Journal des Economistes et des Etudes Humaines

Review of Robust Political Economy: Classical Liberalism and the Future of Public Policy

Bruce Caldwell — Wed, 30 Nov 2011 09:26:18 PST

“He Who is Unfit to Serve his Fellow Citizens Wants to Rule Them”—the Political Dimensions of Mises’ Theory of Bureaucracy

Laurent Carnis — Wed, 27 Apr 2011 00:25:36 PDT

An important literature exists on bureaucracy. It deals with economic and political consequences. Many scholars analysed these particular organizations and different schools of thought provided their own interpretation of bureaucratic phenomena. Mises’ theory of bureaucracy is known as being an important contribution from the Austrian economics school. However, the political dimension of his works on bureaucracy is less known. This article proposes an analysis of such a dimension.

Are Regulators Rational?

Slavisa Tasic — Wed, 27 Apr 2011 00:25:34 PDT

Thus far, psychological input has been used in economics mainly to highlight the cognitive imperfections of market participants. The normative implication of behavioral economics in its current state is that imperfections of market participants should be rectified by psychologically informed regulators. However, regulators are themselves imperfect actors with limited cognitive capacities. I propose some biases and illusions documented by cognitive psychologists that may be relevant to the political economy of government regulation.

Hobbes, Rawls, Nussbaum, Buchanan, and All Seven of the Virtues

Deirdre N. McCloskey — Wed, 27 Apr 2011 00:25:31 PDT

Virtue ethics proposes a set of seven—four pagan virtues and three Christian—as a roughly adequate philosophical psychology. Hobbes tried to get along with one virtue, prudence, to which Rawls added a veiled virtue of justice. Nussbaum’s Frontiers of Justice adds the virtue of love. But in criticizing Rawls, she enunciates a “Nussbaum Lemma,” that is, a good society is unlikely to arise from over-simple models of ethical life. Since virtuous, flourishing societies are what we wish, we had better insert the virtues, as she puts it, “from the start.” James Buchanan's constitutionalism, for example, solves moral hazards in a Nussbaumian world, but leaves hanging the ethical start. To start a project ending in constitutional citizenship—or human capabilities, or justice as fairness, or a Leviathan state, or the categorical imperative, or the greatest happiness of the greatest number—we need already an ethical actor, embodying the seven principal virtues.

Division of Labour in some Classical Concepts—An Attempt of Contemporary Theoretical Synthesis

Kresimir Perackovic — Wed, 27 Apr 2011 00:25:27 PDT

This paper analyzes classical concepts of division of labour and offers some contemporary theoretical model which includes causes and effects of it. For Smith, the main cause is a tendency of human nature to exchange and the main effect is a progress of the country. For Marx, the fundamental cause is historical development of productive forces and effects are accumulation of capital on the one side but also an alienation of working class on the other. Spencer considers as the main cause specialization of functions in generally, which consequence is integration of society. For Durkheim, causes are social density and volume, and its effect or function is new interconnection in society known as term organic solidarity. Weber derives division of labour from his theory of rational economic actions, and its most important effect is development of occupational structure.

The Birth of Modern Economic Science (Reading Gilles Campagnolo’s Book)

Nikolay Nenovsky — Wed, 06 Oct 2010 09:23:33 PDT

The '70s of the 19^th century have always held a special attraction point for specialists in the history of thought. For economic theory, these are the years of the Great Crossroads when economic theory was at critical breaking point, after which several powerful theoretical streams emerged that were to determine later on the overall course of the evolution of economics. The book written by the French economist and philosopher Gilles Campagnolo (Criticisms of Political Economy, Menger, Austrian School of Economics and the German Historical School, Routledge, New York, 2009, pp. 416) is an attempt to find out exactly what happened in the years of the Great Crossroads. It offers not only historical reading, but also theoretical interpretation to explaining the evolution, mutual influence and intermingling of the above individual schools of thought in the economic science. The present paper is a review essay on Campagnolo’s new book.

