In recent years, the AustrianSchool has been an influential contributor to the social sciences. Yet most of the attempts to understand this vital school of thought have remained locked into a polemical frame. The Philosophy of the AustrianSchool challenges this approach through a philosophically grounded account of the School's methodological, political, and economic ideas. Raimondo Cubeddu acknowledges important differences between the key figures in the School--Menger, Mises and Hayek-- but also finds (...) important parallels between these thinkers. The theory of subjective value and the theory of spontaneous order, which both rest on ideas about the limitations of human knowledge, are the most important of these parallels. Drawn together, these theories represent one of the most original avenues of research in the social sciences and a major reformulation of liberal ideology. (shrink)
Focusing on the work of Friedrich von Hayek and Vernon Smith, we discuss some conceptual links between Austrianeconomics and recent work in behavioral game theory and experimental economics. After a brief survey of the main methodological aspects of Austrian and experimental economics, we suggest that common views on subjectivism, individualism, and the role of qualitative explanations and predictions in social science may favour a fruitful interaction between these two research programs.
The subjectivism of the Austrianschool of economics is a special case of Dewey's transactional philosophy, also known as pragmatism or pragmatic epistemology. The Austrian economists Carl Friedrich Menger (1840-1921) and Ludwig von Mises (1881-1973) adopted an Aristotelian deductive approach to economic issues such as social behavior and exchange. Like Menger and Mises, Friedrich A. Hayek (1899-1992) viewed scientific knowledge, even in the social sciences, as asserting and aiming for objective certainty. Hayek was particularly critical of (...) attempts to apply the empiricism of the natural sciences in the social sciences. Though Hayek was not a positivist in the sense ascribed to Milton Friedman (1912-), because he accepted the possibility of final, objective certainty, Hayek's view of scientific knowledge was closer to that of the logical positivists of the Vienna circle than to Dewey's pragmatism. Mises' a priorism, asserting and aiming for apodictic certainty, represented a more extreme form of objectivism even than Hayek's. Mises was similar in this regard to non-Austrian axiomatists such as Gerard Debreau (1921-2005), though he joined Hayek in eschewing mathematical formalism. In Dewey's contrasting view, the scientist commends new, alternative ways of knowing to the scientific community, offering more profound insight or more efficacious practical applications. Alternative ways of knowing which do not offer practical or intellectual benefits are to be rejected. Both the radical subjectivism of the Austrianschool and Dewey's transactional strategy justify rejection of the mirage of social justice. Dewey's knowledge as ways of knowing suggests a broader and more fundamental critique of the socialist position in the calculation debate. The arguments presented by the Austrianschool can be reformulated in terms of Dewey's pragmatic philosophy. (shrink)
In a recent paper (Denis, 2004b) I argued that the neoclassical use of the concept of equilibrium was guilty of a hypostatisation: an equilibrium which is only an abstraction and extrapolation, the logical terminus of a component process taken in isolation, is extracted and one-sidedly substituted for the whole. The temporary is made permanent, and process subordinated to stasis, with clearly apologetic results. I concluded by suggesting that this hypostatisation exemplified the contrast between formal and dialectical modes of thought, and (...) that it may be in the application of a dialectical notion of equilibrium that the heterodoxy can make its most telling contribution. This paper develops the line of thought that, while heterodox currents may superficially appear as divided amongst themselves as they are from the orthodoxy, there is truly something profound uniting the apparently disparate heterodox trends: the adoption of a dialectical method. I draw on the work of Sciabarra (1995, 2000), who argues that making process primary, which we might expect of Austrian economists, is the essence of dialectics, which we might (wrongly, in his view) identify with Marxism. If this view is, as I believe, fundamentally correct, perhaps (a) we can only understand the method of neoclassical economics by contrasting it with a dialectical approach, and (b) we can explore the potential for common ground between the various heterodox currents by examining their attitude, both implicit and explicit, to dialectics. (shrink)
Contemporary Austrian?school economists reject neoclassical welfare theory for being founded on the benchmark of a perfectly competitive general equilibrium, and instead favor a formal theory deemed consistent with the notions of radical subjectivism and disequilibrium analysis. Roy Cordato advances a bold free?market benchmark by which to formally assess social welfare, economic efficiency, and externalities issues. Like all formalist, a priori theory, however, Cordato's reformulation cannot meet its own standards, being theoretically and empirically flawed, and perhaps ideologically suspect.
