Volume II Issue 2

Spring 2009

1. Economics and religion - a personalist perspective

Fr Petre Comşa ; Costea Munteanu.
Traditionally, the reaction of many mainstream economists to the effort to integrate theology and economics demonstrated the difficulty of doing so in a way that could be broadly recognized as legitimate. This state of things is simply an indication of a broad consensus within the field of economics that methods, norms, and even concerns construed to be related to religious belief have no place in the scientific study of economics.Recently, the situation seems to be changing, however. A decade ago, a group of Christian Catholic social thinkers engaged in dialogue with free-market economists concerning the morality of market activity. As a result, this interdisciplinary exchange inspired the conception of a new subdiscipline that sought to synthesize central aspects of theology and economics, thereby giving rise to a new body of scholarship termed economic personalism. The general idea is to promote a humane economic order that benefits from market activity but does not reduce the human person to just another element in economic phenomena.This paper suggests that, under such circumstances, the Christian-Orthodox contribution to further development of this new field of investigation could consist in bringing forward the teaching of the Holy Fathers of Eastern Tradition. It is argued that, in this way, the moral dimension which dominantly defines the Catholic vision of the human person could be surpassed and even transfigured by the spiritual dimension which fully inform the […]

2. Six choice metaphors and their social implications

Frederic Jennings.
The six metaphors analyzed in this paper unfold stepwise into an interdisciplinary systems framework based on planning horizons. The notion of planning horizons serves as an ordinal measure of rationality and organization, in a social systemic context of ecological interdependence. Each metaphor opens into the next to extend our understanding. The neighborhood store is where almost all neoclassical choices are made, with visible options spread on shelves and a budget allocated among them, maximizing its worth. The chessboard demands strategic contingency planning in an evolving context of incompletely projectable outcomes. A transportation network combines substitutes and complements into a static complex system, intertwined and non-decomposable, leaving economists with a problem of institutional choice. Love is a complementary good-virtually costless to produce and distribute, always in demand-that should be abundant, though it is scarce. The educational system brings inter-horizonal complementarities into our field of view, where contagion effects of longer horizons enhance complementarity at the expense of substitution, shifting the mix of interdependence away from conflicts to concerts of interest. Human ecology is a dynamic complex system of interactive phenomena opening into time, evolving constantly in its structure, relationships and diversity and demanding ethics in our relations. These six metaphors raise some pressing questions on the invisible limits of models […]

3. The inheritance of heterodox economic thought: an examination of history of economic thought textbooks

Mary Wrenn.
The inheritance of heterodox economics hinges upon the degree to which the next generation is exposed to the history of the discipline's thought. The potential to include heterodox thought into the curriculum presents itself most easily through history of economic thought classes. The potential is limited by the professor, but it is also circumscribed by the material presented or withheld in history of economic thought textbooks. If included, the presentation of heterodox methodologies and philosophies impresses upon students the relevance and importance of pluralism and dissenting views and by consequence, the future course of the discipline. This research seeks to examine the presentation of heterodox economics in history of economic thought textbooks and to assess the amount of space dedicated to its study and further, to explore how textbook adoption impacts the inheritance and heritage of heterodox thought and philosophy.

4. The epistemology of modern finance

Xavier de Scheemaekere.
Modern finance is a social science where the complexity of mathematical models compares to that of physics. The aim of this paper is to provide a conceptual framework for the interpretation of mathematical models in finance, in order to determine the epistemological standards according to which financial theory must be assessed. The analysis enlightens the contrast between highly objective results and the radical uncertainty that governs the markets. The main contribution of the paper is to show that the reasons why finance models are relative and non-causal are deeply rooted in the nature of finance theory itself. An important consequence is that arbitrage-free model prices are reference prices and indicators of the economical features underlying mathematical models. As such, they can be used to structure and support final pricing and hedging decisions, but not to predict future market prices.

5. A review of Stephen T. Ziliak and Deirdre N. McCloskey, The Cult of Statistical Significance. How the Standard Error Costs Us Jobs, Justice, and Lives, The University of Michigan Press, Ann Arbor, 2008, 320 pages

Tamás Dusek.

6. A review of Peter Söderbaum, Understanding Sustainability Economics. Towards Pluralism in Economics, London, Sterling/VA: earthscan, 2008, 158 pages

Karl Zinn.
It is almost impossible to read Söderbaum´s lucid critique of neoclassical economics and neoliberalism without having in mind the recent economic crisis as the background of his attack against the short-sightedness and inhuman corollaries of mainstream economics.

7. A review of Ralph Harris in His Own Words, the Selected Writings of Lord Harris, Edited by Colin Robinson, Cheltenham, UK, Edward Elgar and the Institute of Economic Affairs, 2008, 343 pages

Valentin Cojanu.
To many people market liberalism may seem a hard sell in our times, looking like a menace rather than an opportunity. It may require an extraordinary personality, shaped by a limitless altruism, to admit that the riches of a few could have been accumulated if more entrepreneurship existed. That was probably the lesson Schumpeter had drawn after leaving behind a bankrupt private bank in 1924, after a four-year stint as its president, and heading for academic recognition. Fact is that, if we count from the 1930s, more than eighty years of dominance of liberal thinking in the discipline of economics have left both ordinary people and scholars with a lingering sense of perplexity. Asking about the resilience of mainstream economics may sound tautological but noted thinkers did not refrain from doing the very same. John Stuart Mill knew that ideas had to wait for "circumstances to conspire in their favour" (p. 208) [1] and J.M. Keynes observed: "The power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas…soon or late, it is ideas, not vested interests, which are dangerous and for good or evil." Along the way, Hayek thought in his essay on intellectuals and socialism (1949), "it is no exaggeration to say that once the more active part of the intellectuals has been converted to a set of beliefs, the process by which these become generally accepted is almost automatic and irresistible" (p. 40).

8. Commentary on Teaching Economics with Podcasts, Literature and Movies

James Moulder.
For sure, economics is a technical subject, with an impressive vocabulary and an imposing methodology. At the same time, quite literally, it’s about bread and butter issues. And so, one of the challenges of teaching economics is to connect these two dimensions of the subject. In particular, the trick is to make meaningful connections that aren’t trivial. And so, it’s about enriching reliable textbooks with material that’s on this website and in these books.