|
sanity,
humanity and science
post-autistic economics
review
Issue no. 18; February 5, 2003
back issues at www.paecon.net
Subscribers: 5,634 in approximately 140 countries
Subscriptions are free, To subscribe, email "subscribe". To
unsubscribe, email "unsubscribe". To subscribe
a colleague,
email" subscribe colleague" and give their email
address. Send to: pae_news@btinternet.com
In this issue:
-
Esther-Mirjam Sent
Pleas for Pluralism
-
Ana Maria Bianchi
Policy-Relevance in the Latin American
School of Economics
-
Steve Cohn
Common Ground Critiques of Neoclassical
Principles Texts
-
Jamie Morgan
How Reality Ate Itself: Orthodoxy, Economy &
Trust
-
Peter Wynarczyk
Austrian Economics and the Post-Autistic
Economics Challenge
-
Comment:
Wolff replies to Perino on the Absurdity of “Efficiency”
-
PAE economists in the news: Joseph
Stiglitz, Michael
Bernstein,
Steve Keen, Neva Goodwin, Deirdre McCloskey,
Stephen Ziliak, Bruce Caldwell,
Vernon Smith, Daniel Kahneman
Pleas for
Pluralism
Esther-Mirjam
Sent (University of Notre Dame, US, and Netherlands Institute
for Advanced Study in the Humanities and Social Sciences (NIAS))
Pleas
The
first stage of the movement that led to the establishment the Post-Autistic
Economics Network involved a group of economics
students in France publishing a petition in June 2000 under the banner
“autisme-économie.”1 Their plea was supported
by an appeal from some economics teachers in France. The second stage was
launched in September 2000 by the appearance of the first issue of the email
newsletter you find in your inbox. By its second issue, the Post-Autistic
Economics Newsletter had subscribers from 36 countries, and it currently has
over 5000 subscribers from over 100 countries. In November of 2000 http://www.paecon.net went in the air,
ushering in further international interest. In 2001, 27 economics Ph.D.
students at Cambridge University in England who have come to be known as the
“Cambridge 27” issued a petition entitled “Opening Up
Economics.” The third stage is where we are now and at which this
contribution carefully considers pleas for pluralism that have featured
prominently during the previous two stages, as well as before the
establishment of the Post-Autistic Economics Network. As Wade Hands (1997b,
194) observes: “The plea for pluralism in economics has been a frequent
refrain throughout the history of modern economic thought. This refrain has
usually been voiced by those who were outside, or critical of, the mainstream
in modern economics.”
Eight
years before the first stage mentioned in the previous paragraph, in 1992, a
group of economists issued a “Plea for a Pluralistic and Rigorous
Economics” in an advertisement in the American Economic Review, calling for “a new spirit of
pluralism in economics, involving critical conversation and tolerant
communication between different approaches. Such pluralism should not
undermine the standards of rigor; an economics that requires itself to face
all the arguments will be a more, not a less, rigorous science.”2
The announcement had been organized by Geoffrey Hodgson, Uskali
Mäki, and D. McCloskey, and signed by forty-four
illustrious names amongst which were Nobel laureates Franco Modigliani, Paul
Samuelson, Herbert Simon, and Jan Tinbergen.
In
1993, the International Confederation of Associations for Pluralism in
Economics (ICAPE) was founded as a
“consortium of over 30 groups in economics” that “seeks to
foster intellectual pluralism and a sense of collective purpose and
strength.”3 Its 1997 resource list contained 30 professional
associations, 32 academic and policy journals, 11 publishers, 16 departments,
16 centers, and 9 special projects, not all of
which were formally affiliated with ICAPE. The
consortium’s statement of purpose suggests: “There is a need for
greater diversity in theory and method in economic science. A new spirit of
pluralism will foster a more critical and constructive conversation among
practitioners of different approaches. Such pluralism will strengthen standards
of scientific inquiry in the crucible of competitive exchange.” ICAPE’s first conference on “The Future of
Heterodox Economics” will be held during the Summer of 2003.
The
“autisme-économie” petition mentioned
before, published in 2000, favored a pluralism of
approaches in economics.4 The French students wrote: “We
want a pluralism of approaches, adapted to the complexity of the objects and
to the uncertainty surrounding most of the big questions in
economics….” The petition of the economics teachers in France
also stressed the need for pluralism, focusing mostly on theories.5
They concluded: “Pluralism must be part of the basic culture of the
economist. People in their research should be free to develop the type and
direction of thinking to which their convictions and field of interest lead
them. In a rapidly evolving and evermore complex world, it is impossible to
avoid and dangerous to discourage alternative representations.”
The
proposal for reforming economics entitled “Opening Up Economics”
issued by the “Cambridge 27” in 2001, ends as follows: “We
are not arguing against mainstream methods, but believe in a pluralism of
methods and approaches justified by debate. Pluralism as a default implies
that alternative economic work is not simply tolerated, but that the material
and social conditions for its flourishing are met, to the same extent as is
currently the case for mainstream economics. That is what we mean when we
refer to an ‘opening up’ of economics.”6
Implicit
in all these appeals is the observation that economics lacks pluralism. The
pleas are defended by means of an assortment of arguments, such as
discussions of the complexity of the economy, evaluations of the restrictions
inherent in modeling, and assessments of the
cognitive limitations on the part of economists. The advertisement in the American Economic Review also employs
a reflexive strategy: “Economists today enforce a monopoly of method or
core assumptions, often defended on no better ground than it constitutes the
‘mainstream’. Economists will advocate free competition, but will
not practice it in the marketplace of ideas.”7 The remainder
of this contribution highlights some problems with the pleas for pluralism,
in an effort to open up ways for strengthening them further.
Pluralism?
Since
pluralism itself is a reflexive doctrine — there can be more than one
kind of pluralism — problems occur in using pluralism as an organizing
principle. First, the nature of pluralism in the various pleas differs. A
distinction needs to be made among theories, methods, methodologies,
approaches, perspectives, models, explanations, and so on (see, e.g., Salanti and Screpanti 1997).
Whereas the French students stress approaches, their teachers focus more on
theories, and the British students emphasize methods and approaches. Somewhat
troublingly, ICAPE’s statement of purpose
appears to confuse methods and methodologies, for instance when it notes:
“One conspicuous consequence of the homogenization of economics has
been a loss of methodological pluralism.” Now, pluralism about
methodologies involves adopting a pluralistic position towards one’s
own understanding of the multifaceted enterprise of economics, borrowing from
a wide variety of “shelves,” including history, literary
criticism, philosophy, and sociology (see, e.g., Hands 2001). This is not
what ICAPE’s reference to methodological
pluralism intends to address. Instead, it is concerned with pluralism about
methods, which involves types of models, reasoning, and so on upon which
economics relies (see, e.g., Dow 1997, 2002).
Second,
the source of pluralism varies. It could be ontological, epistemological,
pragmatic, historical, sociological, heuristical,
political, and so on (see, e.g., Salanti and Screpanti 1997). Whereas the French students focus on
complexity and uncertainty, their teachers emphasize a wide range of
contextual matters, and the British students are not explicit about the
source of pluralism. Let us take a closer look at the mechanisms outlined by
the teachers: “Pluralism is not just a matter of ideology, that is of
different prejudices or visions to which one is committed to expressing.
Instead the existence of different theories is also explained by the nature
of the assumed hypotheses, by the questions asked, by the choice of a
temporal spectrum, by the boundaries of problems studied, and, not least, by
the institutional and historical context.” The argument that theories
vary across different scientific contexts (domains, times, interests, et
cetera) raises the question whether for every phenomenon, question, and so on
there would be a single, best account. If so, then this view seems to reduce
to monism, which foreshadows the arguments of the subsequent sections. Before
moving there, we will make one more observation concerning pluralism.
Third,
not much thought seems to have been given as to the classification of
pluralism. The various objects of pluralism could be translatable or not and
might be compatible or not. Reflexivity concerns should keep one from casting
the classification in terms of complements and substitutes (see, e.g., Mäki 1999). The French students, their teachers, and the
British students all seem to view heterodox and neoclassical economics as
neither translatable nor compatible. This, again, introduces the possibility
of a reduction to monism, as elaborated in the following sections.
Monism!
Most
importantly, despite these apparent appeals to pluralism, upon closer scrutiny,
the pleas seem to be inspired my monism about theories. This motivation is
evidenced, for example by the observation that the first conference of the
International Confederation of Associations for Pluralism in Economics (ICAPE) is on the future of heterodox economics, while
orthodox economics is considered to be “vapid, exclusionist, and
detached from its social and political milieu.” The French students
write about neoclassical economics: “We no longer want to have this
autistic science imposed on us.” And their teachers concur: “Neoclassicalism’s fiction of a
‘rational’ representative agent, its reliance on the notion of
equilibrium, and its insistence that prices constitute the main (if not
unique) determinant of market behavior are at odds
with our own beliefs.”
Using
a label introduced by Ronald Giere (forthcoming),
the appeals to pluralism on the part of heterodox economics may be seen as an
instance of strategic pluralism. Though advocacy of pluralism by the French
students, their teachers, and the British students may be couched in
metaphysical or epistemological terms, could be primarily inspired by efforts
to achieve professional power and dominance. John Davis (1997, 209; original
emphasis), therefore, concludes that the motivation of heterodox economists
“is not that their own theoretical approaches are also correct — a theoretical pluralist view — but
rather than neoclassical economics is mistaken and misguided in its most
basic assumptions, and that their own approaches remedy the deficiencies of
neoclassicism — a theoretical monist view.”