The name "School of Salamanca" refers to a group of theologians and natural law philosophers who taught in the University of Salamanca, following the inspiration of the great Thomist Francisco de Vitoria. It turns out that the Scholastics were not simply medieval, but began in the 13th century and expanded through the 16th and 17th centuries; and they developed some original theories about economics and international law.Why should a few men mainly interested in theology and ethics apply themselves (...) in analyzing issues so far from their worries? The answer leads us to a revision of the morality rules, due to the new problems in business ethics. Thus, for example, the appearance of inflation made them have doubts about the merchant's morality. In order to solve this and other problems, they began to analyze the new and suspicious economic activity. As a result of their observations about ethical issues they discovered some advanced theories for the history of economic thought, such as the early formulation of the quantity theory of money. (shrink)
Fifty years ago, the Argentinean economist Raúl Prebisch published a paper called Estúdio Económico de América Latina. The Estúdio was one of the first texts that set up what was later termed the ?Prebisch-Singer thesis? or, more widely, the Latin American School of Economics. According to this document, Latin American countries should undergo an industrialization program under the direct supervision of the national state. The rationale for this thesis was the deterioration of the terms of trade for countries (...) exporting primary commodities and importing manufactured goods. The focus here is on the argumentative structure of the document, which targets two different audiences, a lay and a specialized one. Relying on a center-periphery metaphor, Prebisch stresses the shortcomings of conventional economic theory when applied to distinct historical circumstances, i.e., to the peculiar conditions experienced by peripheral countries. A rhetorical approach to the Estúdio also shows that it represents a deliberate effort to assemble a large volume of empirical data about Latin America and its foreign trade. This was not a widespread procedure at the time. As is usually the case in well-built argumentative discourses, both inclusion and omission of certain sets of data look strategically contrived. (shrink)
Why would anyone want there to be natural foundations for the social sciences? In a provocative essay exploring precisely that question, historian Chris Renwick uses an interwar debate featuring William Beveridge, Lancelot Hogben, and Friedrich Hayek to begin to imagine what might have been had such a program calling for biological knowledge to form the natural bases of the social sciences been realized at the London School of Economics. Yet perhaps Renwick grants too much attention to differences and (...) “what-ifs” and not enough to the historical question of “what happened” afterward. “Chickens and Eggs” offers an alternative view of this rather vexed question—one grounded in what happened, which suggests that Renwick’s concerns may be somewhat misplaced. (shrink)
Much has been written about the relationship between biology and social science during the early twentieth century. However, discussion is often drawn toward a particular conception of eugenics, which tends to obscure our understanding of not only the wide range of intersections between biology and social science during the period but also their impact on subsequent developments. This paper draws attention to one of those intersections: the British economist and social reformer William Beveridge’s controversial efforts to establish a Department of (...) Social Biology at London School of Economics during the 1920s and 1930s. Featuring a fully equipped laboratory headed by a leading geneticist, the Department of Social Biology was Beveridge’s attempt to “cross-fertilise” biology and social science and, in so doing, take the ideological heat out of social scientific, in particular economic, methods of investigation. Exploring why Beveridge’s project failed and throwing light on its long-term legacies, this paper considers what we can learn from the short-lived Department of Social Biology. (shrink)
Abstract Many of Boettke's criticisms of formalist economics are justified. However, he defines formalism so broadly that it becomes practically synonymous with mainstream economics, while his criticisms primarily target the sins of formalist economics more narrowly defined. And since he treats Austrianeconomics as the only viable alternative to mainstream economics, he incorrectly awards victory to Austrianeconomics. While Austrianeconomics has some valuable ideas to contribute to mainstream economics, (...) it has serious deficiencies of its own. (shrink)
This paper sustains that reappraising Austrianeconomics in the light of Aristotelian ideas is not only possible but also fruitful. First, the paper draws a sketch of the essential features of Austrianeconomics. Next, it argues about the necessity for a thorough analysis of the notion of freedom, and it analyzes Mises's conception. Next, the paper exposes Aristotle's social, epistemological and economic thought related to Austrian main traits. An account of how the exercise of Aristotelian (...) virtues may be synergic with economic coordination and a sketch of the consequences of the proposal on the teaching of economics are then provided. Finally, the conclusion shortly sums up the content and relevance of Aristotle's contribution. (shrink)
Much recent work on the intellectual background of Austrianeconomics reveals an unfortunate lack of awareness of the distinct nature of the Austrian contribution to philosophy, from which the Austrian economists drew many of their ideas. The present essay offers a sketch of this contribution, contrasting Austrian philosophy especially with the modes of philosophy dominant in Germany. This makes it possible to throw new light on the relations on Mises, Kant and the Vienna circle, and (...) it allows us also to establish the extent to which Austrianeconomics might properly be seen as being allied to the German hermeneutic tradition of Dilthey, Gadamer, et al. The essay concludes with a criticism of the hermeneutic relativism recently canvassed by some Austrian economists, concentrating especially on the work of Don Lavoie, whose writing are treated as symptomatic of a wider and somewhat regrettable trend. (shrink)
Ludwig von Mises,2 who originated the view, and his students Friedrich Hayek and Murray Rothbard, who developed and extended it. On their view, the laws of economics are conceptual truths, and economic truth is grounded in an a priori science they call praxeology,3 or the “logic of action.”4 Essentially, praxeology is the study of those propositions concerning human action that can be grasped and recognized as true simply in virtue of an inspection of their constituent concepts.