Richard Whately: Aux Origines de la Catallaxie

Jean-Yves Naudet — Wed, 06 Oct 2010 09:23:31 PDT

Le terme de catallaxie a été forgé par F. Hayek pour exprimer l’ordre spontané du marché. Hayek a créé ce terme à partir du mot catallactique, ressorti peu avant de l’oubli par L. Mises, mot venu du verbe grec signifiant « échanger », pour éviter les ambigüités du mot « économie ». Ce papier a pour objet de rechercher la généalogie du terme « catallactique », depuis Richard Whately, qui a été le premier auteur, en 1831, à vouloir rebaptiser « l’économie politique » en « catallactique ». Ce terme était connu et utilisé tout au long du XIX° siècle et on le trouve encore au début du XX° siècle dans divers manuels. L’utilisation de ce terme par Mises, puis Hayek, est donc la reprise d’une tradition remontant à Richard Whately. C’est l’occasion aussi de se pencher sur la vie de Richard Whately, professeur d’économie politique à Oxford jusqu’en 1831, puis archevêque anglican de Dublin. Il a notamment joué un grand rôle dans l’enseignement de cette discipline, en créant 4 000 cours d’économie politique. Un personnage intéressant, un peu trop ignoré aujourd’hui, qui a joué un rôle non négligeable dans la pensée économique.

Firm as a Nexus of Markets

Ivan Jankovic — Mon, 04 Oct 2010 07:19:25 PDT

The Austrian School's conventional theory of the firm is based on an attempt to synthesize Coase's concept of the firm as a centrally planned hierarchy with the Austrian theory of entrepreneurship and monetary calculation. This paper is a critique of that program as well as an attempt to outline the alternative theory of the firm, one based on the synthesis of the contractual agency theory of the firm (Alchian-Demsetz, Jensen-Meckling) with the same Austrian arguments about entrepreneurship and calculation. The firm in this paper is defined as a nexus of various markets for goods as well as for labor and managerial services rather than as a hierarchy or “organization.” Both the neoclassical and Austrian critiques of the latter concept are utilized to prove that a clear distinction between the market and the firm cannot be established. That distinction is based on the misunderstanding of the firm's dynamics as exclusively tied to the managing/transaction costs ratio as well as on the mischaracterization of inter-firm relations as commanding ones (Demsetz-Alchian, Jensen, Meckling, Fama, Cheung). On the other hand, the central planning view of the firm is equally at odds with the key Mises's argument that rational economic planning is impossible in the absence of market prices (Mises, 1990). If this is so, the firm, as understood in a Coasian paradigm, would not have any reason to exist, or any reason to contribute positively to economic efficiency, because it would simply represent a centrally planned “island of incalculability” in a wider market setting (Rothbard, 2004). Since the firm is a nexus of various markets, its operation is contrary to the Coaseian assumptions led by the price signals. Only insofar as the internal firm's operation is driven by the price signals can the firm be efficient.

Economic Freedom and Beauty Pageant Success in the World

Robert Lawson et al. — Mon, 04 Oct 2010 07:19:24 PDT

Beauty pageants are ubiquitous around the world, and their importance in many cultures is indisputable. This paper empirically examines those factors that contribute to beauty pageant success in a cross-national setting. Our analysis pays particular attention to the role of market liberalism, i.e., economic freedom, in the process. The results indicate that nations with higher economic freedom scores are underrepresented among Miss Universe semifinalists after controlling for other relevant determinants.

Economic Freedom and Government: A Conceptual Framework

Judit Kapas et al. — Mon, 04 Oct 2010 07:19:22 PDT

The aim of this paper is to contribute to the development of a theory of economic freedom. In this endeavor, we build our framework on the Hayekian notion of freedom (Hayek, 1960) because it explicitly embodies the obvious link between freedom and the state: freedom is an absence of state coercion except for that which enforces abstract, general rules known beforehand. We derive two propositions from this Hayekian thesis and elaborate on them, leading to a categorization of government actions from the viewpoint of economic freedom in which the criterion against which coercive governmental actions must be evaluated is the rule of law, meaning a government’s reliance on general, abstract rules. As an implication, our framework allows us to argue for the imperative differentiation between “efficiency” and “economic freedom” as two separate criteria against which government actions can and must be evaluated. We also show that our framework may help explain the process through which economic freedom enhances growth.

Les challenges d'Hayek méritent d'être relevés

Pierre Garello — Thu, 03 Dec 2009 10:48:40 PST

La science économique semble en quête d'un nouveau paradigme. Si de nouvelles pistes sont explorées, qui font souvent appel à des coopérations interdisciplinaires, une vision globale de ce qui pourrait constituer une compréhension économique satisfaisante des phénomènes sociaux fait toujours défaut. Dans cette note nous expliquons en quoi Hayek peut ici être utile. Il a, à notre avis de façon convaincante, identifié certains des éléments clés autour desquels un nouveau programme de recherche peut être construit. Parmi ces éléments nous trouvons : la nature et les effets de la complexité dans les phénomènes sociaux, la distinction entre ordres spontanés et ordres créés, le fait que ces ordres ont recours à des règles de natures différentes, la nécessité de trouver un critère normatif pertinent pour les règles gouvernants les ordres spontanés (ouvert), ou encore la nécessité de repenser la formation de l'économiste.

