Review of Political Economy: An Introductory Text, by Edmund S. Phelps

1987 ◽  
Vol 1 (2) ◽  
pp. 179-182 ◽  
Author(s):  
Michael M Weinstein
Keyword(s):  
Political Economy ◽  
Transaction Costs ◽  
Imperfect Information ◽  
Price Elasticities ◽  
Modern Economic ◽  
Standard Deviations ◽  
Introductory Economics ◽  
Economic Thinking

Political Economy is a scintillating excursion into modern economic thinking. Not a stultified world of price elasticities of demand. Nor a world where transaction costs are zero and information is perfect. Rather, Phelps's world is a modernist (his word) vision of asymmetric and imperfect information, incentive compatibilities, and a host of other problems of coordination and reward that plague real economies. Phelps has laid down a challenge to which all of us who teach introductory economics must respond. His achievement is stunning. Yet, I predict you will not adopt this text. Unless your students are two standard deviations smarter than the ones I teach or you are three-standard deviations better at teaching than me, this text will not work well as primary text in your undergraduate course. Still you can bet that many of us will shamelessly steal its intellectual scaffold for our lectures.

“Capital” as the key to solving modern economic problems (Offline addition to the discussion on the revival of a special seminar on Karl Marx’s “Capital”)

2019 ◽  
pp. 142-150
Author(s):  
Alexandеr V. Buzgalin
Keyword(s):  
Political Economy ◽  
Educational Process ◽  
Capitalist System ◽  
Economic Problems ◽  
Modern Economy ◽  
Modern Economic ◽  
The Relationship

In the article prepared in connection with the discussion on the use of the Marxist political economy heritage and the revival of a special seminar on Marx’s “Capital”, the author shows the dialectic of the relationship between the content and the transformed forms of the modern capitalist system; the potential of “Capital” to understand the content of the modern economy, and the potential of economics to understand its forms. On this basis, the author shows which questions of our time are answered by Marxist methodology and theory, and which are not, and concludes that Marxist political economy has significant methodological potential to become an important component of the scientific and educational process in current conditions.

An early mainstream economist from Hungary: István Varga (1897–1962)

2003 ◽  
Vol 53 (2) ◽  
pp. 195-213 ◽  
Author(s):  
K. Majoros
Keyword(s):  
Austrian Economic ◽  
National Income ◽  
Anglo Saxon ◽  
Turbulent Times ◽  
The Usa ◽  
New Ideas ◽  
Modern Economic ◽  
The Uk ◽  
Economic Thinking ◽  
Lasting Influence

The study introduces a Hungarian economic thinker, István Varga*, whose valuable activity has remained unexplored up to now. He became an economic thinker during the 1920s, in a country that had not long before become independent of Austria. The role played by Austria in the modern economic thinking of that time was a form of competition with the thought adhered to by the UK and the USA. Hungarian economists mainly interpreted and commented on German and Austrian theories, reasons for this being that, for example, the majority of Hungarian economists had studied at German and Austrian universities, while at Hungarian universities principally German and Austrian economic theories were taught. István Varga was familiar not only with contemporary German economics but with the new ideas of Anglo-Saxon economics as well — and he introduced these ideas into Hungarian economic thinking. He lived and worked in turbulent times, and historians have only been able to appreciate his activity in a limited manner. The work of this excellent economist has all but been forgotten, although he was of international stature. After a brief summary of Varga’s profile the study will demonstrate the lasting influence he has had in four areas — namely, business cycle research and national income estimations, the 1946 Hungarian stabilisation program, corporate profit, and consumption economics — and will go on to summarise his most important achievements.

Defetishizing Free Time: From Akrasia to Profanation

2019 ◽  
Vol 29 (1) ◽  
pp. 159-188
Keyword(s):  
Leisure Time ◽  
Free Time ◽  
Economic Organization ◽  
Acting Out ◽  
Basic Income ◽  
Giorgio Agamben ◽  
Dominant Position ◽  
The Gift ◽  
Modern Economic ◽  
Economic Thinking

Images of free time are used today to give the impression that alienation from work is being alleviated. As a result, exploitation of the workers who are constantly occupied with “self-realization” becomes even more effective. Free time becomes a fetish — a means of productively engaging people’s energy through various scenarios in which they are (supposedly) enjoying their leisure time pursuits. Is it even possible to undo the fetishization of free time? And if so, how else might we conceptualize it? In seeking an answer to these questions the author continues the discussion of akrasia launched by Michail Maiatsky in his article “Liberation from Work, Unconditional Income and Foolish Will” (Logos, 2015, 25[3]) in which Maiatsky expressed a well-founded fear that a contemporary “post-Nietzschean” person might respond to the “gift of unconditional freedom” with an irrational desire to test the boundaries of that boon and end up as Dostoyevsky said “living by his own foolish will.” A hypothesis to address that fear argues that the intentions behind such an “akratic rebellion” are inherently rooted in the fetishistic logic that dominates both current perceptions of free time and also the debate about providing a basic income. The akratic reaction is a form of phantasmatic acting out of the painful suspicion that efforts to reach liberation could turn into another form of bondage. The roots of this bind can be found in the historically embedded form of economic organization, which is based on a sense of dire emergency. We owe this understanding of the “economic dispositive” to the work of Giorgio Agamben, but it is already discernible in Xenophon. We can find an indication of its dominant position in modern economic thinking in Nikolay Sieber’s (1844–1888) criticism of the postulates of the “subjective school” of economics. Because the economy acquires a sacred aspect within this dispositive, akrasia may be compared with a sacrilegious trespass of its boundaries. However, Agamben proposes that challenging any form of the solemn ceremonies of capitalism’s priesthood in a way that is not merely imaginary must necessarily be a kind of profanation.