THE ECONOMICS OF TIME AND IGNORANCE by Gerald P. O'Driscoll, Jr. and Mario J. Rizzo New York: Basil Blackwell, 1985. 261pp., $34.95 O'Driscoll and Rizzo, two leading exponents of the Austrian subjectivist school of economics, claim to provide an original and powerful challenge to mainstream neoclassical economics. They also argue that there is much common ground between the Austrian approach and the recent development of Post Keynesian analysis. In this essay, the validity of such (...) claims is analyzed, and the shortcomings of the Austrianschool's approach vis?à?vis Post Keynesian and neoclassical analysis is developed. (shrink)
Does the concept of “race” ﬁnd support in contemporary science, particularly in biology? No, says Naomi Zack, together with so many others who nowadays argue that human races lack biological reality. This claim is widely accepted in a number of ﬁelds (philosophy, biology, anthropology, and psychology), and Zack’s book represents only the latest defense of social constructivism in this context. There are several reasons why she fails to make a convincing case. Zack starts by arbitrarily ascribing an anachronistically essentialist connotation (...) to the concept of race. After having made that everyday notion semantically so crude and outdated there is no wonder that she ﬁnds it quite easy to conclude that such an awkward category has no place in science. Her main rationale for seeing our race distinctions as being poorly matched to biological characteristics (e.g., population differences in gene frequencies) is that these biological characteristics do not fall into discrete and mutually exclusive categories as “required” by the common-sense taxonomy. This opposition between the continuity of variation found in biology and the alleged discreteness of common-sense “races” is repeated throughout the book, and it is presented as creating an unbridgeable gap between biology and the colloquial concept of race. Contrary to what Zack says, however, today’s common-sense ideas about race are not so radically disconnected from contemporary science. Rather, “race” in ordinary usage is informed by biological knowledge to a considerable extent. Most people no longer think about race in terms of pre-Darwinian racial “essences” and “mutually exclusive” ideal types. In fact, as pointed out by Anthony Appiah (whom Zack quotes on this matter but without taking him seriously enough), the discourse on race has long been characterized by a practice of “semantic deference,” according to which people tend to use the word “race” assuming that the biologists could say more precisely than they could what it meant.. (shrink)
There is no doubt that Carl Menger and Ludwig von Mises can be considered as two of the most representative and influential members of the Austrianschool of economics. However, given the fact that this school is well known for being a methodological school, it might be surprizing to note how far these two prominent economists apparently stand on methodological questions. While Menger frequently insisted that "no essential differences between the ethical and the natural sciences (...) exists, but at most only one of degree"1, Mises emphasizes the alleged gulf between social and natural sciences to the point of adopting what he called a "methodological dualism". As a consequence of this dualism, Mises did not hesitate when it comes to the analysis of human action to refer to laws "derived a priori" that "permit of no exception" because they belong to "an aprioristic and universally valid theory" 2. Such an uncompromising apriorism was so contrary to the empiricist mood of.. (shrink)
SUBJECTIVISM, INTELLIGIBILITY AND ECONOMIC UNDERSTANDING: ESSAYS IN HONOR OF LUDWIG M. LACHMANN ON HIS EIGHTIETH BIRTHDAY Edited by Israel M. Kirzner New York: New York University Press, 1986. 319 pp., $35.00.
