane,” Journal of Econometrics 156, no. 1 (2010): p. 21. 1 tional structural methods that make a priori parametric assumptions.3 Second, structural modeling is difficult, time consuming, and less likely to be appreciated by academic jour- nals looking for intuitive and easily-explained work. -
The Routledge Handbook of Heterodox Economics Theorizing, Analyzing, and Transforming Capitalism Tae-Hee Jo, Lynne Chester, Carlo D'ippoliti
This article was downloaded by: 10.3.98.104 On: 27 Sep 2021 Access details: subscription number Publisher: Routledge Informa Ltd Registered in England and Wales Registered Number: 1072954 Registered office: 5 Howick Place, London SW1P 1WG, UK The Routledge Handbook of Heterodox Economics Theorizing, Analyzing, and Transforming Capitalism Tae-Hee Jo, Lynne Chester, Carlo D'Ippoliti The social surplus approach Publication details https://www.routledgehandbooks.com/doi/10.4324/9781315707587.ch3 Nuno Ornelas Martins Published online on: 28 Jul 2017 How to cite :- Nuno Ornelas Martins. 28 Jul 2017, The social surplus approach from: The Routledge Handbook of Heterodox Economics, Theorizing, Analyzing, and Transforming Capitalism Routledge Accessed on: 27 Sep 2021 https://www.routledgehandbooks.com/doi/10.4324/9781315707587.ch3 PLEASE SCROLL DOWN FOR DOCUMENT Full terms and conditions of use: https://www.routledgehandbooks.com/legal-notices/terms This Document PDF may be used for research, teaching and private study purposes. Any substantial or systematic reproductions, re-distribution, re-selling, loan or sub-licensing, systematic supply or distribution in any form to anyone is expressly forbidden. The publisher does not give any warranty express or implied or make any representation that the contents will be complete or accurate or up to date. The publisher shall not be liable for an loss, actions, claims, proceedings, demand or costs or damages whatsoever or howsoever caused arising directly or indirectly in connection with or arising out of the use of this material. 3 The social surplus approach Historical origins and present state Nuno Ornelas Martins Introduction For classical political economists, the social surplus is the part of production that is not necessary for the reproduction of the existing social system. -
'Value': an Exercise for Embedding Heterodox Economics Into Sociology
The value in ‘value’: An exercise for embedding heterodox economics into sociology and social policy education Nathan Coombs (University of Edinburgh) Ashley Frawley (Swansea University) Abstract With continuing resistance by economics departments to pluralising their curricula, heterodox economists have suggested an alliance with other social sciences. This article suggests the labour theory value (LTV) as an appropriate concept for embedding heterodox ideas into sociology and social policy teaching. While often seen as a relic of nineteenth century political economy, teaching LTV is beneficial as (1) it is one of few economic theories addressing causes of economic inequality and (2) the contrast with neoclassical subjective value theory (STV) facilitates discussion about relationships between different ideas of ‘value’ and conflicting political ideas about social justice. We present a series of exercises designed to introduce students to differences between STV and LTV. After running and modifying exercises over three years, we find the intervention broadly successful in encouraging students to engage with economic ideas and draw connections between personal experience, society, economics and politics. Keywords Value theory, heterodox economics, economic sociology, social policy, inequality, pedagogy 1. Introduction: bringing heterodox economics to sociology and social policy 1.1. The impasse in economics teaching In the wake the 2007-9 financial crisis there were high hopes for reform within the economics profession. Student groups demanded broader and more applied curricula, government reports were issued on the state of the profession, and there were even fleeting glimpses of introspection within the discipline’s mainstream (Inman, 2013). Yet, commentators have observed that these efforts have left surprisingly little impression (Coyle, 2012; Morgan, 2015). -
A Synthesis of Law and Economics John Cirace
SMU Law Review Volume 44 | Issue 3 Article 4 1990 A Synthesis of Law and Economics John Cirace Follow this and additional works at: https://scholar.smu.edu/smulr Recommended Citation John Cirace, A Synthesis of Law and Economics, 44 Sw L.J. 1139 (1990) https://scholar.smu.edu/smulr/vol44/iss3/4 This Article is brought to you for free and open access by the Law Journals at SMU Scholar. It has been accepted for inclusion in SMU Law Review by an authorized administrator of SMU Scholar. For more information, please visit http://digitalrepository.smu.edu. A SYNTHESIS OF LAW AND ECONOMICS by John Cirace I. INTRODUCTION ~E purpose of this Article is to effect a synthesis of law and econom- is that is acceptable to both lawyers and economists; in other words, 1 2 r1.aosynthesis acceptable to those who think like and have values of lawyers as well as those who think like3 and have values4 of economists. Section One discusses the criticisms that lawyers and economists make of each other's values and methodology, and outlines a way to synthesize these conflicting values and different methodologies. * Professor of Economics, The City University of New York; Adjunct Professor of Law, Brooklyn Law School. Harvard University, B.A., 1962; Stanford Law School, J.D., 1967; Columbia University, Ph.D., 1975. I wish to thank the students in my Law & Econom- ics classes at Brooklyn Law School, Spring, 1989 and Spring, 1990; their unremitting criticism of economic analysis of law for its nearly total disregard of equitable considerations continu- ally forced me to rethink my assumptions and approach. -