Poverty and Prosperity: Political Economics in Eighteenth-Century Ireland

2020 ◽  
Vol 88 ◽  
pp. 73-96
Author(s):  
Marc A. Hight
Keyword(s):  
Political Economy ◽  
Eighteenth Century ◽  
Political Institutions ◽  
Full Employment ◽  
Well Being ◽  
Common Interest ◽  
Early Step ◽  
Political Situation ◽  
Irish People ◽  
Economic Thinking

AbstractI draw attention to a group of thinkers in Ireland in the first half of the eighteenth century that made significant contributions to the philosophy of political economy. Loosely organized around the Dublin Philosophical Society founded in 1731, these individuals employed a similar set of assumptions and shared a common interest in the well-being of the Irish people. I focus on Samuel Madden (1686-1765), Arthur Dobbs (1689-1765), and Thomas Prior (1680–1751) and argue for two main theses. First, these Irish thinkers shared a number of commonalities with the English mercantilist thinkers of the eighteenth century, and to the degree that they did, their proposals to aid Ireland and reduce poverty were largely doomed to failure. Second, these Irish thinkers also importantly diverged from typical eighteenth-century mercantilist thinking in several ways. These modifications to mercantilism resulted in large part from the unusual political situation of Ireland (as a nation politically dependent on England) and helped orient their economic thinking along more institutional lines. In particular, the emphasis of the Irish on full employment and on the modification of social as well as political institutions is an early step forward in making political economy more sophisticated.

scholarly journals Information Asymmetry and Trust: A Framework for Studying Microfinance in India

2005 ◽  
Vol 30 (4) ◽  
pp. 77-86 ◽  
Author(s):  
M S Sriram
Keyword(s):  
Social Networks ◽  
Transaction Costs ◽  
Rural Areas ◽  
Financial Services ◽  
Imperfect Information ◽  
Informal Networks ◽  
The Poor ◽  
The People ◽  
Financial Transactions

In recent times, microfinance has emerged as a major innovation in the rural financial marketplace. Microfinance largely addresses the issue of access to financial services. In trying to understand the innovation of microfinance and how it has proved to be effective, the author looks at certain design features of microfinance. He first starts by identifying the need for financial service institutions which is basically to bridge the gap between the need for financial services across time, geographies, and risk profiles. In providing services that bridge this gap, formal institutions have limited access to authentic information both in terms of transaction history and expected behaviour and, therefore, resort to seeking excessive information thereby adding to the transaction costs. The innovation in microfinance has been largely to bridge this gap through a series of trustbased surrogates that take the transaction-related risks to the people who have the information — the community through measures of social collateral. In this paper, the author attempts to examine the trajectory of institutional intermediation in the rural areas, particularly with the poor and how it has evolved over a period of time. It identifies a systematic breach of trust as one of the major problems with the institutional interventions in the area of providing financial services to the poor and argues that microfinance uses trust as an effective mechanism to address one of the issues of imperfect information in financial transactions. The paper also distinguishes between the different models of microfinance and identifies which of these models use trust in a positivist frame and as a coercive mechanism. The specific objectives of the paper are to: Superimpose the role of trust in various types of exchanges and see how it impacts the effectiveness of repeated transactions. While greater access to information fosters trust and thus helps social networks to reduce transaction costs, there could be limits to which exchanges could solely depend on networks and trust. Look at the frontiers where mutual trust cannot work as a surrogate for lower appraisal costs. Use an example in the Canadian context and see how an entity that started on the basis of social networks and trust had to morph into using the techniques used by other formal nonneighbourhood institutions as it grew in size and went beyond a threshold. Using the Canadian example, the author argues that as the transactions get sophisticated, it is possible to achieve what informal networks have achieved through the creative use of information technology. While we find that the role of trust both in the positivist and the coercive frame does provide some interesting insights into how exchanges with the poor could be managed, there still could be breaches in the assumptions. This paper identifies the conditions under which the breaches could possibly happen and also speculates on the effect of such breaches.

From Silos to Barns? Regional Institutions in International Political Economy

2021 ◽  
Author(s):  
Etel Solingen
Keyword(s):  
Political Economy ◽  
Critical Theory ◽  
Transaction Costs ◽  
Political Science ◽  
Economic Efficiency ◽  
International Political Economy ◽  
Regional Economic ◽  
Regional Institutions ◽  
Ongoing Work ◽  
The Common

The explosion of research on regional economic institutions (REI) over the last two decades has led to a richer understanding of why they emerge, what form they take, and what effects they have. This chapter argues that research on REI is not a monopoly of any particular theoretical, methodological, or epistemological approach. Ongoing work leans not merely on standard political science and economics but on sociology, psychology, and critical theory. Yet, REI studies cluster in silos more often than barns, although this chapter highlights some research programs with potential for fostering barns. Exclusive attention to power, economic efficiency, transaction costs, and transnational normative diffusion—the common analytical currency in standard accounts of REI—may conceal deeper domestic drivers underlying REI dynamics.