The paper aims to establish that Terence Hutchison’s argument in The Politics and Philosophy of Economics (1981) to the effect that the young F.A. Hayek maintained a methodological position markedly similar to that of Ludwig von Mises fails to establish the relevant conclusion. The first problem with Hutchison’s argument is that it is not clear exactly what conclusion he meant to establish with regard to the methodological views of the two paragons of 20th century Austrianeconomics. Mises (...) (in)famously maintained a rather extreme methodological apriorism. However, Hutchison’s argument does not support the claim that Hayek was ever an apriorist of the Misesian variety. The concept of a priori knowledge that emerges from Hayek’s epistemology – specifically the epistemology implied by Hayek’s work in theoretical psychology – is the direct opposite of Mises’ treatment of a priori knowledge. Simply stated, Hayek conceived of a priori knowledge as fallible and relative, while Mises considered a priori knowledge to be infallible and absolute. Thus, it cannot be maintained – if, indeed, Hutchison meant to establish – that Hayek was a Misesian apriorist during the years in question. What’s more, the paper shows that Hutchison’s argument does not support a weaker interpretation of the relevant conclusion. There are alternative interpretations of the evidence adduced by Hutchison that are both more charitable and more in line with Hayek’s epistemology that undermine Hutchison’s conclusion. (shrink)
This essay analyzes the relations between Austrian Praxeology and sociology. It argues that Praxeology is not only a codification and ramification of pure market economics but also to some degree the Austrianschool's variant or proxy of sociology. This argument particularly applies to Mises' Praxeology as the general theory of human action, with Weber's sociology understood as the science of social action, taken as Mises' acknowledged sociological source, inspiration or anticipation. The essay develops and substantiates the (...) argument by identifying certain sociological premises, concepts and observations in Mises' Praxeology, which are classified into the fields of general sociology, economic sociology and political sociology. The essay builds on and contributes to the growing economics and sociological literature on the relationship between Austrianeconomics and Weberian (and other) sociology. (shrink)
A deep theme of Austrianeconomics has been that of spontaneous order or selforganization of the economy. The origin of this theme dates to the putative founder of the AustrianSchool, Carl Menger, with his theory of the spontaneous emergence of money for transactions purposes in primitive economies being archetypal example (Menger, 1892). Menger drew this approach from the Scottish Enlightenment figures David Hume, Adam Ferguson, and Adam Smith, with the latter’s Wealth of Nations (1776) particularly (...) important. The most important developer of this idea within the tradition after Menger was F.A. Hayek (1948), who would identify this self-organization phenomenon with emergence, later expanding upon this into the broader concept of complexity (Hayek, 1952, 1967). Caldwell (2004) argues that this became an increasingly important focus of Hayek’s thought in the later years of his life. Among those examining this development in more detail besides Caldwell have been Koppl (2006, 2009), Rosser (2010a),1 and Lewis (2010). This essay will consider more thoroughly the relationship between the concepts of emergence and complexity and the roles that they have played in Austrianeconomics as well as more broadly in philosophy and science. An important point is that both of these concepts do not possess precise meanings; they are “terms of art” within philosophy. However, while closely linked through the general idea of a whole being “greater than.. (shrink)
This article presents a skeleton of a potential paradigm of human flourishing and happiness in a free society. It is an exploratory attempt to construct an understanding from various disciplines and to integrate them into a clear, consistent, coherent, and systematic whole. Holding that there are essential interconnections among objective [...].
