The History of Economic Thought
Online ISSN : 1884-7358
Print ISSN : 1880-3164
ISSN-L : 1880-3164
Volume 48 , Issue 1
Showing 1-26 articles out of 26 articles from the selected issue
  • Michele Cangiani
    2006 Volume 48 Issue 1 Pages 1-15
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    Polanyi's wide-range comparative outlook consists in considering any given social system as the result of historical evolution and as a whole. The economy appears then as a process, specifically instituted within each social system. These methodological assumptions are in contrast with those of economics, to the extent that the latter embrace both individualism and ahistorical generalizations, i. e. a non-institutional characterisation of economic activity.
    The analysis of the “market system” as an “economically” instituted economy, and of the “market society” as a society in which the economic system becomes differentiated, autonomous and dominant, enables Polanyi to explain the “economistic fallacy” with reference to its real basis. Thus, the generalization of such categories as “rational choice” and “scarcity” reveals as fallacious, to the extent that it discards their institutional peculiarity; moreover, an authentically general, a “substantive” concept of “economy” is needed. Polanyi opposes it to the “formal” concept, and interprets, for instance, Carl Menger's long engagement in revising his Grundsätze as a tentative of distinguishing a more general meaning from the “economizing” meaning of “economic.”
    The article carries on Polanyi's suggestions about the motives and results of Menger's revision of his book of 1871. The problem of situating both Menger's work and Polanyi's interpretation within the history of economics is also dealt with, with particular reference to the inter-war theoretical and methodological opposition between institutional and conventional-neoclassical tendencies.
    Download PDF (2043K)
  • Shingo Takahashi
    2006 Volume 48 Issue 1 Pages 16-31
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    The purpose of this paper is to consider J. R. Commons's (1862-1945) institutional economics as “transaction economics.” The concept of transaction is at the core of his institutional theory, and it influenced the ideas in the new-institutional economics. Even though the concept of transaction has long been recognized as crucial to Commons's institutional theory, it has not been systematically studied until recently. Here I attempt to analyze Commons's institutional theory by considering it in terms of transaction, and transaction cost.
    First, in Section II, I scrutinize Commons's construction of transaction and in Section III its features. Transaction does not refer to “exchange, ” which implies a physical transfer; rather, it implies a legal transfer of ownership. This concept is characterized by three features of Commons's institutional economics: (1) the volitional aspect based on human action, (2) three types of transactions, determined by the legal relationship, and (3) transaction comprising a minimum of five members-two buyers, two sellers, and one arbitrator.
    Second, in Section IV, I offer a reinterpretation of Commons's institutional economics as transaction economics. Using the theoretical construct of transaction, I analyze at micro and macro levels the legal, economic, and ethical aspects of Commons's theory. Then in Section V, I compare transaction economics with transaction cost economics as propounded by O. E. Williamson, who drew on the work of Commons. The comparison reveals the fundamental differences between the two and the uniqueness of Commons's theory.
    Finally, I consider in Section VI the contemporary implications of transaction economics. I conclude that transaction economics is premised upon a unique system that differentiates it from transaction cost economics, and I argue that it provides an explanation for the legal, economic, and ethical relationships between the individual and society today.
    Download PDF (2361K)
  • Ken Kato
    2006 Volume 48 Issue 1 Pages 32-45
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    John Rogers Commons (1862-1945), one of the founders of American institutionalism, developed original ideas on economic democracy, collective bargaining, and a vision for “reasonable capitalism” in the economy of the changing American society of the first half of the 20th century. The purpose of this paper is to examine Commons's design for institutions able to function effectively not only amid the changing relationships between employer and employee, but also in the face of legal decisions made during the late 19th and early 20th century. To that end, I analyze specific issues that Commons highlighted in Industrial Goodwill (1919), namely, immigration, unemployment, loyalty, and insurance.
    I begin by considering Commons's point of view on unemployment and his ideas on how to relieve it and measures to prevent it. Here, I focus on why “goodwill” had such central importance in his thought.
    Then I examine Commons's observations on training for employment in industry offer ed to non-English-speaking immigrants, encouraging loyalty in industrial relations, and “social insurance, ” as provided in one establishment. In late 19th and early 20th century industry, such an environment was created by only a minority of employers who thought in terms of the development of American industry. Commons's aim was to expand the industrial goodwill that was nurtured by those few employers and made that environment possible.
    In conclusion, I argue that the problem Commons took up in Industrial Goodwill concerned the way “goodwill”-as Commons defined it-functioned and could function within the sphere of American industry.
    Download PDF (2100K)
  • Daisuke Nakai
    2006 Volume 48 Issue 1 Pages 46-62
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    While Henry Sidgwick may be best known as a moral philosopher and the author of The Methods of Ethics (1874), he made notable contributions spanning economics and other fields as well, one of them being The Principles of Political Economy (1883). Even now The Methods and its treatment of utilitarianism is recognized as an authoritative model for ethical theory, but his conclusion that there is a “dualism of practical reason” has generated a great deal of controversy. The relationship between these two works has not yet been fully analyzed in the scholarly and critical literature. In this paper I demonstrate that the structure of the argument in The Principles is closely related to The Methods.