Today economics is a house to a great diversity of competing paradigms. If new routes are presently explored inviting economists to cooperate with scholars from various disciplines, a general vision of what could be meant by an economic understanding of social phenomena is still lacking. In this note it is argued that Hayek can be helpful in that respect. He has identified key elements which could guide our inquiry. This includes: a reflection on the complexity of social phenomena and on what distinguishes spontaneous orders from organizations; recognition of the fact that spontaneous orders and organizations rely on different types of rules, a need for a new normative criteria to evaluate the quality of a rule, and, finally, a reflection on what would constitute sound economic education.

Money and Contract in The Merchant of Venice

Carlos Rodriguez Braun — Thu, 03 Dec 2009 10:48:38 PST

The fortunes and misfortunes of Shylock and Antonio are pervaded with economic and legal ideas. Both characters tend to overlap and confuse in several dimensions–the most celebrated one is to believe that the Jew is the merchant–and are alternatively victim and victimizer. The analysis of the play focusing in money and contract, economics and the law, market and morality, allows us to delve into the nuances of one of the most engaging characters in the history of literature and to ponder the classical liberal message of justice and charity.

The Role of Empirical Assumptions in Economic Analysis: On Facts and Counterfactuals in Economic Law

Edward P. Stringham et al. — Thu, 03 Dec 2009 10:48:37 PST

How much of economic theory can be derived using pure logic and how much of it depends on empirical facts? In a provocative article, Hülsmann (2003) criticizes Mises and Rothbard for relying on empirical assumptions, ceteris paribus claims, and thought experiments in their analysis. Instead, Hülsmann proposes a counterfactual method that does not rely on any empirical assumptions and is said to produce universally valid claims. Upon inspection we find that many of his proposed laws are either inexact, incorrect, or must rely on subsidiary assumptions to be true. We conclude that the traditional approach of Mises and Rothbard appears to be more fruitful and true.

Retreat from Liberalism: Human Capabilities and Public Reasoning

Douglas B. Rasmussen et al. — Thu, 03 Dec 2009 10:48:34 PST

Central to Amartya Sen's understanding and defense of political orders that promote equality is his appeal to human capabilities. However, he fails to provide a basis for their selection, weighting, and value. Moreover, the account of ethical reasoning (“public reasoning") by which he does attempt to respond to basic challenges is highly problematic. It not only conflicts with a view of human flourishing that is individualized, agent-relative, and self-directed but also offers neither justification for nor principled limitation of state imposed solutions.

Recent Publications

Tue, 03 Nov 2009 09:28:35 PST

Is There a Tulip in Your Future?: Ruminations on Tulip Mania

Christian C. Day — Tue, 03 Nov 2009 09:28:34 PST

This essay emphasizes and explicates factors and forces that led to the creation of the Tulip futures market (increased globalization, a rising prosperity of middle class, etc.). It considers whether critics of that market were correct about Tulip Mania. The introductory section describes briefly the Dutch economy and states the thesis that the Dutch developed an innovative futures market. The principal section describes the forces and factors at work in the Tulip futures market. The concluding normative section assesses the bases for criticism and approves of the workings of the market.

Cet article met en avant et explique les facteurs et les forces qui ont conduit à la création d’un marché de futures de la Tulipe (globalisation amplifiée, augmentation du niveau de vie des classes moyennes; etc.). Il examine si les analyses de ce marché étaient correctes concernant la Tulipe Mania. La section introductive décrit brièvement l’économie hollandaise et explique que les Hollandais ont développé un marché de futures innovant. La section principale décrit les forces et les facteurs qui opèrent sur le marché financier des Tulipes. La section normative de conclusion évalue les fondements des critiques et défend le fonctionnement du marché.