Abstract This paper argues that history of economics has a fruitful, underappreciated role to play in the development of economics, especially when understood as a policy science. This goes against the grain of the last half century during which economics, which has undergone a formal revolution, has distanced itself from its `literary' past and practices precisely with the aim to be a more successful policy science. The paper motivates the thesis by identifying and distinguishing four kinds of (...) reflexivity in economics. The main thesis of this paper is that because these forms of reflexivity are not eliminable, the history of economics must play a constitutive role in economics (and graduate education within economics). An assumption that I clarify in this paper is that the history of economics ought to be part of the subject matter studied by economics when they are interested in policy science. Even if one does not accept the conclusion, the fourfold classification of reflexivity might hold independent interest. The paper is divided in two parts. First, by reflecting on the writings of George Stigler, Paul Samuelson, George and Milton Friedman, I offer a stylized historical introduction to and conceptualization of the themes of this paper. In particular, I identify various historically influential arguments and strategies that reduced the role of history of economics within the economics discipline. In it I also canvass six arguments that try to capture the cost to economics (understood as a science) for sidelining the history of economics from within the discipline. A sub-text of the introduction is that for contingent reasons, post World War II economics evolved into a policy science. Second, by drawing on the work of Kenneth Boulding, in particular, George Soros, Thomas Merton, Gordon Tullock, I distinguish between four species of reflexivity. These are used to then strengthen the argument for the constitutive role of the history of economics within the economics profession. In particular, I argue that so-called Kuhn-losses are especially pernicious when faced with policy choices under so-called Knightian uncertainty. (shrink)
The best representatives of the self-reflection of xinxue 心学 (the School of Mind) and its development during the Ming and Qing Dynasties are the three masters from the late Ming Dynasty. The overall tendency is to shake off the internal constraints of the School of Mind by studying the Confucian classics and history. During the Qing Dynasty, Dai Zhen had attempted to set up a theoretical system based on Confucian classics and history, offering a theoretical foundation for a (...) new academic movement that gradually suspended issues studied by the School of Mind. But the suspension of these issues does not mean they were resolved. For Peng Shaosheng, xinzong 心宗 (the Doctrine of Mind) has emerged from a bottleneck in the development of the Confucian yi li zhi xue 义理之学 (doctrine of meanings and principles): The only way to find the transcendent connection between the doctrine of meanings and principles and the Dao was through the internality of belief. In this case, the Lay Buddhists, represented by Peng Shaosheng, Wang Dashen and Luo Yougao, as lixue biepai 理学别派 (Alternative School of Principles), played the role that the School of Mind had undertaken in the late Ming Dynasty, thus becoming a shelter for the Confucian doctrine of meanings and principles. To a certain extent, the revival of weishixue 唯识学 (the Consciousness-Only School) during modern times was simply a continuance of the “Alternative School of Principles”. It took over the Lay Buddhist theme of the doctrine of meanings and principles of the Qing Dynasty and tried to construct a new pattern of learning for Confucian classics that matched up with the doctrine of meanings and principles, offering a model of integration for the reconstruction of the Confucian tradition. (shrink)
The best representatives of the self-reflection of xinxue 心学 (the School of Mind) and its development during the Ming and Qing Dynasties are the three masters from the late Ming Dynasty. The overall tendency is to shake off the internal constraints of the School of Mind by studying the Confucian classics and history. During the Qing Dynasty, Dai Zhen had attempted to set up a theoretical system based on Confucian classics and history, offering a theoretical foundation for a (...) new academic movement that gradually suspended issues studied by the School of Mind. But the suspension of these issues does not mean they were resolved. For Peng Shaosheng, xinzong 心宗 (the Doctrine of Mind) has emerged from a bottleneck in the development of the Confucian yi li zhi xue 义理之学 (doctrine of meanings and principles): The only way to find the transcendent connection between the doctrine of meanings and principles and the Dao was through the internality of belief. In this case, the Lay Buddhists, represented by Peng Shaosheng, Wang Dashen and Luo Yougao, as lixue biepai 理学别派 (Alternative School of Principles), played the role that the School of Mind had undertaken in the late Ming Dynasty, thus becoming a shelter for the Confucian doctrine of meanings and principles. To a certain extent, the revival of weishixue 唯识学 (the Consciousness-Only School) during modern times was simply a continuance of the "Alternative School of Principles". It took over the Lay Buddhist theme of the doctrine of meanings and principles of the Qing Dynasty and tried to construct a new pattern of learning for Confucian classics that matched up with the doctrine of meanings and principles, offering a model of integration for the reconstruction of the Confucian tradition. /// 明清之际对心学的检讨以及心学内部的发展，以晚明三大师为代表，其总的 倾向是以经史之学的学问方式走出心学的内在性束缚。到了清代，戴震则尝试从独 玩的经史之学出发建设--种新的理论系统，试图为这一逐渐搁置心学问题的新的学 术运动提供理论基础。不过，心学的被搁置，并不意味着心学所指涉问题的消失。 彭绍升的 "心宗" 已经突破了儒家义理学发展的瓶径; 义理学与道体的超越关联必 须透过信仰的内在性来获得。以彭钥升、汪大绅、罗有高为代表的居士佛教，作为 "理学别派承担起了在晚明由心学所承担的功能，从而成为儒家义理学的寄身 之所。近代唯识学的复兴，在→定意义上是对 "理学别派" 的继承。小仅在义理学 的意义上接过了清代居士佛学的主题，更在清代朴学的传统上，尝试亘:构·种与义 理学配合的新的经学模式，在唯识学的基盘上为重构儒学传统提供了-种极有意义 的整合模式。. (shrink)