Also
against the spirit of pluralism, heterodox economists appear to be offering a
rather monist reading of the mainstream. The French students “oppose
the uncontrolled use of mathematics,” their teachers “denounce
the naïve and abusive conflation that is often made between scientificity and the use of mathematics,” and the
British students dispute the “commitment to formal modes of reasoning
that must be employed for research to be considered valid.” Which
mathematical formalism do they oppose (see, e.g., Hands and Mirowski 1998; Mirowski and
Hands 1998)? Is it that of the University of Chicago Economics Department (in
particular Milton Friedman and George Stigler), of the Cowles Commission at
the University of Chicago (especially Kenneth Arrow and Gerard Debreu), or of the Massachusetts Institute of Technology
(most notably Paul Samuelson)? Or is it the mathematical formalism of the
game theoretic approach of John von Neumann and Oskar
Morgenstern, or of John Nash? And how about efforts to incorporate bounded
rationality approaches, behavioral insights, chaos
theory, complexity approaches, and experimental methods? As Sheila Dow (2002,
7) suggests: “[M]ainstream economics gives
the appearance of a moderate form of pluralism.” By monistically
equating orthodox economics with mathematical formalism, therefore, heterodox
economists ignore the fragmentation of the mainstream and manoeuvre
themselves in a vulnerable position.
Concluding
Comments
If
heterodox economists are serious about their advocacy of pluralism, as we
hope they are, they need to carefully consider the nature, source, and
classification of pluralism.8 And they need to confront the charge
that pluralism inevitably leads to an “anything goes” view. They
also need to beware of sliding into monism. For instance, an ontological
perspective that stresses the patchiness of the world runs the risk of being
reduced to monism because it might be consistent with the idea that for every
phenomenon there is a single, best account. An epistemological view that
involves the hedging of bets may reduce to monism if the long-term goal is a
single comprehensive account. An epistemological view that relies on the
cognitive limitations of economists may reduce to monism if the limitations
are merely delaying the development of a single, complete, and correct
theory. If heterodox economists desire pluralism, they need to honor its spirit when offering interpretations of the
mainstream. If heterodox economists employ appeals to pluralism strategically
in an effort to achieve monism, they leave themselves vulnerable to
criticism. Finally, they need to ensure, as stressed by the British students,
that the material and social conditions for the flourishing of pluralism are
met.
Notes
1. A brief history of the
Post-Autistic Economics Network is available at http://www.paecon.net/.
2. The advertisement appeared in American
Economic Review 82 (2): xxv.
3. Information on ICAPE can be found at http://www.econ.tcu.edu/econ/icare/main.html.
4. The text of the French students’ petition is available at http://www.btinternet.com/~pae_news/texts/a-e-petition.htm.
5. The text of the professors’ petition circulated in France can be
found at
http://www.btinternet.com/~pae_news/texts/Fr-t-petition.htm.
6. The open letter of the 27 Ph.D. students at Cambridge University may be
accessed at http://www.btinternet.com/~pae_news/Camproposal.htm.
7. One of the organizers of the plea, Uskali Mäki (1999), clarifies that some economists who are
supporters of free market (object-)economics refused to sign, whereas some
economists who are less enthusiastic about free market (object-)economics did
sign. He conjectures that “when economists talk about the ‘free
market’ of ideas, they do not use the expression in the sense in which
it appears in their theories of the goods market” (504). This enables
consistency, but eliminates full self-referentiality.
8. Some of these observations draw on a very insightful list of questions
about scientific pluralism that was drawn up by Stephen Kellert,
Helen Longino, and Kenneth Waters in preparation
for a workshop on scientific pluralism. The list is available at http://www.mcps.umn.edu/pluralism/outstanding_questions.html.
References
Davis, John B. (1997),
“Comment”, in Salanti and Screpanti 1997, 207-11.
Dow, Sheila C. (1997), “Methodological Pluralism and Pluralism of
Method”, in Salanti and Screpanti
1997, 89-99.
———. (2002), “Pluralism in Economics”, Paper
presented at the Annual Conference of the Association of
Institutional and Political Economics, 29 November 2002.
Giere, Ronald N. (forthcoming), “Perspectival Pluralism”, in Stephen Kellert, Helen Longino, and C.
Kenneth Waters (eds.), Scientific
Pluralism, Minnesota Studies in the Philosophy of Science.
Hands, D. Wade (1997), “Frank Knight’s Pluralism”, in Salanti and Screpanti 1997,
194-206.
——— (2001), Reflection
Without Rules: Economic Methodology and Contemporary Science Theory.
Cambridge: Cambridge University Press.
Hands, D. Wade and Philip Mirowski (1998), “Harold Hotelling and the
Neoclassical Dream” in Roger
Backhouse, Daniel Hausman, Uskali Mäki, and Andrea Salanti (eds.), Economics
and Methodology:
Crossing Boundaries. London: Macmillan, 322-97
Mäki, Uskali
(1999), “Science as a Free Market: A Reflexivity Test in an Economics
of Economics”,
Perspectives on Science
7 (4): 486-509.
Mirowski, Philip and D. Wade Hands (1998), “A
Paradox of Budgets: The Postwar Stabilization of
American
Neoclassical Demand Theory”, in Morgan and
Rutherford 1998, 260-92.
Morgan, Mary S. and Malcolm Rutherford (eds.) (1998), From Interwar Pluralism to Postwar
Neoclassicism,
Annual Supplement to Volume 30, History of Political
Economy. Durham: Duke University Press.
Salanti, Andrea, and Ernesto Screpanti
(eds.) (1997), Pluralism in Economics:
New Perspectives in
History and Methodology. Cheltenham, UK: Edward Elgar.
______________________________
Esther-Mirjam
Sent is the author of The Evolving
Rationality of Rational Expectations (Cambridge: Cambridge University
Press, 1998) and the editor (with Philip Mirowski) of
Science Bought and
Sold (Chicago: University of Chicago Press, 2002). She may be contacted at sent.2@nd.edu.
______________________________
SUGGESTED CITATION:
Esther-Mirjam Sent, “Pleas for Pluralism”, post-autistic
economics review, issue no. 18, February 4, 2003, article 1. http://www.btinternet.com/~pae_news/review/issue18.htm
Concern with Policy-Relevance in the
Latin American School of
Economics
Ana Maria Bianchi (Universidade
de Sao Paulo, Brazil)
As I understand it, one of the main goals of the post-autistic movement is to
stimulate the economics profession to transcend autism and communicate with
the rest of the world, non-economists included. One of the ways of attaining
this goal is to look back at the history of economic ideas, which is full of
interesting episodes that can help us to understand what happened in the past
and what is going on today. Historical reconstruction may attract our
attention to some currents of thoughts which developed outside the mainstream
of the profession and were never made part of the academic textbooks,
although they brought up significant new perspectives on the functioning of
the economic systems.
In this connection, it is worth
recalling the episode that concerns the building of the Latin American School
of Economics in midst 20th century. This school of thought
originated in the United Nations Economic Commission for Latin America and Caribe (ECLAC), founded in
1948. Its best known leader is the Argentinean economist Raul Prebisch. After holding important executive positions in
the Central Bank of his country, Prebisch taught
economics at the University of Buenos Aires and soon after joined the ECLAC staff, where he stayed for 15 years. His conception
of the growth processes in Latin America was developed in several essays
published by the ECLAC1 and became the basis of what is now
known as the Latin American school.
Under the leadership of Prebisch, the institution
became a think tank for a whole generation of heterodox economists and social
scientists in general, the so-called cepalinos,
whose ideas provided theoretical justification for the economic development
of Latin America countries during the second half of the twentieth century.
The main thesis advocated by the
Latin American School was that the “peripheral” countries, which
specialized in exporting raw materials and primary products in general to the
“central” industrialized countries, suffered from a long-term
decline in their terms of trade. The benefits of external trade were
unequally shared by these two groups of countries, the producers of
manufactures, on the one hand, and the producers of raw materials and primary
goods, on the other. Due to this asymmetrical relationship in their foreign
trade peripheral countries faced a vicious circle of low productivity and low
rate of savings. Regarding the central countries, market imperfections such
as rigidity of wages and monopolistic conditions were such that the gains in
productivity derived from technological improvements did not result in
decreasing prices for industrial goods exported to Latin America and
peripheral countries in general. The balance of payments deficits were
detrimental to Latin American´s economic growth, as
receipts deriving from exportations did not create the import capacity needed
to provide the region with the capital goods that it required to develop its
industrial sector.
In order to overcome this situation,
Latin American countries should protect their foreign trade and concentrate
on the production of an array of formerly imported manufactured goods. Import
substitution was a necessary condition for peripheral growth, in association
with structural reforms in the economy. The focus should be placed on the
strengthening of the domestic market, which was seen as the crucial element
of an inward-looking model of development. Exportations were still necessary
because they would guarantee the foreign exchange needed for importing
capital goods, but the hallmark of the cepalinos´s
conception was the focus on the domestic market. Within Latin America,
economic integration between countries would allow them to take advantage of
economies of scale, in the sense of providing larger markets and favouring
the dissemination of modern technologies.
These were, in a nutshell, the main
theses defended by the cepalinos, who worked
hard to gather statistical data about Latin America countries and their
patterns of foreign trade. It its
important to notice that this was not a widespread procedure in the 1940s and
1950s. On the contrary, in many economic texts, mostly those meant for a lay
audience, there was no systematic concern with the role of statistical
evidence in economic analysis. The cepalinos
prompted a break from the prevalent discursive style. Concern with the
empirical support of economic theses was present in the very spirit that
presided over the conception of the ECLAC. The entity´s staff was put in charge of assembling
statistical data about Latin America, in order to compensate for the chronic
deficiency, and they did the best they could do in this area.
