Motivations for Pluralism: Politics and Values in Economics

Friday, 4 April 2014

 Bog Ref Link http://www.p2pfoundation.net/Transfinancial_Economics


 

This document openly and explicitly states the motivations that bring together the RE organisers and RE groups, and address the underlying question of why we chose the aims that we have, and the direction for economic curriculum reform we have. We address the pertinent question: how political is our organising?

1. We are not a politically aligned network, but we hold political, philosophical and ethical values at the core of our organising. By this, we mean that we share a broad vision of what is good for academia and society. Namely:
2. We believe that the ability to effectively participate in democratic processes is vital for all citizens.
3. Because of this, we want to demystify economics in the public eye and bring it closer to mass critique.  We believe that the current state of economic policy debate, in which citizens are liable to over-deference to experts and reliant on often badly argued “expert” opinion, is a bad one.
   
4. We believe that a fully functioning democracy requires rich and imaginative debate at the level of economic concepts.
5. Because of this, we want to enrich both public debate around economics, and the academic economics that feeds it. Right now both policy and academic debates have become mono-cultural and stale.
   
6. We believe that the current neoclassical economics taught in most departments is not politically neutral, and thus it is important to introduce pluralism in economics. Nor did the classical economists see themselves as practising a politically neutral discipline.

7. We believe that pluralism and open-mindedness to other disciplines is a value that would improve the culture, methodology, and practice of economic research and teaching. We do not collectively advocate for any single economic theory or policy to dominate others; we want to introduce substantial debate back into economics.

Appendix

I: What we mean by “value-neutrality” in the social sciences

By “value-neutrality”, we mean neutral or silent on issues of: what kinds of changes are good for society; what one ought to value (ethical, normative or positive values); what kind of society is a good one; what is the good life; what is the essential nature of being human, that reaches beyond particular configurations of society.

Although every model is, by necessity, an abstraction from the full complexity of society, the abstractions that are made in neoclassical economics impose particular emphases that have values explicitly or implicitly embedded in them. The questions that any school of social science chooses to pose as its most fundamental questions reveal 1) what is considered as “important” or “relevant” for the discipline, and 2) a pre-made conception of what society is and how one ought to study it, prior to actual research. Therefore we cannot pretend that neoclassical economics is simply a value-neutral science, and instead we ought to discuss and debate what kinds of values it embeds, in contrast to other ways of studying society, and in contrast to other schools of economics.

II: Examples of posits of neoclassical economics that are not value-neutral

In the below section, we give examples of concepts, theories and assumptions that are predominant in neoclassical economics. Not all of them are included in every model, but we seek to give a wide range of examples. This does not mean we support the teaching of the opposites of these examples, but that we believe it is problematic to teach one side in isolation.

a) Normative concepts (concepts that explicitly suggest what is better or worse for people or for society)

1. Pareto optimality: the major criterion of what it means for a situation to be good, or in economic terms, “efficient”; status-quo biased, blind to distributional issues such as inequality
2. Kaldor-Hicks efficiency: possibly the second most popular criterion of efficiency after Pareto optimality; assumes that everyone has the same marginal utility of money
3. Utility and welfare: both these terms are heavily structured economic concepts, with heavily ethical connotations in both their naming and their use
4. Utility is derived from personal preference-satisfaction: this is implicitly politically libertarian, as it assumes individuals always know what is best to maximise their own utility, or equivalently, that a person’s preferences are the most important to satisfy
5. Consumers’ and producers’ surplus: used in microeconomic analysis of gains from trade, prone to same problems as Kaldor-Hicks efficiency
6. Discount rates: the use of exponential discounting under-estimates long-term costs such as environmental risks  

b) “Thick” descriptive concepts (concepts that are descriptions of human nature, but which imply ethical attitudes as to what is important or what is good)

1. Agents arrive at the market with preferences ready-formed: this assumption means that economists have not ventured into the questions of where preferences arise and how preferences themselves might be shaped by the structure of the economy or society
2. Utility in macroeconomic models is determined solely by consumption: implies consumerism and materialism: people have no preferences over relational aspects of production, or even over whether they are employed or not (other than through its effects on their being able to afford more stuff)
3. Representative agent modelling is utilitarian: the “social planner” in DSGE models aggregates individual utilities and maximises this aggregate utility
4. Representative agent modelling is atomistic: this commits macroeconomics to an individualistic rather than holistic understanding of society

III: References to more material on value-neutrality and economics

Ingrid Robeyns, Economics as a Moral Science, http://crookedtimber.org/2013/10/31/economics-as-a-moral-science/

Robert Shiller, Economists as Worldly Philosophers, http://www.aeaweb.org/aea/2011conference/program/retrieve.php?pdfid=490

Social Economics

Socioeconomics (also known as socio-economics or social economics) is the social science that analyzes how societies progress, stagnate, or regress because of their local or regional economy, or the global economy.

