In order to reconstruct the economic theory, we should develop our study on the basis of existing achievements with an intentionally refreshed methodological approach. We have developed "the institutional analysis of socio-economic systems" which integrates the regulation theory, the Post-Keynesian theory and the Radical Economics theory. We have also developed collaborative researches with the various economics of institutions and evolution, and have published books such as the Japanese version of S. Bowles's Microeconomics: Behavior, Institutions and Evolution as well as R. Boyer, H. Uemura, and A. Isogai (eds.) Diversity and Transformations of Asian Capitalisms. The aim of this paper is to investigate how we can reconstruct the economic theory, surveying and assessing the results of our collaborative researches from the theoretical point of view. We especially focus on following points. First, the methodology of this theoretical investigation is proposed, while referring to E. Sugimoto'concept of "modern economics" to emphasize the importance of productive academic discussion. Furthermore, it is pointed out that productive discussions have not been promoted due to the dominance of "the Neo-Classical paradigm". Second, after investigating the basic assumptions of the Neo-Classical paradigm, the academic significance and intrinsic theoretical problems of Marx and Keynes are considered, and it is shown how the Post-Marxian and the Post-Keynesian have tried to overcome their problems. Third, based on the recent development of the economics of institutions and evolution, we show our own research agendas on following subjects: mutually determining relations between institutions/macro processes and the behaviors of agents, meso-level coordinating mechanisms, relationships between the financial system and wage-labor nexus, the institutional varieties of capitalism. Fourth, the recent studies of price and wage determination, the financial system and international trade in contemporary capitalism are assessed thoroughly, and the new achievements of researches by the regulation theory and the contemporary Classical trade theory are studied to reconstruct the economic theory.

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The present paper shows, by using different models of scientific research and methodology, that economics and economy coevolve because there exists a bidirectional causal relation between them, and that Keynes, Hayek and Marx all knew its unique implications for economic policy of the government and economic thought of the public even in different views. We focus on Marx's historical materialism (HM) and his model for coevolution of economics and economy that comprises HM as pre-theory, and advocate the necessity of transforming HM into historical knowledgism (HK) in the 21st century of post-industrial society. Finally we present the framework of evolutionary economics in view of HK and explain its implication for theory and policy.

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The recent developments in contemporary mainstream economics have focused on the study of the incentive structure of organization and institution by applying the non-cooperative game theory, behavioral economics, and experimental economics. This trend also implies that the issue of the neoclassical general equilibrium theory (GET) has been marginalized within the contemporary economics, which also indicates that mainstream economists have lost their interest in the issue of how the basic theory of the capitalist economic system should be established. A typical thought among the mainstream economists is that the neoclassical GET has been a dead topic since most of the essential research questions have been solved. In this essay, I argue that the recent situation that the neoclassical GET is not a fancy research topic does not necessarily connote that the basic theory of capitalist economic system is fixed by the GET. Rather, the current GET remains a lot of interesting and vital research questions which are indispensable for providing a more comprehensive ground theory on the capitalist economic system. For instance, the so-called Cambridge controversy of capital theory will remind us of the perfect competitive market in the capitalist economy as inevitably involving the power relation between the capitalist class and the working class. I suggest a Marxian extension of dynamic general equilibrium theory would give us a useful basic framework to develop a more comprehensive ground theory of the capitalist economic system. In such a framework, the power relation between the capitalist class and the working class would be addressed.

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This paper aims to explain the Crisis of Eurozone in terms of instituional failures, by focusing on the Treaty on Stability, Coordination and Governance (TSCG), signed on March 2nd 2012 by the member states of the Eurozone. After Maastricht and Lisbon, it marks the beginning of a third chapter in the history of the euro. This new Treaty has brought about major changes in the functionning of the Eurozone, by imposing the balanced budget rule, that is unique to the Eurozone, including a structural deficit not exceeding 0.5% of GDP, a rule limiting public debt to 60% of GDP, an automatic correction mechanism, etc. Instead of making up for the failure of coordination between states that has been so outstandingly apparent throughout the crisis, by setting up mechanisms of consultation and deliberation in bodies endowed with real decision-making powers, the new Treaty, in terms of coordination, has established (or strengthened)automatic mechanisms for restoring budget balance. Consequently, instead of helping to "repair" the institutional failures on which the Eurozone is built, the Treaty strengthens them and further weakens the construction, without real economic coordination, common budget or active policy of transfers to contribute to the convergence of the countries and regions within the zone. All in all, the TSCG, far from rethinking an institutional architecture that has proved to be a failure, in order finally to provide the Eurozone with suitable foundations, appears above all as an attempt to "toughen up" the mechanisms and standards whose immense failings have been revealed by the financial crisis, without modifying either their nature or their spirit. We thus believe that this goes a long way to explaining the current difficulties of the Eurozone and the inability of most member states to extricate themselves from the crisis. If the Eurozone is to survive, other institutional devices than those currently in force must be introduced, to modify certain essential points in the type of governance imposed by the new Treaty.

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This article examines complicated labor and explores the theoretical implications of productive labor without value formation. Previous studies on complicated labor have exclusively focused on the aspects of the reduction problem in which the value produced by complicated labor is reduced to the value produced by simple labor. However, due to their lack of awareness of the multilayered concepts of value and labor, the controversy seems to have come to a standstill. This article instead argues that the theoretical significance of complicated labor lies in the impossibility of reducing such value to simple labor. By closely examining the theory of "patterned cost," it is shown that the division of labor market into regular employees and reserve army of labor is necessary because the sale of labor power involves "patterning."

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The aim of this paper is to discuss the historical development of the theory of finance capital and to establish a new approach to financialization. In part 1, I survey the relationship between financialization and the theory of finance capital, as referenced in the literature on financialization. For example, Lapavitsas refers to Hilferding's theory of finance capital in order to capture the key aspects of financialization. He points out some differences between financialization and the theory of finance capital. Banks and large corporations are no longer closely related; the character of financial systems has changed from bank-based to market-based, and so on. However, he refers to only the classical theory of finance capital by Hilferding, and pays less attention to the development of the theory of finance capital. In part 2, I trace the development of the theory of finance capital. The classical theory of finance capital was succeeded by the corporate control debate in America. The scholars of management control theory such as Barle, Means and Sweezy, insisted that managers control corporations. The scholars of bank control theory such as Fitch, Oppenheimer and Kotz, insisted that large banks control corporations. One of the essential points of this argument was that management control and bank control were estimated based on the size of numerical values, such as the self financing ratio and the possession percentage of the stock in this debate. Both arguments assume a conflict of interest between corporations and banks. In the 1980s, a new approach to finance capital appeared. The scholars who payed attention to the relationships between corporations such as Herman, Mintz, Schwartz and Matsui thought that the interest between corporations and banks was not opposed but interdependent. Corporations and banks make use of each other's resources to win the competition in each sector. This new approach contributed to an expanding analysis of the cooperative relationships and its transformation between corporations and banks. The point that should be referred to as a result of the theory of finance capital is the approach used to pay attention to the interdependence between corporations and banks. If we bring this point into the analysis of financialization, we can draw a dynamic process of financialization in which corporations and banks mutually influence each other.

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