Another important point about the cepalinos is the fact that they were severe
critics of the conventional theory of international trade, both in its Ricardian and neoclassical versions. In a late
interview, Prebisch (1987) stated that, although he
was raised in the neoclassical tradition, the Great Depression forced him to
review his ideas. Already in his writings as a member of the ECLAC staff, he argued that the main mistake of
neoclassical economics was to attribute a general character to something that
was geographically circumscribed. From the viewpoint of the periphery,
conventional economics suffered from a “false sense of
universality”, as its general laws did not apply to the world economy
as a whole. The international division of labor
which this theory pictured as a “natural” outcome of the world
system of trade was of much greater benefit to central than to peripheral
countries. A new investigative effort was thus necessary for a correct
interpretation of Latin American problems, one that would bear in mind the
need to tailor the neoclassical theory to the specific conditions of
peripheral economies. This did not mean, however, that the new generations of
Latin American economists had to start all over again, building a completely
different economic theory. On the contrary, they had to learn neoclassical
economics before being able to make the necessary adaptations2
Prebisch and the cepalinos
were influenced by the German Historical School, especially its forerunner
Friedrich List, from whom they borrowed the “infant industry”
argument. According to this argument, a potential manufacturer in a
developing country, faced with an initial period of high costs, should be put
under State protection. Temporary intervention would make entry into the new
industry profitable provided that, on the longer term, its production costs
would decline below the imported cost. This argument was combined with an
appeal for import-substitution industrialization as the only way out of
poverty and underdevelopment. Although not an end in itself,
industrialization was the principal mechanism at the disposal of peripheral
countries to obtain a share of the productivity gains achieved through
technological progress. In this scenario a major role was attributed to the
state, which should provide protection for the newborn domestic industries.
The cepalinos
also placed great emphasis on economic programming and planning techniques.
The development process should follow an orderly strategy, and it could not
be conceived as the spontaneous process which characterized it during the
nineteenth century.
On the
empirical counterpart of this ideological and institutional movement, the cepalinos succeeded in mobilizing the energies
necessary to give a new impulse to the state-led industrialization process.
Industrialization through import substitution had begun earlier in countries
such as Brazil, Argentina and Chile, but it gained a new momentum with the
diffusion of structuralist ideas and policies.
Burger (1999) claims that with the ECLAC industrial
policies came to represent a logical continuation of this early process,
systematized into a more coherent body of ideas.
All in all,
this industrialization model worked in Latin America, if by
“working” we mean driving the per capita output for a quite
extensive period of time. During the three decades that followed World War
II, Latin America saw a continuous growth of its industrial product, its gross
domestic product, and its per capita income.
Between 1950 and 1978, Latin America´s gross
domestic product grew at an annual rate of 5,5%, a rhythm that far exceeded
the world average. The Latin American industrial product was multiplied by
six in the same time period, growing at rates far superior to the population
growth, which grew 2,8% a year. The
continent as a whole exhibited a persistent growth of its GNP per capita of
about 2,6% a year.
Yet the
import-substitution industrialization model had shortcomings and the cepalinos quickly came to acknowledge this fact.
In a book published in 1971, called Change and Development, Prebisch pointed out to the limitations of this model as
it had actually evolved. Latin American economies, he claimed, could no
longer continue to rely on import substitution alone. Rather than
concentrating on the production of basic goods for general consumption, the
newly created industries had tended to concentrate on the production of
consumption goods that benefited a small portion of the urban consumers. The
industrialization model adopted by the Latin America countries produced
growth but failed to produce equity, as it was unable to absorb the excess labor force, marginalizing large masses of people from
its benefits.
In this
sense, the import-substitution model adopted by Latin America after World War
II was inefficient in achieving a significant reduction of poverty and income
concentration in the continent. Latin America became less poor in the second
half of the 20th century, and this is something to be praised, but
its indices of inequality, which were already comparatively high in 1950,
remained so throughout the 1950-1980 period.
The costs of this process included high inflation levels – a
further object of concern of Prebisch and the cepalinos -, which accelerated at an unprecedented
rate near the end of the century.
These costs also included a growing foreign debt and a bloated,
inefficient, and corrupt public sector.
The integration of the continent itself, a dream nurtured by ECLAC from its very beginnings, moved at the speed of a
turtle.
From the academic point of view, the
Latin American School of Economics did not acquire many followers
outside the continent. There are very few mentions of it in the international
literature of the history of economic thought, macroeconomics and growth
economics. One exception is found in Thirlwall and McCombie (1994, pp.256-7), who refer to the importance of
Prebisch in the construction of center-periphery
models of growth and development. (The authors build an equation which would
be later adopted in post-Keynesian growth models.)
Be that as it may, the most
important feature of the Latin American School is the fact that its authors were
thoroughly concerned with the practical relevance of their writings. This is
not a prerogative of this school, as we learn from Milberg (1996), who claims
that in the field of international economics researchers have been
persistently concerned about policy-relevance. Nevertheless, this is
something to be praised, in times when ultra-formalism tends to dominate a
significant part of the academic scene. Influenced as they were by the German
Historical School, the cepalinos fully
recognized the prescriptive nature of economics. Their writings show an
explicit commitment to values such as economic development, social welfare
and equity. The cepalinos wanted to learn
the relevant theory and to assemble the relevant statistics, but they also
wanted to tell something important and true about their Latin American world.
In this sense, they mobilized some broad-based economic expertise in order to
propose economic and social changes, thus bridging the gap between what they
learned in the textbooks and the world out-there.
Notes
1. Among these writings two were specially path-breaking: the essay called
“The economic development of Latin America and its principal
problems”, presented for the first time in June 1949, during the ECLAC general assembly held in Havana, Cuba; and the
introductory part of the Economic
Survey of Latin America 1949,
presented during the ECLAC general assembly held in
Montevideo, Uruguay, in May 1950.
2. This is what Hodgson (2001) would call the neglected problem of historical
specificity, which he considers to be a problem of vital significance for the
social sciences, fully recognized by all the leading members of the German
Historical School. It addresses the limits of explanatory unification in the
social sciences, in the sense that they must build theories that are
sensitive to historical and geographical variations. In the author´s own words:
“... differences between
different systems could be so important that the theories and concepts used
to analyse them must also be substantially different, even if they share some
common precepts. A fundamentally different reality may require a different
theory. This, in rough outline, is the problem of historical
specificity.” (Hodgson 2001, p. xiii)
References
Burger, Hillary. 1999. An Intellectual History of the ECLA Culture, 1948 to 1964. Boston, MA: Harvard
University Press.
Hodgson, Geoffrey, 2001. How Economics Forgot History. London and New
York: Routledge.
Milberg, William, 1996. “The Rhetoric of Policy Relevance in
International Economics”, Journal of
Economic Methodology 4 (2): 199-200.
Prebisch, Raúl, 1971. Change
and Development: Latin America´s Great Task.
New York: Praeger.
Prebisch, Raúl, 1987. “Cinco
Etapas de mi Pensamiento sobre el Desarrollo”. Comércio
Exterior 37 (5).
Prebisch, Raúl. 1948. “Desarollo
Económico de América Latina y sus Principales Problemas”. Santiago:
CEPAL, E/CN.12/0089, 87 pp. (published
in English as “The Economic Development of Latin America
and its Principal Problems.” UN E CN. 12/89 Rev.1.
Thirlwall, A. P. and McCombie, J.S.L., 1994. Economic Growth and the Balance of
Payments Constraint.
St. Martin´s Press.
United Nations, Economic Commission for Latin America, 1951. Economic Survey of Latin America 1949.
Santiago: UN.
______________________________
SUGGESTED CITATION:
Ana Maria Bianchi, “Concern with Policy-Relevance in the Latin American
School of Economics”, post-autistic economics review,
issue no. 18, February 4, 2003, article 2. http://www.btinternet.com/~pae_news/review/issue18.htm
Common Ground Critiques of Neoclassical Principle Texts
Steve Cohn (Knox College, USA)
Like many heterodox economists I am pleased and excited by the growth of the PAE network. I'd
like to share some thoughts about a project I
have been working on that overlaps many initiatives and ideas that
have been discussed in the PAE Review.
The “critical commentary”
project is based on four major assumptions.
Assumption 1: Need for Critique
In the mid 1990s
about 1.4 million students took principles classes in the United States. All 20 best selling introductory
macroeconomics textbooks in the U.S. are basically neoclassical texts.1
It is unlikely that even 1% of the students use a non-neoclassical principles text.
To make matters worse, for several
decades the neoclassicists have been increasing
their control over economic education at the pre-college level. There has been a major effort to craft and
then impose on high school (and even pre-high school) economics courses
"voluntary content standards" that reflect neoclassical ideas. This has been accompanied by the creation
of review mechanisms, such as the Test of Economic Literacy (TEL), that
assess economic knowledge in terms of students' acceptance of neoclassical
theory.
When economists objected to the
narrowness of the "voluntary" content standards, two important
members of the drafting committee were quite explicit about their attempt to
censor other viewpoints. They
indicated,
"The final
standards reflect the view of a large majority of economists today in favor of a 'neoclassical model' of economic behavior….The task was to produce a single coherent
set of standards to guide the teaching of economics in America's
schools. Including strongly held
minority views of economic processes risks undermining the entire
venture."2
Assumption 2: Generic Target
There is a template, a standard
neoclassical treatment of most topics covered in principles courses, which
can serve as the target for a heterodox or pluralist commentary. Space limitations preclude defending this
claim here, but it is hardly controversial.
Colander's observation that principles texts can not diverge more than
15% from standard fare characterizes the market's homogenization fairly
well.
Assumption 3: Common Ground Critique
While the neoclassicists have been very good at homogenizing
instruction within their ranks so as to speak with one voice when it counts,
those of us with non-neoclassical positions have been less inclined to follow
this strategy. And for good
reason. Part of our success is based
on the hard won development of specialized languages (such as Marxist theory)
that are able to resist being co-opted by neoclassical discourse. I think many advances for heterodox theory
will come by preserving these separate languages and integrating their
insights. Nevertheless, while I think
it is important for the individual paradigms to continue to flourish as
separate schools of thought, I am convinced it is possible to find broad
common ground across a wide range of critiques of neoclassical principles
texts, including work by many Marxist, radical, institutionalist,
feminist, Post Keynesian, socio-economic, humanistic, and ecological
economists. To use a biological
metaphor, the issue is whether heterodox paradigms can be thought of as
members of one species or separate species.
I believe there are enough shared ideas among paradigms to inter-breed
and support shared assaults on neoclassical texts.