The Price is Wrong: Causes and Consequences of Ethical Restraint of Trade

Thomas C. Leonard — Tue, 03 Nov 2009 09:28:33 PST

Critics of commodification object to sales but not gifts of some goods, such as human blood or human organs, on grounds that such trade wrongly coerces, morally corrupts, and crowds out altruism. This essay takes issues with each of these claims. It disputes Micheal Sandel’s claim that voluntary exchange coerces, arguing that he confuses what is unfair with what is unfree. It argues, where trade does create moral costs, that these costs should be weighed against the moral costs of trade bans, such as the loss of human life, and the harms endemic to illegal markets. The essay also quarrels with Richard Titmuss’s The Gift Relationship, arguing that compensation for blood need not crowd out blood donation, that compensation does not preclude a charitable impulse, and that some important gift relationship (e.g., philanthropy) posses elements of altruism and exchange.

Ceux qui critiquent la marchandisation sont contre la vente mais pas contre le don de certains biens comme le sang ou les organes humains parce qu’un tel commerce exercerait une contrainte, corromprait morallement, et ne laisserait pas de place à l’altruisme. Ce papier traite de chacune de ces affirmations. Il consteste l’affirmation de Micheal Sandel selon laquelle l’échange volontaire exerce une contrainte, en suggérant qu’il confond ce qui injuste avec ce qui n’est pas libre. Si le commerce entraîne des coûts moraux, cet essai suggère que ces coûts devraient être comparés avec les coûts moraux associés aux interdictions de commerce tels que la perte de la vie humaine et ceux associés aux maux endémiques des marchés illégaux. Il critique aussi l’ouvrage de Richard Titmuss, “The Gift Relationship” en suggérant que les compensations monétaires en échange d’un don de sang n’évincent pas nécessairement le don de sang, qu’elles n’empêchent pas les impulsions charitables, et que d’importants actes de don (ex: philantropie) comportent des éléments d’altruisme et d’échange.

The Equilibrium Image of the Market

Bruna Ingrao — Tue, 03 Nov 2009 09:28:31 PST

The paper focuses on conceptual images of the market built on the core idea of equilibrium. It argues that logical difficulties and dead ends were encountered in building equilibrium models of the market. A heavy toll was paid in loss of realism, failure to understand history, and ineptitude in addressing relevant problems. Equilibrium economics is marked by the exclusion of a wide range of economic phenomena, with a codified lack of attention to change, transition and learning. The loss of relevance involved was a consequence of the primitive idea of conceiving of the market within the semantic field of equilibrium. The most evident failure of the equilibrium imagery was in understanding economic development as a process of social and structural change in history. The paper argues that is time to free economic theory from the obsessive centrality of the equilibrium idea. Attention should shift to the market economy as a complex network of rules, organizations and institutions, which make viable economic change. This approach invites scholars in economics to a fruitful dialogue with other fields of knowledge, to understand both crises and successes in processes of economic change.

L’article traite des images conceptuelles du marché construites à partir de l’idée d’équilibre. Il est suggéré que la construction des modèles d’équilibre du marché a souffert de difficultés logiques et a aboutit à des impasses. Il en a résulté une perte de réalisme, et une incapacité à comprendre l’histoire et à aborder les questions pertinentes. L’économie de l’équilibre est caractérisée par l’exclusion d’un grand nombre de phénomènes économiques mais aussi par un manque d’attention au changement, à la transition, et à l’apprentissage. Le manque de pertinence qui en découle est le résultat de l’idée primitive de concevoir le marché dans le champ sémantique de l’équilibre. L’échec le plus évident de l’image d’équilibre réside dans la compréhension du développement économique comme un processus du changement social et structurel au cours de l’histoire. L’article suggère qu’il est temps de libérer la théorie économique de cette idée obsessionnelle d’équilibre. Il faut plutôt concevoir le marché comme un réseau complexe de règles, d’organisations et d’institutions qui rendent le changement économique viable. Cette approche invite l’économie à un dialogue fructueux avec les autres domaines de la connaissance pour comprendre à la fois les crises et les réussites des processus de changement économique.

The Ordering of Change: Polanyi, Schumpeter and the Nature of The Market Mechanism

