Volume VI Issue 2

Spring 2013

1. The ‘desire for money:’ Aristotelian blind spot in the field of economics? A French heterodox point of view

Richard Sobel.
If the field of economics has today become the archetype for determinism in the social sciences, it comes at the price of a form of objectivity founded on the complex process of the reduction and naturalization of a certain type of social relation, a process best described via the real approach or the ‘approach by value.’ A radical critique of this process requires the deconstruction of this dominant approach, characterized by the articulation of neoclassical theory and economic liberalism. It is only once the repression of the desire for money, a repression constitutive of false economic objectivity, has been denounced that the standard model can then be subject to such a critique. This will in turn open the possibility of an economic theory which is radically anti-naturalist.

2. Subjective preferences and alternative costs

William Barnett Il ; Walter Block.
The present paper is an exploration of the economics of subjectivism and opportunity or alternative costs. Most contemporary economists pay lip service to these concepts, but when push comes to shove, all too often they jettison them. We shall illustrate this lapse from basic economics with a challenge that has been perplexing several modern economists: why do people always walk on staircases, but only sometimes on escalators. Landsburg (2002) misunderstood the reason people only sometimes walk on escalators, whereas they always walk on stairs. Garrison (2009) tackled the same problem, with somewhat different results. Both of them, however, are guilty of a failure to use what is perhaps the most fundamental concept in the economist’s toolkit – opportunity cost, known to an immense number of non-economists by the aphorism ‘There’s no such thing as a free lunch.’ This oversight resulted in his (their) failure to explain why people only sometimes walk on escalators, in contradistinction to the fact that they always walk on staircases.

3. Money and value: a synthesis of the state theory of money and original institutional economics

Georgios Papadopoulos.
The paper proposes a synthesis of original institutional economics and in particular of the work of John R. Commons with the state theory of money, constructing a theoretical framework for the analysis of economic value in relation to money. The argument developed resists the naturalistic, individualistic, neoclassical analysis of value, proposing an account based on antagonism and negotiation framed by social institutions and more specifically by the institution of money. Money plays an active role in the process of the constitution of the system of prices, creating possibilities of mediation in the conflicts around the distribution of social production and contributing towards the establishment of 'reasonable value' in economic transactions.

4. The missing link: From Kautilya's The Arthashastra to modern economics

Marinko Škare.
The aim of this paper is twofold: first, to provide evidence supporting the thesis that Kautilya was the first political economist; second, to verify that a systematic study of political economy has begun long before the ideas and works of Adam Smith. It was in the works of Kautilya (around 375 B.C.). In order to validate the aims of our study, we look for evidence in his Arthashatra of rational behaviour, self-interest motivation, and market elements of a traditional commercial society. Providing a sound interpretation of Kautilya's main arguments, we demonstrate that his is no less a systematic study in political economy than Smith's The Wealth of Nations. Economics is a science that tries to offer policies and practices for creating and enriching a nation's wealth, and in that sense, the Arthashastra (literal translation being The Science of Wealth) represents the first systematic manual of political economy. The development of economics as a science must take cognition of the economic principles and ideas presented in The Arthashastra so as to reveal the true origins of economic thought and its evolution. It is only by understanding methodological problems in a historical perspective we can understand the modern methodological and conceptual issues.

5. The economic consequences of homo economicus: neoclassical economic theory and the fallacy of market optimality

David Calnitsky ; Asher Dupuy-Spencer.
This essay presents a critique of the standard ascension from the rational agent to the optimal market in economic theory. Critiques of homo economicus are found unsatisfactory on grounds that its employment allows for the prediction of essential features of actual markets. Using this same criterion we introduce Gary Becker’s essay, ‘Irrational Behavior and Economic Theory,’ which demonstrated that the same features of markets could be derived from non-rational behaviour. Thus, non-rationality is equally predictive but is less restrictive than rationality. Once the assumption of rationality is relaxed, the concept of market optimality (though not market order) must also be sacrificed.

6. Review of The Social Sciences and Democracy, edited by Jeroen Van Bouwel, London, Palgrave Macmillan, 2009, 268 pp., £58 hb, ISBN 9780230224391

Ioana Negru.

7. Review of James E. Alvey, A Short History of Ethics and Economics: The Greeks, Cheltenham (UK), Edward Elgar Publishing, 2011, x+184 pp, hb, ISBN 9781847202017

Dragoș Bîgu.

8. Review of Pranab Bardhan, Awakening Giants, Feet of Clay: Assessing the Economic Rise of China and India, Princeton, NJ, Princeton University Press, 2010, 172pp, hb, ISBN 9780691129945

Géraud Bablon.