Assumption 4: Appropriate Pedagogy
An effective
critique of standard texts requires a sustained voice. One of the rhetorical
strengths of principles books is the repetition of the same kind of analysis
across many different topics. Our
critiques must offer a competing "habit of mind." Besides challenging the formal arguments
of neoclassical economics, heterodox
critiques must also challenge the "stories" in neoclassical
principles texts and offer alternative stories, metaphors, and patterns of
analogies to convey heterodox ideas.3
The Significance of Common Ground
Since establishing
our common ground may be key to expanding the influence of pluralist economics,
I will concentrate on elaborating Assumption 3 in this article. Besides offering opportunities for
intellectual cross pollination, securing common ground might increase the
clout of pluralism within the economics profession. Why not, for example,
band together to demand that the College Board's Advanced Placement exam
include at least one question that requires some knowledge of alternative
economic paradigms? The growth of
ICAPE4 and recent efforts to create umbrella projects, such as the
recent and/or upcoming conferences on the history and future of heterodox
economics in the U.S. are promising steps in this direction.
A key challenge for
"heterodoxy" is to define itself in ways that move beyond the
rubric of "non-neoclassical" economics. In defining a common ground in the
"critical commentary" I have tried to do three things: (1) identify
shared ideas that generate a pattern of heterodox critique across topics
and chapters of introductory macro texts; (2) give special attention to ideas
that link methodological differences to policy differences; and (3)
characterize the common ground in ways that permit distinct paradigms to
develop common
differences with textbook economics in different ways.
Let me offer two examples of the
latter point. I think holist alternatives to methodological individualism are
one of the most fundamental differences between heterodox and neoclassical
economics.5 Holist
alternatives are expressed differently, however, in different heterodox
paradigms. For example, Marxist holism
finds expression in "dialectics;" institutionalist
holism highlights patterns of institutional reproduction; holism in radical
economics often illuminates social structures of accumulation; feminist holism can involve systems of
patriarchy; Post Keynesian holism highlights socially constructed conventions
for responding to uncertainty; and so on.
While the approaches are very different they all assert that there is
a "coherence" to economic life that reproduces itself over time at
a higher level of integration than the individual.
A second example involves
epistemological issues. In contrast to
neoclassical theory's assertion of a positivist-modernist epistemology,
heterodoxy acknowledges the paradigmatic and multi-dimensional nature of
knowledge. While different economists
have taken this challenge in different directions (including the adoption of
pluralist or Babylonian methodologies, the rejection of micro foundation
requirements, the acceptance of empathy and aggregate analysis as viable
research techniques, the adoption of critical realism, etc.), there is
a common ground that expands economics discourse from the narrow terrain of
textbook methodology.
Any attempt to create a common ground
is inevitably going to exclude some "terra firma" for many
perspectives. The commonalities and
rubrics I have chosen work well along many dimensions, but not so well along
others. With these qualifiers in mind,
I offer the concepts below as a heuristic for promoting discussion of common
ground in heterodox critiques of textbook economics. Because of space
limitations I have simply listed and not discussed most of the
categories. I will offer a few
comments on the two asterisked categories whose
meaning may not be self-evident from their title.
Heterodox paradigms share a common
rejection of the following aspects of textbook economics:
- its positivist-modernist
epistemology
*- its subtexts
*- its treatment of issues
of well-being
- its inappropriate use of
abstraction
- its universalization
of homo economicus
-its allegiance to
methodological individualism
In areas of particular relevance to
macro theory, heterodoxy also rejects:
- its assumption of perfect information
- its assumption of perfect competition
- its use of comparative static rather than
dynamic models
- its appeal to partial
equilibrium intuitions to explore system-wide issues
of macro coordination
- its abstraction from the monetary
character of the economy
- its abstraction from the labor market's "subjective" dimension
and the
institutionally
contingent determination of wage/profit shares
Heterodox critiques of neoclassical
economics (at least the way I am using the term heterodox) involve two
different kinds of inter-connected objections. Within neoclassical economics, the first
might be seen as "normative" and the second as "positive"
objections. One of the claims of
heterodoxy, however, is that the sharp distinction between positive and
normative statements claimed by neoclassical economics oversimplifies the
complex relationship between the two.
Thus I will call the two objections textual and subtextual. To some extent, the first deals with the
techniques of analysis and the second with the goals of analysis (although
the goals obviously influence and infuse the choice of techniques).
Many heterodox economists feel that neoclassical
economics often acts as an apology for capitalism and laissez-faire oriented
policy regimes. The neoclassicists ridicule the
claim, analogizing it to finding ideology in geometry. I have found the concept of subtexts very
helpful in explaining heterodox thinking.
By
subtexts, I mean (1) the tacit
and unprovable assumptions about the nature
of society and the (2) normative ideas about the goals of economic knowledge
that underlie all economic paradigms.
Most intellectual work is motivated by a belief that the ideas pursued
are worth knowing. Subtexts provide
the context for knowing, i.e., they provide a backdrop that situates the
knowledge in relationship to the projects it is intended to facilitate (i.e.,
it shows how the knowledge might be used).
Neoclassical and heterodox economics
tend to have very different subtexts and, partially as a result of this, tend
to offer radically different contexts for thinking about economics and public
policy.
Illustrative of a larger list of
textbook subtexts are the implicit assertions that:
1.
Neoclassical economics is a scientific theory and as such
demands belief in ways similar to modern physics.
2.
Market outcomes reflect free choice.
3.
People are naturally greedy, with insatiable consumer
appetites. Capitalism is successful,
in part, because it offers an incentive system that builds on this
“human nature.”
4. The
major purpose of economic theory is to promote economic efficiency and
economic growth, as both provide a basis for human happiness.
5. There
is no alternative to capitalism. The
failure of the former Soviet Union proves that socialism can’t
work. The message of the 20th
century is "let (capitalist) markets work." The onus is on the government to justify
"intervention" in the market.
In
contrast, among the key subtexts in heterodox economic writings are claims
that:
I think that issues of well-being,
implicit in many heterodox paradigms, like Marxist and Post Keynesian
economics, need to be made more explicit, as in socio-economics, ecological
economics, and feminist economics. Most neoclassical textbooks devote little
attention to analyzing the nature and causes of human well-being. They strongly imply, however, that there is
a close positive correlation between national output and national
well-being. While most texts briefly
acknowledge that several factors might complicate the link between output and
well-being, they generally ignore these complexities and imply that this is
quite appropriate.
Heterodox
economics (implicitly or explicitly) challenges the relatively mindless
correlation between economic growth and human well-being animating
neoclassical textbooks. Heterodox
economists tend to give greater attention to empirical findings about
well-being (like those of Richard Easterlin) and
theoretical concepts that explore well-being, such as ideas about positional
competition and "meta-externalities" (the effect of economic
outcomes on non-economic societal variables like the viability of
democracy). As a result heterodox
analyses challenge the mantra of "let the market work" that echoes
in principles texts
Contrasting Metaphors
I'd like to conclude with an abbreviated list of contrasting images that
respond to Assumption 4's recommendation that heterodox critiques challenge
the metaphors as well as the formal analytics
of textbook economics.
Neoclassical Texts Heterodox Alternatives
Economist as Scientist/engineer Economist as Social Theorist
Key complementary disciplines: Key
complementary disciplines:
mathematics & computer science anthropology and sociology
Homo Economicus Homo-Sociales
(Rational Isolated Economic Man) (Human Beings in Social Contexts)
the Invisible Hand the
Prisoner's Dilemma
the Auctioneer the
Casino
Perfect competition Strategic
Competition
and Passive Firms and Active
Firms
Crafting a common ground for
heterodox critiques of textbook economics is inherently a collective
project. I have had enormous help from
many people who cannot be acknowledged here.
I would welcome more feedback, as so too would the editor of this
journal.
Notes
1. One can debate the status of Colander's thoughtful, but by his own
admission, compromised text and hope that future editions of Stiglitz's book will move further in a heterodox
direction. Despite their contributions
to a more thoughtful economics, I find both books clearly on the neoclassical
side of the ledger.
2. John J. Siegfried, (Secretary-Treasurer of the American Economics
Association) and Bonnie T. Meszaros of the Center for Economics Education and Entrepreneurship: "What Should High-School Graduates
Know in Economics? National Voluntary
Content Standards for Pre-College Economics Education." American
Economic Review 87(2) May 1997, p. 249.
3. While I am not sure that deployment of active learning teaching techniques
inherently favors heterodox economics, many
feminist economists and PAE contributors, such as
Peter Dorman and Susan Feiner, have made
interesting arguments that they do.
4. ICAPE = The International Confederation of
Associations for Pluralism in Economics
5. Admittedly there are well known methodologically individualistic Marxists,
though the concept seems an oxymoron to me.
Nevertheless I think this perspective should be included in heterodox
economics because of the broad overlap with heterodoxy in other areas.
______________________________
Please e-mail (scohn@knox.edu) if you have any suggestions
for the commentary or wish to see sample chapters.
______________________________
SUGGESTED CITATION:
Steve Cohn, “Common Ground Critiques of Neoclassical Principles
Texts”, post-autistic economics review, issue no. 18,
February 4, 2003, article 3. http://www.btinternet.com/~pae_news/review/issue18.htm
How Reality Ate Itself: Orthodoxy, Economy
& Trust
Jamie Morgan (The Open University, UK)
Quis custodiet ipsos custodies?
Who guards the
guards?
An economic theory
that cannot sustain its own possibility is a poor one but can also be a
powerful one. A market economy may valorise the symbolism of the invisible
hand but it is as equally beholden to the symbolism of the tacit handshake.
The handshake is a metonym for a relation and a market economy is a set of
relations inscribed in rules, tacit or otherwise. First amongst equals are trust
and the means by which trust is enacted and maintained. Without trust nothing
else functions and social reality would be impossible. The philosopher J. L.