    Sidgwick distinguishes economics as a Science (what is) from economics as an Art (what ought to be) based on two moral principles, egoism and utilitarianism, both explicated in The Methods. Sidgwick's Science/Art distinction is instantiated by his distinction between “economic man” and “ordinary man.” Economic man is an abstraction signifying economic behavior based on self-interest. In Sidgwick's argument, Science can employ the idea of economic man to objectively analyze a society where self-interested economic behavior is the norm. Ordinary man, on the other hand, is the ideal of economic behavior motivated by moral rules based on both self-interest and utilitarianism. Art defines those governmental activities desired in a society consisting of “ordinary men.”
    Self-interested economic activity does not necessarily achieve the preferred results. When it leads to monopoly, for example, it works to reduce social production. The dilemma of Sidgwick's “dualism of practical reason” is the generation of conflict between the outcome of economic man's behavior and the desired results of behavior by ordinary man. As I attempt to show here, in The Principles Sidgwick constructed a role for government that would resolve that problem. Furthermore, using the distinction between Science and Art, and introducing egoism and utilitarianism, Sidgwick tried to resuscitate the ideas of the classical school of political economy.
    Download PDF (2513K)
  • Ryo Hongo
    2006 Volume 48 Issue 1 Pages 63-77
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    The purpose of this paper is to reexamine the significance for wage policy and theory of The Theory of Unemployment (1933). A. C. Pigou (1877-1959) began to study unemployment problems before World War I. He often advocated “direct state action” to lessen unemployment by increasing government expenditure. After the war, however, increasingly he viewed direct action by government as something to be exercised selectively and with caution. According to Pigou, the causes of unemployment in the 1920s were to be found not in a shortage of aggregate labor demand but primarily in the high wage-rates of some industries.
    In other words, he shifted the approach to unemployment from the labor demand side to the labor supply side. That change in analytical starting point shows up clearly in Pigou's “Wage Policy and Unemployment” (1927). In that article he maintains, “If it is correct-if, that is to say, post-war wage policy is in fact responsible for adding some 5 per cent to the volume of unemployment which is normally brought about by other factors-the country is confronted with a problem of a type which pre-war economics never found itself called upon study.” Pigou's study of unemployment in relation to wage policies crystallized in 1933 into The Theory of Unemployment, in which his chief objective was to shed light on unemployment as an outcome of causative factors originating in the labor supply side.
    My main conclusions are three: (1) Pigou's theory of unemployment developed and changed through at least two stages; (2) In the late 1920s Pigou began to emphasize the importance of wage policy as a dominant cause of the unemployment at that time; and (3) The Theory of Unemployment contained some arguments similar to the natural unemployment-rate hypothesis, which was popular in the 1970s.
    Download PDF (2189K)
  • Norikazu Takami
    2006 Volume 48 Issue 1 Pages 78-92
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    In this paper I examine how Arthur C. Pigou (1877-1959) approached the problem of industrial relations in his Principles and Methods of Industrial Peace (1905) and other early writings. Pigou's discussion of the issue centered on the historical, theoretical, and normative dimensions. First, examining history, he argued that the labour movement in Britain first passed through three stages-violent, political, and economic-before it was possible to establish a peaceful system of negotiation between trade unions and employers' associations. Pigou attributed this achievement to strong and well-organized labour unions; realizing how costly it would be to continue fighting the trade unions, employers finally agreed to meet and talk with them. Second, Pigou's theoretical approach employed the theory of bilateral monopoly to identify a “settlement locus” and an “arbitration locus, ” which describe acceptable areas of bargaining between trade unions and employers' associations. Strong, well-organized unions, he concluded, were favorable to industrial peace. Third, Pigou's normative argument centered on the effects of trade unions on social welfare, as well as on industrial peace. He contended that strong unions pushed wages higher than the market rate, and so even though trade unions might function to promote industrial peace, they could also diminish social welfare. It was Pigou's belief that the negative effects of trade unions could be prevented by government policies; by artificially increasing the cost of conflict between trade unions and employers, government could create conditions to insure that industrial peace was compatible with maximization of social welfare. Too-forceful government intervention, however, would hinder employer-employee relations. Pigou therefore recommended moderate policies that could be used with flexibility. In conclusion, I discuss the basis for Pigou's belief that strong trade unions were necessary-rather than harmful-for industrial peace.
    Download PDF (2302K)
  • Yuichi Kimura
    2006 Volume 48 Issue 1 Pages 93-109
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    Now known primarily as a post-Keynesian Cambridge economist, Nicholas Kaldor (1908-1989) worked at the London School of Economics (LSE) in the 1930s, where he was part of the Robbins Circle and was influenced by the Austrian school of economics, especially F. A. von Hayek's theory of capital. In the aftermath of the Kaldor-Knight controversy in 1937-1938, however, Kaldor's disagreement with Hayek's theory of capital emerged in stinging criticism. The dispute between Kaldor and Hayek continued from 1939 to 1942. How and why did Kaldor criticize Hayek's theory of capital? There have been few attempts to critically study this question. The present paper analyzes the impact of Kaldor on Hayek's theory of capital in 1936-1942.