Why Does Methodology Matter for Economics? Reviewed Work(S)
Review: Why Does Methodology Matter for Economics? Reviewed Work(s): The Methodology of Economics: Or How Economists explain. by Mark Blaug's The Inexact and Separate Science of Economics. by Daniel Hausman's Economics: Mathematical Politics or Science of Diminishing Returns. by Alexander Rosenberg The Principles of Economics: Some Lies My Teachers told me. by Lawrence A. Boland Kevin D. Hoover The Economic Journal, Vol. 105, No. 430. (May, 1995), pp. 715-734. Stable URL: http://links.jstor.org/sici?sici=0013-0133%28199505%29105%3A430%3C715%3AWDMMFE%3E2.0.CO%3B2-7 The Economic Journal is currently published by Royal Economic Society. Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at http://www.jstor.org/about/terms.html. JSTOR's Terms and Conditions of Use provides, in part, that unless you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you may use content in the JSTOR archive only for your personal, non-commercial use. Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at http://www.jstor.org/journals/res.html. Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed page of such transmission. The JSTOR Archive is a trusted digital repository providing for long-term preservation and access to leading academic journals and scholarly literature from around the world. The Archive is supported by libraries, scholarly societies, publishers, and foundations. -
Presenting Complex Economic Theories to Judges 2008
Presenting Complex Economic Theories to Judges 2008 Unclassified DAF/COMP(2008)31 Organisation de Coopération et de Développement Économiques Organisation for Economic Co-operation and Development 16-Dec-2008 ___________________________________________________________________________________________ English, French DIRECTORATE FOR FINANCIAL AND ENTERPRISE AFFAIRS COMPETITION COMMITTEE Unclassified DAF/COMP(2008)31 Cancels & replaces the same document of 02 December 2008 TECHNIQUES FOR PRESENTING COMPLEX ECONOMIC THEORIES TO JUDGES French English, JT03257559 Document complet disponible sur OLIS dans son format d'origine Complete document available on OLIS in its original format DAF/COMP(2008)31 FOREWORD This document comprises proceedings in the original languages of a Roundtable on Techniques for Presenting Complex Economic Theories to Judges held by the Competition Committee (Working Party No. 3 on Co-operation and Enforcement) in February 2008. It is published under the responsibility of the Secretary General of the OECD to bring information on this topic to the attention of a wider audience. This compilation is one of a series of publications entitled "Competition Policy Roundtables". PRÉFACE Ce document rassemble la documentation dans la langue d'origine dans laquelle elle a été soumise, relative à une table ronde sur les Techniques Permettant d’Exposer des Théories Economiques Complexes à des Juges qui s'est tenue en février 2008 dans le cadre du Comité de la concurrence (Groupe de Travail No. 3 sur la coopération et l’application de la loi). Il est publié sous la responsabilité du Secrétaire général de l'OCDE, afin de porter à la connaissance d'un large public les éléments d'information qui ont été réunis à cette occasion. -
Financialization in Heterodox Economics
Financialization in Heterodox Economics Dimitris P. Sotiropoulos Department of Accounting and Finance, The Open University Business School, UK. Email: [email protected] Ariane Hillig Institute of Management Studies, Goldsmiths, University of London, UK. Email: [email protected] Abstract: The term financialization occupies a centre-stage in non-mainstream approaches to economics. Existing research in heterodox economics sees changes in modern finance as a key aspect of the transformation of contemporary capitalism. However, there is considerable diversity in the way financialization is approached, studied, and analyzed in heterodox discussions, implying a range of different analytical frameworks, methodological assumptions, research questions, and strategies. The chapter presents and discusses the main strands of heterodox literature with regard to contemporary finance and overviews alternative research agendas. While the majority of heterodox economic approaches conceptualize financialization as dysfunctional to capitalist society, an emerging research agenda investigates the transformation of class relations and social conflicts that are related to financialization. Acknowledgments. We would like to thank Paul Auerbach, Ewa Karwowski and Philip Mader for their comments on an earlier version of this chapter. The responsibility of any remaining errors or omissions is ours alone. 1 Introduction There is a general consensus both in mainstream and heterodox economics that the role of finance has increased in contemporary capitalist societies since the 1980s, discussions further fuelled by the 2007 financial meltdown. While mainstream economic approaches have attempted to reconsider the concepts of market efficiency and/or financial risk (for instance, see Blinder, Lo and Solow, 2012 and Shin, 2010), heterodox studies have relied on the term financialization to explain how changes in modern finance have become core elements in the transformations of contemporary capitalism. -
Heterodox Economics Brochure