Austin was one of the first to recognise the importance of this.1
There are at least two dynamics to talking about social reality. First,
description where we designate things true or false by reference to them as
objects or past events - the hat is black, yesterday was Wednesday and we had
lunch. Second, performance, where current conduct and dialogue constitute a
new conceptual element to social reality with material repercussions for
future relations – the meeting of hands and it’s a deal,
or the negotiation and witnessed signing of a contract. In the immediate
sense, performance is neither strictly true nor false since it is not
initially a description, but a doing or making. The doing is in this first
instance appropriate or inappropriate, sincere or insincere, successful or a
failure. That it is done is in the second instance true or false – the
contract as negotiated by two parties with the legal authority to engage in
those negotiations was signed by each and entered into in good faith. The
glue in this transition is the trust that binds the particular rules of
appropriate interaction. The interaction may fail for a variety of reasons
that cause immediate problems – an earthquake may prevent the delivery
of a consignment required for a just in time production process. But these
reasons are not devastating to the social institution in which they occur
– the sustainability of business agreements perpetuating economic
activity. However, when practices are designed to confound basic principles
of transparent dealing, when rules are insincerely held, when a promise
ceases to be something you intend to keep, trust dissolves and markets cease
to look quite so ‘spontaneously’ vibrant.
The orthodox
Cheshire cat
As has often been
argued, the timeless, ahistorical, institution-free
fundamentals of orthodox method cannot be easily reconciled to problems of
markets as rule systems. But what
does it mean that trust and the rules that constitute market systems are not
a central problem for orthodox economics? Orthodoxy is about the spontaneous
optimality that emerges from the removal of impediments. Since the very idea
of rules tends to be conflated with regulation there’s nowhere left to
hang the structuring of markets. This of course forgets that deregulation is
itself a (demonstrably inefficient) form of regulating rule. Its inefficiency
and its contradiction is that this form of regulation tends to create the
conditions for abuse that undermine the trust on which the free economic
activity of markets is based. The radical individualism inscribed in it
provides for the belief that freedom to massively predominates over freedom
from. Freedom from, our collective protection from the abuses that
undermine the very possibility of individual action, is pushed aside. This
deep ideological commitment can be heard in the words of Milton Friedman:
What’s
interfering with the recovery is all this fuss about corporate governance,
which, in my opinion, is being carried too far. In all these cases –
Enron. Global Crossing, WorldCom – it was the collapse in the market
that brought attention to them. What’s happening now is that the
hullabaloo, which in effect is saying that to be a CEO
is to be a member of a criminal class, is very adverse for enterprise and
risk.2
But the collapse of
the market is not some natural event, it is the dynamic consequence of
complex interactions, many of them unanticipated or unintended. One aspect of
that is how the practices that constitute markets can undermine the trust
that markets require to function. Criminalizing CEOs
is adverse for enterprise and risk but would not be occurring if their
practices did not contribute to crises where they can no longer be disguised
or ignored. Economists tend to forget about power, but all human systems have
power asymmetries. For the powerful to be held to account indicates deep
concerns. That orthodoxy cannot recognise this, still less contribute to its
analysis in terms of its own theoretical tenets, indicates that it has little
that is constructive to say concerning the analysis of an important cause of
economic crisis.
In any case, one rarely sees far when the view is from the top, however clear
the view may potentially be. In a recent speech Federal Reserve Chairman Alan
Greenspan argued that both the $8 trillion dollar loss of share vale on the
DOW at the start of the new century and the problems incurred as a result of
Enron etc. indicated the general health of the financial system.3
The basis of his argument was that technology had produced new opportunities
for financial ‘risk dispersion’ and that ‘a more flexible
world economy’ was spreading costs and absorbing shocks more readily.
The proof? ‘No major US financial institution was driven to
default.’ In adopting this position, Greenspan reveals himself as
something of a stoic - whatever doesn’t kill us makes us stronger.
Still, the US financial institutions are scarcely the whole body of economy.
Default has quite a different meaning for those impoverished by collapsing
share values and ‘financial irregularities’. Risk dispersion is a
rather hollow term for those unable to pay their mortgages or with no jobs to
go to (US unemployment is 6% and rising). If we call the financial head
healthy we must still ask ourselves how it is treating its economic body
– as a temple or a trashcan? And need we call it healthy? 2001 was a
record breaking year for fraud class actions (488) in the US against firms.4
The majority by state pension funds and union pension schemes. Around 8 to
10,000 individual cases are being filed a year at the National Association of
Securities Dealers (NASD). And all of this despite
a change in the law to make it more difficult to sue firms for
compensation for irregularity - the 1995 Private Securities Litigation Act
means that ‘aiders and abetters’ of
wrongdoing in a fraud case cannot be held liable.
Practices that undermine trust
The context of the
problem of trust is a finance system keyed to the unrelenting pursuit of the
next profitable firm and the next growth sector. Consistent growth provides
the basis of a profitable firm and a profitable bull market for the financial
industry. When a firm meets its
revenue forecasts it can mean a large increase in its share valuation.
Analysts categorise firms as ‘Market Out-performers’ (MOs),
‘Market Performers’ (MPs) and ‘Market
Under-performers’ (MUs). Whether a stock is
rated as a ‘buy’ a ‘neutral’ or a ‘sell’
is, in principle, related to which direction it is tending to in terms of
these categories. Conventionally, our
perception of shares is based on their price-earnings ratio or P/E.5
The lower the ratio the greater the earnings of the stock as a proportion of
its price and thus the faster one recoups the initial investment. P/E
therefore provides a measure of the attractiveness of stock as equity. But
how reliable are the price of the share and the earnings of the firms as
indicators of the decision to invest? What lurks beneath the numbers? Here,
knowledge is power:
·
The power to construct the
firm’s reported revenue stream occurs within strong pressures to place
it in its best possible light. In terms of trust, one confronts the question
of how far the relationship between the accountants and the firm can stretch.
When does creative accounting become aggressive accounting that in turn
becomes collusion in fraud?
·
The power to manipulate stock
prices through complex financial arrangements on the basis of information
that others do not have. Here, the problem of trust comes up against the
question of at what point expertise becomes self-interest to the detriment of
the system from which it feeds?
This is not just an
issue of legality since trust is more than a question of ‘were any laws
broken?’ Part of the constitution of trust are the ethics that inform
how law is made and how it is adhered to – in its spirit or in its
letter? The grounds of trust are extremely difficult to define, but easily
lost. Losing sight of the importance of trust is the downfall of the system.
Its dysfunction becomes ravenous and reality begins to eats itself. Its
clearest expression is a debilitating scepticism. Its immediate, though by no
means final, consequence is a downward spiral of corporate
valuation.
Cannibalising reality?
The past five or six years have seen
numerous financial scandals. Since economy is an open system one tends to
find a complex interaction of some or all of the above practices within those
scandals. The dot.com bubble provided a great deal of scope for spinning (the
preferential allocation of stock to favoured clients) and laddering (having
investors promise to buy more stock at progressively higher prices once
trading begins). Though cases of spinning are alleged on the London markets,
New York has been the focus of investigation.6 New York
Attorney-general Eliot Spitzer has been engaged in protracted investigation
of 12 of the major financial institutions for forms of spinning. Most of the
evidence is based on private e-mails and documents that contradict the public
statements of investment analysts. Henry Blodget, a
Merrill Lynch analyst, for example, publicly rated Infospace
stock as a buy whilst privately noting, ‘This stock is a powder
keg… given the bad smell comments that so many institutions are
bringing up.’7 Breach of Chinese walls is also alleged
against Citigroup’s investment banking arm Salomon Smith Barney, which
consistently rated Qwest Communications as a ‘buy’ up to the
point of its price collapse. At the same time, Philip Anschutz,
Qwest’s founder, was selling Qwest shares amassing a $1.45 billion
profit. Anschutz also received 57 allocations for
various share issues at a personal profit of around $5 million from Salomon
whilst Qwest had generated $37 million in revenue for Salomon from its
transactions.8 Fines imposed by the Securities and Exchange
Commission (SEC) on the banks currently stands at $1.4 billion. $900 million
of which constitutes compensation for investors, $450 million to fund
independent research (to maintain Chinese walls) and $85 million for
‘investor education’.9 $400 million of the total will
come from Citigroup (who have also set aside $1.5 billion to meet the costs
of compensation for further investor litigation).10
The dot.com firms themselves and also the new telecoms were highly
prone to creative accounting based on capacity swaps and barter in order to
massage their revenue figures during the early phase of set-up. This and talk
of new business models making money in completely new ways with extremely low
long-run fixed costs sucked in masses of venture capital (over $40 billion of
which is now lost).11 At the same time, as a high growth sector, dot.coms provided (along with various high growth sectors
of overseas markets) one of the initial areas of high-risk that proved
extremely attractive to split capital trust (SCT)
managers. The fact that some of these issues were spun, of course, meant that
the estimation of risk by those managers was baseless and their vulnerability
far greater than even they could imagine. Any other shock to the system, such
as 9/11, could only exacerbate their vulnerability. The collapse of Aberdeen
Asset Management’s SCTs, contributed to the
£10 billion lost by more than 50,000 private investors in this sector.12
The
possibility that even apparently low risk investments are not what they seem
also emerged. The misuse of “special purpose vehicles” and
“off-balance sheet obligations” (OSOs)
prevents investors relying on firm’s accounts with any degree of
confidence. WorldCom used OSO’s to keep $4
billion off balance. In 2000 Enron was 7th in the Fortune
top 500 with reported revenue in excess of $100 billion (a 150% increase on
the previous year).13 Its shares traded at over $60. Its chief
financial officer, Andrew Fastow orchestrated
several SPVs set up in the name of his children and
his wife, from which he allegedly earned $30 million in fees and siphoned
assets. The decline of the DOW over the turn of the millennium made the use
of Enron stock to finance continued debt restructuring more difficult and on
October 16th 2001 Enron posted a bombshell $1.01 billion loss. The
vulnerability inherent in its revenue enhancements then kicked in in earnest. On the 17th the Wall Street
Journal publicised Fastow’s SPV connections. On the 29th Moody’s
Investor Service, down-rated Enron’s credit rating increasing the
servicing costs of its newly revealed debt. By December 2001 the firm had
filed for bankruptcy and it was all over. Its share price had collapsed to
less than a cent. Numerous small investors who had relied on its stock for
their pensions and large pension funds themselves were hit hard. State
pension funds in New York, Georgia and Ohio lost over $350 million. By
February 2002 the Bank of America had $231m in Enron related losses. One
hundred Merrill Lynch executives lost $16 million of their own money invested
in an Enron partnership.14 Ordinary Enron employees received no
severance pay. In November, however, senior staff had awarded themselves $55
million in ‘retention bonuses’ from the dregs of its coffers.