Austrianeconomics starts out from the thesis that the objects of economic science differ from those of the natural sciences because of the centrality of the economic agent. This allows a certain a priori or essentialistic aspect to economic science of a sort which parallels the a priori dimension of psychology defended by Brentano and his student Edmund Husserl. We outline these parallels, and show how the theory of a priori dependence relations outlined in Husserl’s Logical Investigations can (...) throw light on the Austrian account of entrepreneurship. (shrink)
The primary aim of the text is to introduce the reader to the relationship between economics and ethics and to the application of economic ethics in the evaluation of the market. The reader will gain insight into: * The ethical and methodological strategy of economics and criticism of the core assumptions that underpin the economic defense of free market operation. * The characteristics of different ethical theories (utilitarianism, duty and rights ethics, justice and virtue ethics) that can be (...) used to evaluate the free market. * How to apply economics in conjunction with ethical theories to evaluate economic trends and policies that promote the free operation of the market and are subject to public debate. These insights will help to develop the reasoning and analytical skills needed to criticize economic analysis as well as to apply ethical concepts to moral issues in economic policy. (shrink)
Abstract Murray Rothbard's Austrian Perspective on the History of Economic Thought demonstrates his mastery of the literature. But his interpretation of the development of economics reflects, and is therefore severely limited by, his Austrian?libertarian perspective. Indeed, Rothbard appropriates the history of economic thought principally to advance his perspective, as seen in his neglect of social control, his identification of his desired economic system with the natural order of things, and especially in his denigratory treatment of Adam (...) Smith?at bottom for not being an Austrian economist and a true libertarian. A partly informed, partly myopic and sometimes useful interpretation, this is the work of an ideologue. (shrink)
This article reports the results of an exploratory investigation of a particular area of moral tension experienced by MBA students in a graduate school of business. During the first phase of the study, MBA students'' own perceptions about the moral climate and culture of the business school were examined. The data gathered in this first part of the study indicate that the students recognize that a central part of this culture is constituted by a shared familiarity with a (...) set of institutionally reinforced premises about human behavior and motivation including the ideas that: 1) people are self-interested utility-maximizers, 2) individuals should be unimpeded in their pursuit of their own self-interest through economic transactions, and 3) virtually all human interactionsare economic transactions. The data further indicated that the business students experience a degree of tension between this ethic of self-maximizing and the everyday ethics prevalent in our broader culture, in which altruism and selflessness are central elements. The final section of the study was an effort to see whether and how these institutionally sanctioned premises were integrated into the students'' arguments about the relationship between self-interest and social responsibility. (shrink)
Neoclassical and Austrian/evolutionary economic paradigms have different implications for integrating corporate social responsibility (corporate citizenship) and competitive strategy. porter's "Five Forces" model implicitly rests on neoclassical theory of the firm and is not easily reconciled with corporate social responsibility. Resource-based models of competitive strategy do not explicitly embrace a particular economic paradigm, but to the extent their conceptualization rests on neoclassical assumptions such as imperfect factor markets and profits as rents, these models also imply a trade-off between competitive advantage (...) and corporate social responsibility. Differences in Austrian/evolutionary economic model's assumptions about equilibrium, profits, and other economic concepts allow this paradigm to embrace alternative views of strategy such as the activities or dynamic capabilities views. These alternative views of strategy focus on learning and adaptation; they align more easily with corporate social responsibility. In practice this alignment comes about because social engagement facilitates the learning and adaptation that are a source of competitive advantage. Among the many business arguments for CSR such as improved employee morale/productivity or brand differentiation, this view prioritizes innovation. (shrink)