The origins of money and its role in modernity

2021 ◽  
Author(s):  
Todd Oakley
Keyword(s):  
Gift Giving ◽  
Semiotic System ◽  
Socially Constructed ◽  
Symbolic Resources ◽  
The Social ◽  
Modern Economic ◽  
Political Foundations ◽  
Symbolic Processes ◽  
Economic Thinking

Money is a human creation arising from organic, technological, and symbolic resources. The complexity of its operations makes it difficult to comprehend. The origins of money can be dated with some accuracy, but the social and symbolic processes that led to this world-changing invention are poorly understood. One of the most persistent misunderstandings that adversely affects modern economic thinking is that money emerged from barter. As will be discussed, the origins of money have more fundamental symbolic, social, and political foundations in statecraft, warfare, religion, and gift-giving. Moreover, money develops among beings capable of considerable flexibility in combining or “blending” ideas from diverse, sometimes incommensurate, domains of knowledge and experience, and specifically among a species for whom institutions—socially constructed habits of thought and action—are ontologically criterial. This chapter aims to provide a foundation for thinking about money as an institutional semiotic system. Topics covered include money and barter; sovereign money; money and gift-giving; money and violence; the money/language analogy; and international monetary exchanges.

How A Social Enterprise Wanes: The Transaction Costs of Credible Commitments at Etsy.com

2021 ◽  
pp. 026010792110382
Author(s):  
Alejandro Agafonow ◽  
Marybel Perez
Keyword(s):  
Political Economy ◽  
Transaction Costs ◽  
Transaction Cost ◽  
Social Enterprise ◽  
Economic Transition ◽  
Transaction Cost Economics ◽  
Credible Commitments ◽  
Social Mission ◽  
Corporate World ◽  
Online Marketplace

This article fathoms how a social enterprise wanes by applying the construct of imperative credible commitments from transaction cost economics to the case of Etsy.com, an online marketplace created to connect artisans and craftwork enthusiasts. In the absence of imperative credible commitments, Etsy’s social mission was bound to change, leaving the company’s major stakeholders without safeguards to protect the perpetuation of the transactions that Etsy was created to serve. The construct of credible commitments has proved to be fertile in understanding issues of political and economic transition, yet its relevance to puzzle out the corporate world has been underestimated. To bridge this gap, we have recourse to the analogy between disabling the discretion of monarchs and executives to prevent them from reneging on commitments. Hence, by building on political economy academics’ attention is drawn to strategies that, despite existing in the corporate world, have rarely been perceived as important by management and economics scholars.

Digital Economy and Knowledge Economics

2012 ◽  
pp. 1-14
Author(s):  
Bhekuzulu Khumalo
Keyword(s):  
Competitive Advantage ◽  
Comparative Advantage ◽  
Wave Theory ◽  
Paper Briefly ◽  
Michael Porter ◽  
True Meaning ◽  
Modern Economic ◽  
Economic Thinking ◽  
Over Time

The digitization of information has been one of the greatest stories of the last two decades. This paper seeks to explain the meaning of this process and how it affects already established models concerning trade and knowledge economics. This paper is based on the simple premise that knowledge is the most important resource, without which nothing can be done. The paper starts by looking at the competitive advantage theory that was largely promoted by Michael Porter whose works have greatly influenced the first part of this paper. The paper then discusses the ever more important role of knowledge due to competitive advantage theory and the digitalization of information. Finally the implications and discrediting the comparative advantage theory, this theory has no place in modern economic thinking. As we have more tools in our disposal, we must investigate the importance of wave theory as well as the true meaning of competition. It also looks into the greater role collaboration will play in the future. The paper briefly discusses the effects that the digitization of information will have over time.

Political Economy of Financial Development: Canada and the United States in the Mirror of the Other, 1790–1840

2006 ◽  
Vol 7 (4) ◽  
pp. 653-665
Author(s):  
Richard Sylla
Keyword(s):  
United States ◽  
Political Economy ◽  
Financial Development ◽  
The United States ◽  
Business History ◽  
The Political ◽  
British North America ◽  
Modern Economic Growth ◽  
Modern Economic ◽  
Political Conditions

A meeting of the Business History Conference in Toronto with “The Political Economy of Enterprise” as its theme provides an opportunity to consider some historical similarities and differences between the climates of enterprise in Canada and the United States. Because much of my recent work has been on financial development in the United States in the early decades, 1790–1840, I shall focus on that period. During that period, finance, enterprise, and economic development in the United States made great strides. Across the border in British North America, progress in all three areas was limited. The contrast sheds some light on the political conditions that favor financial development, flourishing enterprise, and modern economic growth.

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