Contents [hide] 1 Overview 2 See also 3 External links 4 References

[edit] Overview

This section may stray from the topic of the article. Please help improve this section or discuss this issue on the talk page. (November 2012)

Socioeconomics is sometimes used an umbrella term with different usages. 'Social economics' may refer broadly to the "use of economics in the study of society."^[1] More narrowly, contemporary practice considers behavioral interactions of individuals and groups through social capital and social "markets" (not excluding for example, sorting by marriage) and the formation of social norms.^[2] In the latter, it studies the relation of economics to social values.^[3]
A distinct supplemental usage describes social economics as "a discipline studying the reciprocal relationship between economic science on the one hand and social philosophy, ethics, and human dignity on the other" toward social reconstruction and improvement^[4] or as also emphasizing multidisciplinary methods from such fields as sociology, history, and political science.^[5] In criticizing mainstream economics for its alleged faulty philosophical premises (for example the pursuit of self-interest) and neglect of dysfunctional economic relationships, such advocates tend to classify social economics as heterodox.^[6]
In many cases, socioeconomists focus on the social impact of some sort of economic change. Such changes might include a closing factory, market manipulation, the signing of international trade treaties, new natural gas regulation, etc. Such social effects can be wide-ranging in size, anywhere from local effects on a small community to changes to an entire society. Examples of causes of socioeconomic impacts include new technologies such as cars or mobile phones, changes in laws, changes in the physical environment (such as increasing crowding within cities), and ecological changes (such as prolonged drought or declining fish stocks).^{[citation needed]} These may affect patterns of consumption, the distribution of incomes and wealth, the way in which people behave (both in terms of purchase decisions and the way in which they choose to spend their time), and the overall quality of life.
The goal of socioeconomic study is generally to bring about socioeconomic development, usually in terms of improvements in metrics such as GDP, life expectancy, literacy, levels of employment, etc.^{[citation needed]}
Although harder to measure, changes in less-tangible factors are also considered, such as personal dignity, freedom of association, personal safety and freedom from fear of physical harm, and the extent of participation in civil society.^{[citation needed]}

[edit] See also

Economic sociology Behavioral economics Economic imperialism (economics) Industrial Revolution Political economy Social class Income inequality metrics Household income in the United States List of countries by income equality

Socionomics Marek Belka Amitai Etzioni Jose Perez Adan Gross Domestic Product Human Development Index Sustainable Human Development Index Gender-related Development Index Index of Economic Freedom

National Welfare Index Human Poverty Index Index of Sustainable Economic Welfare Genuine Progress Indicator Happy Planet Index Gross national happiness Legatum Prosperity Index

[edit] External links

Association for Social Economics The Society for the Advancement of Socio-Economics SASE Spanish Chapter Economy and Society Forum for Social Economics

Look up socioeconomic in Wiktionary, the free dictionary. International Journal of Social Economics Journal of Socio-Economics Review of Social Economy Socio-Economic Review

[edit] References

1. ^ John Eatwell, Murray Milgate, and Peter Newman, [1987] 1989. Social Economics: The New Palgrave, p. xii. Topic-preview links, pp. v-vi.
2. ^ • Gary S. Becker, 1974. "A Theory of Social Interactions," Journal of Political Economy, 82(6), pp. 1063-1093 (press +).
   • _____ and Kevin M. Murphy, 2001, Social Economics: Market Behavior in a Social Environment. Description and table of contents. Harvard University Press.
   • Mariano Tommasi and Kathryn Ierulli, ed., 1995. The New Economics of Human Behavior, Cambridge. Description and preview.
   • Steven N. Durlauf and H. Peyton Young 2001. "The New Social Economics" in Social Dynamics, ch. 1, pp. 1-14. Preview. MIT Press.
   • Steven N. Durlauf and Lawrence E. Blume, 2008. The New Palgrave Dictionary of Economics, 2nd Edition:

   "social interactions (empirics)" by Yannis M. Ioannides. Abstract.

   "social interactions (theory)" by José A. Scheinkman. Abstract.

3. ^ • 'Relation of Economics to Social Values' is the corresponding title of JEL: A13 in the Journal of Economic Literature classification codes.
   • Jess Benhabib, Alberto Bisin, and Matthew Jackson, ed., 2011. Handbook of Social Economics, Elsevier:
   Vol. 1A: Part 1. Social Preferences, ch. 1-11; Part 2. Social Actions, ch. 12-17. Description & Contents links and chapter-preview links.
   Vol. 1B: Part 3. Peer and Neighborhood Effects, ch. 18-25. Description & Contents links and chapter-preview links
4. ^ • Mark A. Lutz, 2009. "Social economics," in Jan Peil and Irene van Staveren, ed., Handbook of Economics and Ethics, p. 516. [Pp. 516-22.] Edward Elgar Publishing.
   • _____, 1999. Economics for the Common Good: Two Centuries of Social Economic Thought in the Humanist Tradition, Routledge. Preview.
5. ^ • John B. Davis and Wilfred Dolfsma, 2008. "Social economics: an introduction and a view of the field," in John B. Davis and Wilfred Dolfsma, ed.,The Elgar Companion to Social Economics, pp.1-7. Description
   • International Journal of Social Economics. Description.
   • Socio-Economic Review. Description.
6. ^ • Edward O'Boyle, ed., 1996. Social Economics: Premises, Findings and Policies, pp. ii and ix.
   • Tony Lawson, 2006. "The Nature of Heterodox Economics," Cambridge Journal of Economics, 30(4), pp. 483-505. Alternate access copy (press +).
   • Frederic S. Lee, 2008. "heterodox economics," The New Palgrave Dictionary of Economics, 2nd Ed., v.4, pp. 1–6. Abstract.

• Pokrovskii, Vladimir N. (2011) Econodynamics. The Theory of Social Production, Springer, Berlin.
• Gustav Cassel, [1931] 1932. The Theory of Social Economy. Reprinted 1967, Augustus M. Kelley. From the Mises Institute, select among sections (press +).
• Max Weber, 1922. Economy and Society, 2 v. Description and scroll to chapter-preview links.
• Friedrich von Wieser, [1924] 1928. Social Economics. Foreword by Wesley C. Mitchell. Reprint 2003, Routledge. Scroll to chapter-preview links links.