    My discussion is organized in six parts: Section II elaborates on Hayek vs. Knight, Hayek's trade cycle theories, and Kaldor's critique of Hayek. Section III examines Kaldor's views on Hayek's theory of capital between 1937 and 1938. Sections IV and V examine the Kaldor-Hayek controversy. The analysis in Section IV of Kaldor's “Capital Intensity and Trade Cycle” (1939) reveals that Kaldor's trade cycle theory is directly opposed to that proposed by Hayek in Prices and Production (1931). Section V analyzes Kaldor's “Professor Hayek and the Concertina Effect” (1942) and presents his critique on the Ricardo Effect by using two modified Uhr's Wicksell diagrams. Section VI is a comparative investigation of the theories on capital of Hayek and Kaldor. Finally, in Section VII I discuss my conclusions that (1) Kaldor was a creative critic; (2) Kaldor's criticism of Hayek's theory of capital effectively stymied the evolution of any capital theory for several decades; and (3) Kaldor made important contributions to the Cambridge controversies on capital theory.
    Download PDF (2393K)
  • Yoshihiro Yamazaki
    2006 Volume 48 Issue 1 Pages 110-123
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    Most historians of economics so far have regarded the history of macroeconomics as a process of rivalry among schools or paradigms. In the usual approach, they have attempted to describe it by establishing clear differences between one school and another. A commonly accepted view of history, therefore, is the story of the Keynesian revolution and the anti-Keynesian counter-revolution. We now understand, however, that this familiar approach cannot completely account for the heterogeneity in American Keynesian and the divergence in neoclassical macroeconomics.
    This paper proposes an alternative view of the history of macroeconomics. Keynes did not create the field of macroeconomic theory; he simply transformed the structural emphases of a field of study that had existed since before his arrival as an economist. Keynes overemphasized short-term fluctuations of economy or business cycles, and that accidental event in the history of the field had the effect of separating two viewpoints and macroeconomists swung heavily to one side.
    The apparently lost viewpoint of growth, however, was revived beneath the surface of the cycle view, gathering steam and then giving birth first to the neoclassical theory of growth and soon thereafter to the optimal growth theory. Following a period of ferment and confusion, what is called real-business cycle theory integrated the two viewpoints. Their reintegration was not simply a return to the old framework but was part of the serious process being undertaken by researchers endeavoring to build optimal dynamic models more completely.
    In the minds of macroeconomists, the conflict among schools is now a thing of the past. In this paper I argue that we historians of economics must also change our perspec tive as we describe our histories of macroeconomics. Our thinking should be oriented toward integration and fusion instead of divergence and alternation.
    Download PDF (2088K)
  • James M. Buchanan, Masazumi Wakatabe, Yong J. Yoon
    2006 Volume 48 Issue 1 Pages 124-138
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    Download PDF (1911K)
  • [in Japanese]
    2006 Volume 48 Issue 1 Pages 139-142
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    Download PDF (587K)
  • [in Japanese]
    2006 Volume 48 Issue 1 Pages 143
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    Download PDF (114K)
  • [in Japanese]
    2006 Volume 48 Issue 1 Pages 144-145
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    Download PDF (245K)
  • [in Japanese]
    2006 Volume 48 Issue 1 Pages 146-148
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    Download PDF (325K)
  • [in Japanese]
    2006 Volume 48 Issue 1 Pages 149-151
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    Download PDF (328K)
  • [in Japanese]
    2006 Volume 48 Issue 1 Pages 152-154
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    Download PDF (357K)
  • [in Japanese]
    2006 Volume 48 Issue 1 Pages 155-156
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    Download PDF (297K)
  • [in Japanese]
    2006 Volume 48 Issue 1 Pages 157-159
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    Download PDF (343K)
  • [in Japanese]
    2006 Volume 48 Issue 1 Pages 160-161
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    Download PDF (298K)
  • [in Japanese]
    2006 Volume 48 Issue 1 Pages 162-163
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    Download PDF (315K)
  • [in Japanese]
    2006 Volume 48 Issue 1 Pages 164-166
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    Download PDF (366K)
  • [in Japanese]
    2006 Volume 48 Issue 1 Pages 167-169
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    Download PDF (330K)
  • [in Japanese]
    2006 Volume 48 Issue 1 Pages 170-171
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    Download PDF (297K)
  • [in Japanese]
    2006 Volume 48 Issue 1 Pages 172-174
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    Download PDF (350K)
  • [in Japanese]
    2006 Volume 48 Issue 1 Pages 175-176
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    Download PDF (308K)
  • [in Japanese]
    2006 Volume 48 Issue 1 Pages 177-179
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    Download PDF (327K)
  • [in Japanese]
    2006 Volume 48 Issue 1 Pages 180-182
    Published: June 30, 2006
    Released: August 05, 2010
    JOURNALS FREE ACCESS
    Download PDF (309K)
feedback
Top