Mark Harvey et al. — Tue, 03 Nov 2009 09:28:29 PST

This paper brings about a conversation between Schumpeterian and Polanyian perspectives on markets and their central role in the capitalist economy. For Schumpeter, markets were critical to the process of selftransformation of economic activity, but in his vision, markets as such were largely taken for granted. Markets enabled the introduction of new processes and products equally as well as rendering economic activities obsolete, with the entrepreneur and firm as agents of change, generating new combinations of activities and driven by the creative power of knowledge. Innovation and markets are jointly the engines of endogenous growth. For Karl Polanyi, by contrast, although markets were the central feature of the capitalist economy from the beginning of the nineteenth century, his main interest is the constant impulse for markets as institutions to expand into every aspect of social life and the countermovement of regulation to restrain what he sees as their essentially destructive nature. His focus is therefore on markets as instituted economic processes, driven by the double movement of regulation (order) and de-regulation (disorder). He scarcely considers innovation in production or consumption, concentrating on institutions of exchange and distribution. The paper explores the two perspectives in order to ask the question that their confrontation raises: What is the relation between intra-market endogenous change and marketframework institutional change? To test out each perspective, a schematic “long-duration” empirical account of the United Kingdom food distribution markets is subjected to a Schumpeterian and Polanyian reading, and each is exposed for complementary deficits. A broader explanatory framework is sketched that proposes analysis of innovation in market institutions--especially processes exchange and distribution-- in combination with innovation in production and consumption. It is suggested that to explore the constant change of capitalist economies, these four economic domains each involve different orders of innovation and transformation that have complex feedbacks and interactions with each other. Rather than according primacy to one or other order of change (as did Schumpeter and Polanyi in their respective ways), we require a complex causal account embracing multiple instituted economic processes.

Cet article discute de la vision des marchés et de leur rôle central dans l’économie capitaliste selon Schumpeter et Polanyi. Pour Schumpeter, les marchés sont essentiels au processus d’auto transformation de l’activité économique, mais dans son approche il présuppose l’existence des marchés . Les marchés permettent l’introduction de nouveaux processus et produits et rendent en même temps les activités économiques obsolètes. Les marchés, avec l’entrepreneur et la firme comme agents du changement, créent de nouvelles combinaisons d’activités et sont dynamisés par le pouvoir créatif de la connaissance. L’innovation et les marchés sont conjointement les moteurs de la croissance endogène. Chez Karl Polanyi, en revanche, bien que les marchés soient un élément central de l’économie capitaliste dès le début du 19ème siècle, l’attention se porte sur le mouvement permament des marchés-institutions à s’étendre à tous les domaines de la vie sociale ainsi que sur le contre-mouvement de la régulation à limiter ce que Polanyi considère comme la nature destructrice des marchés. Son interêt se porte ainsi aux marchés comme des processus économiques établis, conduits par un double mouvement de régulation (ordre) et de dérégulation (désordre). Il ne considère que rarement l’innovation de production ou de consommation, et se concentre sur les institutions de l’échange et de la distribution.

L’article explore les deux visions afin de sinterroger sur ce que la confrontation des approches soulève comme question: Quelle est la relation entre les changements endogènes intra marché et les changements institutionnels de la structure de marché? Pour tester chacune des visions, un compte-rendu empirique sur longue période de la distribution alimentaire au Royaume-Uni est soumis à une lecture Schumpeterienne et Polanyienne.Un cadre explicatif plus large est esquissé et suggère une analyse de l’innovation des institutions de marché - particulièrement des processus d’échange et de distribution - conjointement à l’innovation de production et de consommation. Il est suggéré que pour analyser le changement permanent des économies capitalistes, il faut considérer les ordres d’innovation et de transformation de ces quatres domaines économiques qui connaissent des “effets de retour” ainsi des interactions. Au lieu d’accorder la primauté à un des ordres de changement (ce que Schumpeter et Polanyi ont fait), il est nécessaire de rendre compte d’une causalité complexe qui prend en compte des processus économiques multiples.

The Many Faces of the Market

Peter J. Boettke et al. — Tue, 03 Nov 2009 09:28:27 PST

While markets are all around us, not all markets are the same. Markets come in a variety of colors based on the legality of activities in the specific market. As such, there is no market economy per se, but instead various shades of markets. The different shades of markets that are evidenced in practice directly depend on the institutional environment that makes certain activities legal or illegal. Shifts in the institutional environment are a result of entrepreneurial activity over the rules of the game. The rules of the game and resulting shade of the market in turn impact entrepreneurs acting within those rules and hence economic development or the lack thereof.

L’économie de marché est en réalité une économie des marchés. La variété des marchés s’explique par la légalité des activités sur chacun d’entre eux. Ainsi il n’existe pas une économie de marché en soi, mais plutôt plusieurs formes de marché. Ces formes manifestes de marché sont fonction de l’environnement institutionnel qui rend certaines activités légales ou illégales. Les changements de l’environnement institutionnel sont le résultat de l’activité entrepreneuriale en dehors des règles du jeu. Les règles du jeu ainsi que la forme du marché qui leur est associée influencent à leur tour les actions entrepreneuriales et donc le développement économique.