Just prior to the October 16th loss statement 29 senior executives
sold stock, over a dozen reaping in excess of $10 million. A class action
suit has now been brought against them for insider trading whilst Fastow, and a number of collaborating London bankers,
have been indicted for fraud.15 Meanwhile, Enron’s
accountant, Arthur Andersen was indicted for obstruction of justice. Its
other clients bailed out to the remaining Big Four accountancy firms and
Arthur Andersen, previously the fifth largest professional services firm in
the world was liquidated. The nature of Andersen’s relation to Enron is
suggested by the following statement from an anonymous former executive of
the firm:
Everyone makes the
mistake of thinking Andersen and Enron are separate companies. There are
hundreds of ex-Andersen people inside Enron, a bunch of young kids just out
of college. Give those new Andersen kids a downtown loft, a new Lexus and
show each one the golden path to becoming a partner. Hey learn to do things
the Enron way.16
The initial
fallout from Enron was the re-auditing of accounts previously held by
Andersen. Deloitte & Touche, for example, took
over the audit of MyTravel from Arthur Andersen,
its re-audit took £15m off the profitability of the firm. Share prices
subsequently fell by 36%.17 With revelations concerning SPVs major news, corporations moved quickly to distance
themselves from any hint of scandal. Blue-chip firms, such as Xerox, have
been publicly realigning their former accounts and future forecasts. But
according to the IMF, ‘questions regarding
the quality of reported corporate profits in the aftermath of Enron’s
failure continue to have an adverse impact on international and corporate
bond markets.’ As Mathew Wickens of ABN Amro says, part of the
problem are the figures firms are posting because ‘we don’t
really know what they mean.’18 Presswatch
ranks accountancy as the top service sector for column inches of negative
publicity. People are sceptical about stock markets. In a survey by the
investor group Pro-Share more than half the 450 investors questioned felt
less confident in the accuracy of company accounts. ‘One in three
believes auditors are not independent of the companies they audit.’19
The collapse of trust, therefore, places Friedman and Greenspan’s
rather blithe accounts of the $8 trillion fall in the DOW in a rather
different light.
The effects
of the collapse have been widespread. California, the richest state in the
union with an economy of $1.3 trillion faces a $21 billion budget shortfall
in 2002.20 Some of this is due to general recession to which the
collapse of the stock market has contributed. Some if it is directly
attributable to that collapse. In 2000, California received $17 billion in
taxes on stock market profits, mainly from dot.coms,
in 2002 that fell to $5 billion. Cuts in state spending of $10 billion have
subsequently been announced including state worker redundancies, pay freezes
and also reduced healthcare expenditure for the poorest in society.
Californians were also direct victims of Enron. It has been alleged that
Enron traders triggered widespread blackouts by buying huge blocks of power
capacity in the state’s electricity market to artificially increase the
price of their own supply.21
What secrecy
reveals
Sophisticated
capitalism allows for a variety of primitive abuses. This is not simply an
issue of lies and deceit. To argue this way is to reduce the problem to the
agent, to the bad apple, rather than the conditions of enablement within the
orchard. Analytically, this does not move one far enough away from orthodoxy
and radical individualism. Deceit is the tip of the structural iceberg. The
full nature of the rules of the structure and the way in which they are held
needs to be considered. The US Sarbanes-Oxley Act, which now requires finance
directors and CEOs of listed companies to attest to
the accuracy of their accounts or risk jail, is a step forward in giving
teeth to corporate governance, but it is not in itself corporate governance.
Nor does it restore trust, since once rules are codified firms will seek to
exploit them. What is also needed are ethics of appropriate action that
mitigate the desire for such exploitation. How one might maintain them under
the pressures of competitive capitalism is an open question, but it is not
one that should be conflated with lying per se. There can be an
ethical good in being economical with the truth. In macro policy it makes no
sense to confirm a run on a currency or confirm some policy that relies on
surprise for its effectiveness but has been leaked (such as currency
devaluation). Equally, rules cannot be overly general across economy –
there are good reasons why the police don’t work on commission. What is
certain is that orthodoxy adds nothing constructive to the debate on markets
as rule systems. It does not lie, but it is false. A lie in social science,
like honesty in politics, is usually found out and punished. But false
knowledge has a life of its own. Ironically, one wonders, therefore, if
Keynes is entirely correct in his sentiment when he argues, ‘you
can’t convict your opponent, you can only convince him.’
Notes
· Thanks to Vicky Chick for reminding
me of the quote from Keynes used in the conclusion.
1. pp. 45-52, J. L. Austin, How To
Do Things With Words (Oxford: Oxford University Press, 1962)
2. D. Smith, ‘Feisty at 90 – Friedman Speaks Out,’ The
Times Business September 8th 2002.
3. Text reproduced in full The Times Business, September 27th
2002.
4. J. Doran, ‘After the bust, a boom in fraud suits for Wall
Street’s lawyers,’ The Times Business, November 30th
2002.
5. PE = p-g/ (I+ e-g)
p
R. Marris, ‘Have the markets reached
bottom?’ The Times Business November 7th 2002. R.
Cole, ‘P/e ratios indicate good
value,’ The Times Business July 20th 2002.
6. In the UK see, Insight team, ‘Revealed: the cosy deals that taint
Goldman Sachs,’ The Sunday Times Business November 24th
2002.
7. See A. Rayner, ‘Spitzer poised to reveal
fresh evidence against 12 banks,’ The Times Business November 2nd
2002.
8. R. Lambert, ‘Are Wall Street’s Ethics Dead?’ The
Times October 8th 2002.
9. D. Rushe, ‘War is over (on Wall Street at
least),’ The Sunday Times Business December 22nd
2002.
10. J. Doran, ‘Citigroup plans $1.5bn fund for compensation,’ The
Times Business December 24th 2002. A. Rayner,
‘US banks to settle with regulators,’ The Times December 9th
2002.
11. N. Hopkins & T. Bawden, ‘Spectre of
high-tech bubblelingers on,’ The Times
Business November 8th 2002.
12. P. Durman & L. Armistead, ‘Dotty, the
champion of split caps,’ The Sunday Times Business October 27th
2002.
13. See B. Cruver, Anatomy of Greed (London:
Hutchinson, 2002).
14. D. Rushe, ‘Enron Watch,’ The
Sunday Times February 3rd 2002.
15. 78 charges have been filed so far. ‘Former Enron chief to face more
charges,’ The Times Business December 27th 2002.
16. B. Cruver, ‘I had a lucrative
career… but it cost me my soul,’ The Times Business
October 2nd 2002.
17. J. Ashworth, ‘Unearthing the Arthur Andersen time bombs,’ The
Times Business Thursday October 10th 2002.
18. L. Paterson & G Duncan, ‘IMF fears
more shares misery,’ The Times Business June 13th
2002.
19. D. Wild, ‘A horrible year, but at least now accountancy is
sexy,’ The Times Business December 19th 2002.
20. C. Ayres, ‘Economic woes take lustre off Golden State,’ The
Times December 11th 2002.
21. J. O’Donnell, ‘Enron’s ‘tricks plunged California
into darkness’’, The Sunday Times Business October 6th
2002.
______________________________
SUGGESTED CITATION:
Jamie Morgan, “How Reality Ate Itself: Orthodoxy, Economy &
Trust”, post-autistic economics review, issue no. 18,
February 4, 2003, article 4. http://www.btinternet.com/~pae_news/review/issue18.htm
Austrian Economics and
the Post-Autistic Economics Challenge
Peter Wynarczyk (Northumbria University, UK)
1 Introduction
The post-autistic challenge to
orthodox economics echoes criticisms that have been made by non-mainstream
economists ever since entrenched conventional wisdoms were established within
the discipline. They represent variations
on standard heterodox themes, albeit largely originating from refreshingly
grass-root student sources. The
following short article is sympathetic towards a large part of the
post-autistic agenda but remains wary of several issues located at the core
of that agenda. In addition, it suggests
that the Austrian research tradition has made a sustained and constructive
case (over a prolonged period of time) against
the prevailing mainstream orthodoxies, increased and widened knowledge of
which would serve to enhance and enrich the post-autistic challenge
itself. Increased dialogue between
these two parties, as well as with all
other heterodox elements along with orthodoxy,
can only serve to improve matters and actualise the promise of the
intellectual gains from trading ideas embedded within the commitment to
pluralism within the discipline as a
whole.
2
The Post-Autistic Agenda
The post-autistic challenge has crystallised around several key problematic
elements associated with economics as a discipline, the hegemony of
neoclassical ideas, and the teaching content and delivery of the subject
within university academic circles.