Journals Heterodox • Bulletin of Political Economy • Cambridge Journal of Economics • Cahiers d’Economie Politique Economics • Capital & Class • Contributions to Political Economy • Economic Issues • European Journal of Economics and Economic Policies: Intervention • Feminist Economics • Forum for Social Economics • International Journal of Pluralism and Economics Education • International Journal of Political Economy • International Review of Applied Economics • Journal of Australian Political Economy • Journal of Economic Issues • Journal of Evolutionary Economics • Journal of Institutional Economics • Journal of Post Keynesian Economics • Journal of Socio-Economics • Metroeconomica • PSL Quarterly Review • Real-World Economics Review • Rethinking Marxism • Review of International Political Economy • Review of Keynesian Economics • Review of Political Economy • Review of Radical Political Economics • Review of Social Economy • Revue de la Régulation • World Economic Review Heterodox Economics Directory The informational Directory for Heterodox Economists: www.heterodoxnews.com Graduate and Undergraduate Programs, Journals, Publishers and Book Series, Associations, Institutes, Alternative Blogs, and Other Web Sites. First published in 2005. www.heterodoxnews.com/hed Updated in 2008, 2011, and 2013. Find out more at the Directory website. W: heterodoxnews.com/hed Critical Theory www.heterodox-economics.org to the Status Quo Another Economics is Possible. Another World is Possible. Heterodox Economics Associations Graduate Programs The heterodox economists have proposed to substitute • Association d’Economie Politique (AEP) Ph.D. Programs the study of economic institutions for the study of wants, • Association for Economics and Social Analysis (AESA) • American University, US satisfaction, and the wonderful contrivance of human • Association for Evolutionary Economics (AFEE) • Colorado State University, US nature as made manifest in the equilibrium prices. • Association for Heterodox Economics (AHE) ⎯⎯ Clarence E. -
The Changing Face of Mainstream Economics by David Colander Ric
The Changing Face of Mainstream Economics by David Colander Ric Holt Barkley Rosser November 2003 MIDDLEBURY COLLEGE ECONOMICS DISCUSSION PAPER NO. 03-27 DEPARTMENT OF ECONOMICS MIDDLEBURY COLLEGE MIDDLEBURY, VERMONT 05753 http://www.middlebury.edu/~econ The Changing Face of Mainstream Economics David Colander, Ric Holt and Barkley Rosser 1. Introduction If one reads the heterodox literature in economics these days, one gets the impression that modern mainstream economics is much like the economics of 50 years ago; it is called neoclassical economics and is criticized in much the same way that earlier heterodox economists criticized the mainstream economics of the 1950s or 1960s. In this paper we argue that much of this criticism today is off the mark because mainstream economic thinking has changed. We argue that economics is moving away from a strict adherence to the holy trinity—rationality, selfishness, and equilibrium—to a more eclectic position of purposeful behavior, enlightened self-interest and sustainability. The paper develops our ideas by considering the nature of that change and the process and sociological dynamics by which the profession changes. 2. The Profession as a Complex System To understand our argument it is helpful to think of the profession as a complex system. Complex systems cannot be understood from assumed first principles; they can only be understood through the process of change that underlies them. In the same way, the economics profession can best be understood by the process of change that characterizes it. Most considerations of the economics profession have tended to take a static view of the profession, which makes it seem as if it is an unchanging entity. -
Economic Freedom and Inequality in the Art Market: the Case of the Commercial Gallery
arts Article Economic Freedom and Inequality in the Art Market: The Case of the Commercial Gallery Ronit Milano Department of the Arts, Ben-Gurion University of the Negev, Beer-Sheva 8410501, Israel; [email protected] Received: 13 August 2020; Accepted: 4 December 2020; Published: 8 December 2020 Abstract: This article aims to consider the contemporary art market vis-à-vis the concept of economic freedom. Drawn from a larger study, this paper offers a glimpse of the political function of the art market, which is essentially an economic field. What I demonstrate is an inevitable clash between a free market and between political constructions that effect levels of freedom—concentrating on the parameter of inequality. The article focuses on the case of commercial art galleries, and analyzes their operation under neoliberal conditions, which represent the implementation of the idea of freedom in the economic field. Subsequently, I demonstrate the how high levels of concentration in the art market erode the levels of the equality of the players in the field. Ultimately, I argue that this case offers an example of the more general operation of the art market, which follows neoliberal principles, and thereby undermines the concept of economic freedom that is intrinsic to them. Keywords: art market; neoliberalism; freedom; equality; concentration; competition 1. Introduction Before moving to its new home in Manhattan’s Meatpacking District in 2015, the Whitney Museum celebrated its last show in the Breuer building with a high-profile retrospective of works by the American celebrity artist Jeff Koons. This lavish exhibition, which featured artworks worth half-a-billion dollars, received leadership support from Gagosian Gallery, which represents Koons.