Research in the social sciences received generous patronage in the late 1960s and early 1970s. Research was widely perceived as providing solutions to emerging social problems. That generosity came under increased contest in the late 1970s. Although these trends held true for all of the social sciences, this essay explores the various ways by which economists in particular reacted to and resisted the patronage cuts that were proposed in the first budgets of the Reagan administration. Economists’ response was three fold: (...) to engage in joint lobbying with other social scientists, to tap into their authority as a respected policy player, and to influence the types of research financed by the patron. With interviews of the former lobbyist for the social scientists, the former director of the Economics program for the National Science Foundation, and a review of the archival records of economists and their scholarly society, we discuss how economists have claimed entitlement to patronage in the closing decades of the twentieth century. We observe a dynamic and productive relationship between politicians and researchers mediated by the National Science Foundation, where civil servants, lobbyist and public minded scientists, and self-serving grantees trade roles. (shrink)
This article provides an ISCT analysis of commercial bribery focused on transaction cost economics. In the language of Antitrust, commercial bribery is a form of vertical arrangement subject to the same efficiency analysis that has found other vertical arrangements potentially beneficial to consumers. My analysis shows that actions condemned as commerical bribery in the Honda case (1996) may well have benefited Honda's dealer network once promotional free riding and other forms of rent seeking by dealers are considered. I propose (...) that the term "commercial bribery" should be avoided until after an ISCT analysis shows that the community is likely to have been harmed. The term "third-party payments" is a more ethically neutral term with which to begin the analysis. (shrink)
Stakeholder theorists distinguish between normative stakeholders, those who gain moral standing by making contributions to the firm, and derivative stakeholders, those who can constrain the corporate association even though they make no contribution. The board of directors has the legal authority to distinguish among these stakeholder groups and to distribute rights and obligations among these stakeholder groups. To be sure, this stakeholder formulation appropriately seizes on the firm’s voluntary, associative character. Yet, the firm’s constituents contribute assets and incur risks to (...) participate in market, economic activities. And, as such, the firm’s “stakeholders” must share an imperfect language to assist in making two key economic decisions: (1) who are the legitimate and who are the derivative stakeholders; and (2) who should sit on the board? Still, stakeholder theorists have good reason to be skeptical of neoclassical economics. Its assumptions that all act opportunistically and that all can calculate rationally and fully hardly correspond to studies on the managerial experience of corporate coordination. However, advances in behavioral law and economics now provide a cogent economic logic that readily fits into a stakeholder mode. In brief, we argue that (1) the firm’s economic purpose designates legitimacy to core stakeholders, to those who add value, assume unique risk, and can incur harm; (2) the board serves as the principal who coordinates these core stakeholders to sustain competitive advantage and new wealth creation; and (3) state incorporation law, Delaware in particular, reinforces the board’s function. These, in turn, supply selection criteria for board membership. We aim to synchronize concepts from behavioral law and economics with stakeholder theory. (shrink)
Ayn Rand highly recommended the economic writings of the Austrianschool, particularly those of Ludwig von Mises. At least insofar as regards antitrust, money, and government, for the most part, paradoxically, the subjectivist Austrians, and the objectivist Randians, are as two peas in a pod. On the first two of these three, moreover, Rand and Murray Rothbard are on similar sides of the argument, at least vis-a-vis Mises and F. A. Hayek. With regard to the third, there is (...) disagreement amongst the Austrians, and this is matched by ambivalence on the part of Rand herself. (shrink)
Nelson and Winter’s An Evolutionary Theory of Economic Change (1982) was the foundational work of what has become the thriving sub-discipline of evolutionary economics. In attempting to develop an alternative to neoclassical economics, the authors looked to borrow basic ideas from biology, in particular a concept of economic “natural selection.” However, the evolutionary models they construct in their seminal work are in many respects quite different from the models of evolutionary biology. There is no reproduction in any usual (...) sense, “mutation” is directed as opposed to blind, and there is no meaningful distinction between phenotype and genotype. Despite these substantial departures from the conceptions of evolutionary biology, I argue that the “evolutionary” economics of Nelson and Winter is indeed a legitimate extension of Darwinian evolutionary principles to a novel domain, and that the traditional conception of evolution by natural selection must be revised. The novel features of evolutionary economics models reflect the distinctive theoretical requirements faced by economists. I further contend that reproduction, heredity, blind variation, and the genotype/phenotype distinction are all inessential to evolutionary theory, and that their role in evolutionary biology is a domain-specific feature of biological theory. (shrink)
The aim of this paper is to present and discuss the philosophical views concerning mathematics of the founders of the so called Warsaw Mathematical School, i.e., Wacław Sierpiński, Zygmunt Janiszewski and Stefan Mazurkiewicz. Their interest in the philosophy of mathematics and their philosophical papers will be considered. We shall try to answer the question whether their philosophical views influenced their proper mathematical investigations. Their views towards set theory and its rôle in mathematics will be emphasized.