Taking my cue from the grass-root concerns of students (and some of
their teachers) in France, Cambridge UK, and Kansas City, and relayed by this
review and its earlier incarnation, it can be argued that the post-autistic
agenda highlights contra orthodoxy:
1 the need for the recognised
inclusion of a plurality of approaches and methods within economics,
respecting the history of ideas, fostering debate and critical thinking,
alongside inter and intra disciplinary dialogue, diversity and openness;
2 the need for the triumph of real
over imaginary constructs;
3 the removal of formalism for
formalism’s sake, especially with regard to the preoccupation and
over-application of mathematics (usually as an end in itself) and the heavy
dosage of theory largely unattached to any empirical base;
4 the adoption of richer models of
human agency and institutional change which seriously consider such factors
as culture and history as significant active ingredients in any explanatory
framework;
I view these four points as the core
of the post-autistic agenda and the basis of its critique of a detached,
monopolistic and hegemonic neoclassical orthodoxy. Indeed, dissatisfaction is largely captured
by points 1 and 2; with points 3 and 4 as a further teasing out of the
consequences of point 2 and the application of point 1. In what briefly follows I will suggest that
Austrian economics anticipates and already addresses most of these concerns. Over its not inconsiderable life cycle it
has persistently challenged the restrictive and overly limited ‘what
is’ approach of mainstream thinking and offered a constructive glimpse
of the possible, of ‘what can be’. To its credit, and unlike a number of its
heterodox rivals, it has been more focused on highlighting and demonstrating
the inadequacies and shortcomings in neoclassicalism
and endeavouring to overcome them
than in dwelling on the alleged irrelevancies without attempting to
sufficiently advance beyond them.
3
Austrian Anticipations of the Challenge and Their Answers
Almost all of the post-autistic
critique of orthodoxy outlined above was raised
and is largely being answered by the Austrian research tradition. This may be surprising to those who have
tried to reduce Austrian economics to a subset of neoclassicalism. I am not suggesting that Austrian economics
was alone in anticipating the post-autistic critique, a pitch can, and has,
already been made by others for institutionalism, but rather that it would be
a mistake to believe that the target of orthodoxy includes Austrian economics itself – it cannot.
Modern Austrian economics
increasingly presents itself much more as an alternative to orthodoxy rather than a supplement. Given Austrian
arguments against simplistic aggregation it should come as no surprise to
find that the research tradition has always contained (and been willing to
sustain) a diversity of views.
Currently there are two opposing but dominant wings within Austrianism represented by Lachmann
and Kirzner; with the former advancing a more
radical form of dynamic subjectivism to replace
mainstream ‘equilibrium always’ theorising, and the latter an
entrepreneurial and process orientated but ‘equilibrium tending’
approach as a bolt-on to
orthodoxy. In recent years there has
been noticeable increased intellectual convergence and reconciliation between
these two positions, entertaining the possibility of both dis-equilibrating
and equilibrating activity allowing for both change and order. Since the 1970s the Austrians have been
largely engaged in rediscovering their Mengerian
insights which, when allied to distinctive Misesian
and Hayekian contributions, raises serious questions, at the ontological and
conceptual level, against standard economics.
It also suggests that the Austrian research tradition today, taken as
a whole, is as far removed from mainstream economics as it has ever been in
its history. Its commitment to the
construction of ‘better theory’ addressing issues largely
neglected but epistemically threatening to
orthodoxy means that incorporation into the modern neoclassical fold is
neither wanted nor warranted.
Given this background, it is now time
to consider how Austrian economics anticipated, largely answered, and remains
less vulnerable to attack from the core points of the post-autistic agenda
outlined above. Each point will be
examined in turn in order to explore the merits, similarities and possible
differences between Austrian economics and the post-autistic challenge.
3.1 Pluralism and Dialogue
The Austrian research tradition has
demonstrated throughout its history a willingness to entertain diversity and
embrace debate. It has engaged with
the mainstream and the heterodox in equal measure and on an equal
footing. Austrianism has challenged neo-Walrasian
economics (captured in the planning debate concerned with the possibility of
economic calculation under socialism) and Marshallian
economics (most notably the debate over the nature of economic crisis). In addition, it had an infamous ‘methodenstreit’ with German historicism, made
repeated attempts to ‘close’ Marxism, and endeavoured to
undermine Keynesianism. It continues
to engage with the largely Chicago-based mainstream and with the heterodox
elements of Post-Keynesian and Institutional economics. I believe that this is all to Austrian
economics credit and reflects its commitment to pluralism and its belief in
the competition of ideas.
Austrians appear to have taken John
Stuart Mill’s strictures On
Liberty seriously. His text
advances the pluralist case by advocating the maintenance of rivalry between
different perspectives on the grounds that this leads to pronounced
benefits. Mill believed that dialogue
between alternative frameworks was both a defence against stifling dogma and
a positive sum gain to all parties concerned.
He argued that the existence of rival traditions provided a necessary
safeguard against intellectual slavery and complacency by keeping us on our
toes and alert to improvement. This would be further enhanced if we welcomed
criticism from without and endeavoured to understand our opponents from
within. This potent argument for pluralism is further buttressed by Austrian
insights on the dangers of monopoly provision and state socialism where the
absence of genuine rivalrous competition will
prevent innovation of products and ideas that may prove to be of far greater
benefit than those currently employed (hence preventing the market to act as
a discovery procedure). Deeply
entrenched vested interests will endeavour to stifle any enterprise and
developments, no matter how meritorious, which threaten and undermine its
own. It is useful to remain mindful
here of Schumpeter’s insight on ‘creative destruction’ and
the need for the new to promote progress.
Another notable feature of Austrian
economics has been its continued interest in the history of the discipline in
general and its own history in particular.
Hayek, Robbins, and Schumpeter especially stand out here with regard
to their seminal contributions to economic historiography. Given orthodoxy’s increasing neglect
of the past (since anything of value is assumed to be adequately contained in
the present stock of neoclassical knowledge) these and other accounts of pioneering
efforts go largely unread. Mainstream
texts are now usually presented as sterile, complete, polished, and
fully-formed accounts of orthodox thinking at its current destination without
adequate discussion of the interesting way it got there. In contrast, Austrian economics continues
to have a fascination and respect for its own history (and that of the wider
discipline). Austrian economists
remain firmly wedded to the central texts which have driven their research
tradition from Menger onwards as sources of
inspiration and direction. By
accepting the need to ‘rediscover’ Menger
or ‘reinterpret’ the economic calculation debate, they are
rejecting the orthodox stance already alluded to that the present by necessity contains all of the
useful past. A key exponent of the
Austrian treatment of historiography who epitomises this position most
forcibly is Lachmann. He adopts a critical but humane stance in
his treatment of intellectual forebears by accepting that the ideas they
advanced were neither the final word on the matter (without limitations or
open to challenge from alternative explanations) nor inherently exhaustive or
fully-developed (in the sense of being articulated to complete closure). Lachmann is
asking us to be alert to the possibilities of re-examining the ideas of the
past in the hope that they might further illuminate the present or a problem
of which their originator may have been unaware. He has drawn attention to the problem of
the ‘storage of ideas’ – the carrying over of intellectual
capital that has not been fully
utilised from one generation to the next - and the need to
‘salvage’ such ideas when lost.
In his own work he has endeavoured to re-examine the legacy of Max
Weber, to reconcile aspects of Keynes and the Austrians, and to explore the
striking similarities between the outlooks of Mises
and Shackle.
3.2 Real Over Imaginary Constructs
Orthodox economics continues to
allocate too many intellectual resources to fictions and imaginary constructs
detached from reality. Its comparative
success within the limited and
restrictive domain it has set
itself cannot be denied but it has been slow to move persuasively beyond
this insulated fabled terrain and engage meaningfully with real world
matters. Whilst some underlying assumptions
may be relaxed and more realistic applications pursued, especially at the
margins, its core remains largely immunised from any degree of external
epistemic threat.
The Austrian research tradition has
been engaged in a persistent and sustained assault on the methodological,
ontological, conceptual, and theoretical limitations and shortcomings of
mainstream economics ever since its inception. Much of their critique has been directed at
the lack of realistic assumptions, over-simplistic argument, and models that
continue to capture at best surface
phenomena rather than essential characteristics. Several examples drawn from the Austrian
research tradition serve to attest to these claims:Menger’s
rich presentation of inherently flawed human agency remains at odds with the
clinical rational choice maximisation model; Mises’
recognition that orthodoxy dwells
on fictions such as the imaginary constructions of equilibrium and neutral
money rather than market process and money having real effects; Hayek’s
demonstration of mainstream economics concentration on the static ‘pure
logic of choice’ framework and its fatal neglect of knowledge and
informational deficiencies; and finally, Lachmann’s
vibrant and intricate picture of capital and its structure illuminates an
area of economics that continues to be largely shrouded in darkness. Perhaps the best example of the Austrian
case against orthodoxy is captured in their ‘fundamentalist
revolution’ – the so-called economic calculation debate. As modern Austrians have shown in their
reappraisal of the significance of that debate, economic calculation
demonstrated more than the impossibility of socialism, it showed the wide
gulf between the rediscovery of the Mengerian
vision by Mises and Hayek and the neoclassical Walrasian vision employed by the competitive
socialists. It helped to pronounce the
huge and increasingly unbridgeable distance separating Austrian and
mainstream economics to this day. It
also demonstrated the importance of the need to re-examine and salvage ideas
insufficiently regarded in the past.
3.3 Substance Over Form
Mark Blaug,
one of a growing band of economists who has drawn attention to the widespread
misuse of formalism in modern economics, sees it as ‘an ugly
current’, ‘a disease’ and a ‘bad game’ that
economists increasingly play. Given
what was said in the previous sub section it should come as no surprise to
find that Austrians too deplore orthodoxy’s predilection for form over
substance and the use of formalism for formalism’s sake. They, unlike much of the mainstream, have
always been willing to trade form for substance and this has been a major
driver of their research tradition.
Attention has already been drawn to the Austrian rejection of micro-formalism,
and the same is true of their rejection of macro-formalism with its heady mix
of aggregation and prediction. They
have a record of rejecting both the over-application of mathematics (usually
as an end in itself) and the use of pseudo-scientific econometric methods
lacking adequate correspondence with the social realm. Austrians largely eschew mathematics
because it lends itself to the neglect of qualitative change and genuine
novelty whilst econometric techniques endeavour to reduce the social world to
the physical. It has to be conceded
here that whilst the Austrians do want their theory to be grounded in reality
they have, to date, set less store in identifying the appropriate empirical
base for their analysis. They will
certainly need to explore such matters, especially with regard to their
identification of the relative strength of the forces of equilibrium and disequibrium appertaining in the economy at any
particular time.
3.4 Human Agency and Institutional
Change
Orthodox economics is beset with
behavioural and institutional deficiencies largely caused by its failure to
embrace the temporal and non-price dimensions of human activity. Culture and history tend to be underscored
because economic action (often generalised into capturing all action) usually
takes place outside of interpersonal space or historical time. Individuals tend to come fully-formed and
sufficiently informed to ply their maximisation techniques, removed from any
societal or historical context. This
picture of human agency has long been a target of attack and ridicule from
heterodox economics including Austrian
economics. Indeed I would suggest that
the Austrian alternative remains
far richer and more developed than any so far advanced outside of the
mainstream.
Austrian economics advances a
middle-ground position with regard to human agency: rejecting both the idea of the individual as a
completely independent entity or as
an agent who has no meaningful or purposeful choices to make. This is all captured in Mises’
notion of human action; with the
human emphasising the social element and the action emphasising that such
activity can make a difference. Austrians, following Mises,
recognise that agents are social beings, the products of given situational
contexts, and prime movers of change.
They also acknowledge that preferences are neither fully-formed nor
stable but have to be discovered and are largely endogenously
determined. In addition, Austrians
accept that human agency takes place within historical time and an
institutional setting. Human decisions
are fallible, based upon inherent and irremovable ignorance, borne out of the
existence of pervasive and genuine uncertainty and concomitant computational
problems. Within such a framework,
institutions serve both to constrain and enable purposeful behaviour by
providing a set of rules, conventions, or inertias. The Austrians, ever since Menger, have been interested in the role of firstly,
spontaneous, then secondly, designed institutions or orders. They have displayed a preference for the
former (especially the market) over the latter (especially the state) in the
non-ergodic transmutable reality which we live,
serving as uncertainty-reducing (but not eliminating) ‘points of
orientation’. Of course, more
work needs to be done by the Austrians with regard to institutions but
efforts by the likes of Hayek, Lachmann, and more
recently O’Driscoll and Rizzo, suggest
possibilities for further progress, especially embedded within an
evolutionary, path-dependent, framework buttressed by human action under
uncertainty.
4
Final Thoughts
It has been argued above that
Austrian economics offers an interesting window from which to view the
post-autistic challenge to orthodoxy.
The Austrian research tradition offers both a robust critique of mainstream economics and an alternative
borne out of pluralism and dialogue with all
its rivals and a commitment to real rather than imaginary constructs. It rejects formalism and advocates a richer
model of human agency than any of its competitors.
______________________________
SUGGESTED CITATION:
Peter Wynarczyk, “Austrian Economics and the Post-Autistic Economics
Challenge”, post-autistic economics review, issue no. 18,
February 4, 2003, article 5. http://www.btinternet.com/~pae_news/review/issue18.htm
A Reply to Perino on
the Absurdity of “Efficiency”
Richard Wolff (University of Massachusetts,
Amherst, USA)
I am pleased that Grischa
Perino found so much that was agreeable in my critique
of efficiency.1 On the other hand, I believe Perino
missed one of its central points. Just as beauty lies in the eyes of the
beholder, so efficiency lies in the minds of economists and others who use
that concept. Proponents of different economic decisions, policies, and class
structures typically deploy their different efficiency calculations in
theoretical and practical battles. Moreover, they do so on an absolutist
terrain. That is, each contesting efficiency calculus promotes itself as the
efficiency calculus whose results must trump all others. The form of this
debating ploy is often to denounce the opposing position and its efficiency
calculus as based on “arbitrariness” while one’s own rests
on the foundational certainty of rigorously measured costs and benefits. Perino is concerned about this charge of arbitrariness,
yet it is subject to a critique identical to the one he found persuasive
regarding efficiency. Arbitrariness, like beauty and efficiency, lies in the
eye of the beholder.
Every efficiency concept depends, my article argued, on a very particular
presumption about causes and effects (that one can reduce a list of costs and
benefits to a singular causative economic act, policy, or conditions whose
efficiency is to be measured). Likewise, each efficiency concept can only
select and measure a small subset of the infinite present and future costs
and benefits ramifying from any economic act, policy, or condition.
Efficiency measures are thus inescapably as variable, idiosyncratic, and incommensurable
as the different presumptions and selections underlying them (to which they
are relative). Yet they persist as ideological bludgeons used by
adversaries attempting to suppress their opponents by claims that one
economic process is more or most efficient absolutely. Thus, to
mention a few examples, socialist economies are less efficient than
capitalist economies, deregulated markets are more efficient than regulated
ones, minimum wage laws diminish efficiency, and so on.
Across the ages, individuals and groups made economic decisions and evaluated
economic policies and systems by considering – in particular ways -
some selected aspects of them. These considerations differed across groups,
time, and place. Nothing was “arbitrary” in the decisions and
evaluations nor in the considerations leading to them. Their social contexts overdetermined which issues arose for decisions and how
different social groups responded (i.e., which particular aspects they
selected to consider and in which particular ways).
Economists debating the great issues of our time often use absolutist
efficiency arguments against one another, charging each other with the
“arbitrariness” that concerns Perino.
My critique of efficiency attacks the terrain of such debates. It also
advocates an alternative terrain where the debate would center
on the specific values that contest to shape history. On that terrain,
efficiency claims, like arbitrariness claims, would be recognized for what
they are: very questionable derivatives of contesting values. Rather than being disguised and manipulated
as issues of efficiency and arbitrariness, the struggles among alternative
values (political, economic, and cultural) would emerge as such. Behind the mask
of “experts” who do “efficiency measurements” to
“reach optimum decisions,” both democratic participation in
decision making and critical alternatives to the status quo are usually
repressed. The critique of efficiency (like that of the accusation of
arbitrariness) is aimed at undoing such repressions in the service of basic
social change.
Note
1 See Grischa
Perino, “Need Efficiency - and Much More! A
Response to Richard Wolff”, post-autistic economics review,
issue no. 17, December 4, 2002, article 7.
http://www.btinternet.com/~pae
news/review/issue17.htm and Richard Wolff, “Efficiency: Whose
Efficiency,” post-autistic economics review, issue no. 16,
September 16, 2002, article 3. http://btinternet.com/~pae
news/review/issue16htm.
______________________________
SUGGESTED CITATION:
Richard Wolff, “A Reply to Perino on the Absurdity of
‘Efficiency’”, post-autistic economics review,
issue no. 18, February 4, 2003, article 6. http://www.btinternet.com/~pae_news/review/issue18.htm
PAE economists
in the news
The
Guardian (UK):
"There is no invisible hand"
by Joseph Stiglitz
The Chronicle of
Higher Education (US): "Taking on
'Rational Man'"
by Peter Monaghan
The
Journal of Investing (US): "The
2002 Nobel Prize in Economics"
by George Frankfurter
Call for monographs
Heterodox economists seeking
same for fruitful publishing relationship. Steve Pressman and Susan Feiner encourage PAE
subscribers to consider publishing their monographs or edited collections in
the Ashgate series Alternative Voices in
Contemporary Economics which they edit. Ashgate
is a world leader in the publication of academic economics monographs. This
series specializes in heterodox perspectives. The editors provide significant
support to authors, and move quickly from the initial proposal to a contract
offer. For further information visit http://www.ashgate.com/subject_area/economics_development/alternative_voices_series.htm
___________________________________________________________________________________________
EDITOR:
Edward Fullbrook
CORRESPONDENTS:
Argentina: Iserino;
Australia: Joseph Halevi, Steve Keen: Brazil: Wagner Leal Arienti;
France: Gilles Raveaud, Olivier Vaury,
J. Walter Plinge;
Germany: Helge Peukert;
Greece: Yanis Varoufakis;
Japan: Susumu Takenaga; United Kingdom: Nitasha Kaul; United
States: Benjamin Balak, Daniel Lien, Paul Surlis: At large:
Paddy Quick
PAST
CONTRIBUTORS: James Galbraith,
Frank Ackerman, André Orléan, Hugh Stretton, Jacques Sapir, Edward
Fullbrook, Gilles Raveaud,
Deirdre McCloskey, Tony Lawson, Geoff Harcourt, Joseph Halevi,
Sheila C. Dow, Kurt Jacobsen, The Cambridge 27, Paul Ormerod,
Steve Keen, Grazia Ietto-Gillies,
Emmanuelle Benicourt, Le Movement Autisme-Economie, Geoffrey Hodgson, Ben Fine, Michael A. Bernstein, Julie A. Nelson, Jeff
Gates, Anne Mayhew, Bruce Edmonds, Jason Potts, John Nightingale, Alan
Shipman, Peter E. Earl, Marc Lavoie, Jean Gadrey,
Peter Söderbaum, Bernard Guerrien,
Susan Feiner, Warren J. Samuels, Katalin Martinás, George M. Frankfurter, Elton G. McGoun, Yanis Varoufakis, Alex Millmow, Bruce
J. Caldwell, Poul Thøis
Madsen, Helge Peukert, Dietmar Lindenberger, Reiner Kümmel, Jane King, Peter Dorman, K.M.P.
Williams, Frank Rotering, Ha-Joon
Chang, Claude Mouchot, Robert E. Lane, James G. Devine,
Richard Wolff, Jamie Morgan, Robert Heilbroner,
William Milberg, Stephen
T. Ziliak, Steve Fleetwood, Tony Aspromourgos, Yves Gingras,
Ingrid Robeyns, Robert Scott Gassler,
Grischa Periono ___________________________________________________________________________________________
Articles,
comments on and proposals for should be sent to the editor at pae_news@btinternet.com
___________________________________________________________________________________________
Subscriptions
to this email journal are free.
Subscribe a
colleague(s) to this journal by sending their email address to pae_news@btinternet.com
Back issues of this
journal and other material related to the pae
movement are available at www.paecon.net.
To subscribe to this journal, send an
email with the message "subscribe" to pae_news@btinternet.com
To unsubscribe to this
journal, send an email with the message "unsubscribe" to pae_news@btinternet.com
|
home
page
PAE Review index
|