Hardy Hanappi

From Political Economy to Economics

ion: abstract science, political economy as 31; abstract theorisation, Marx’s favour for 36; German School and realism of abstraction 86; power of 37; ‘rational’ abstraction and material reality 37; role of 222–23 abstract/deductive method 1, 11, 18, 23, 78, 88, 120, 129, 144, 243, 245, 246; classical political economy 16, 20–22, 26, 32–33, 34–36, 54–58; dialectics and history, Marx’s perspective 32–33, 34–36; marginalism and 91, 92, 94, 96, 99, 107, 113 accumulation, consequences of 66 acquisitive ethic 207 aggregate reasoning 14 American Economic Review 123 American institutionalism 302; applied economics 160; Ayres and 186–88; business cycles 157, 184–85; business enterprise 167–68, 173–74; capitalism and 167–68, 169–70, 178–79, 181, 187, 189; capitalist order, disintegration of 169–70; ceremonialism 187; collective action 176–77, 178, 180–81; Commons and 176–82; conflict of interest 176–77, 178; decline of 188–89; dynamic approach 161–62; elements of 189; empiricist drift 175–76, 182–86; emulation, principle of 166–67; evolution and history 159–62, 163–64, 171–74; globalisation, comparison of attitudes to 189; habits of thought, material circumstances and 164–70; Historical School and 158, 159, 162, 164, 171, 174, 176; historical specificity 160, 177, 183–84; historicism of Commons 179–80; industrial organisation 167–68; instinct-habit psychology 164–65, 166–67; institutional individualism 180; interdisciplinarity 159, 160, 171–72, 183; leisure class, institution of 166; long-run development, issues of 158–59; marginal utility 179; marginalism and Commons 180; Marxism, Veblems critique of 162–64; materialism 162, 163, 168, 169, 190; method and history 170–74; methodological individualism 180; Mitchell and 182–86; national income, notion of 184; optimism of 189–90; pecuniary exploitation 166–67, 168, 169, 170, 172–74, 183; psychologism 171, 172; roots of 158; scarcity 176–77, 182, 186; self-interest 167, 171, 173; social concepts and institutions, role of 183–84; social individual, focus on 160–61, 164–65; social sciences, boundaries between 160; stages, theory of 158; technology and change 165–66, 169, 186–87; Veblen and marginalism 162–64; workmanship 164–65 analytical neutrality 275 Annals of the American Academy of Political and Social Science 250 applied economics 160 art and science of economics, distinction between 31–32 ascetic Protestantism 207–8 asocial reductionism 109 asocial subjectivity 29 atomism 98, 106, 245, 249, 277 Austrian School 229; analyticcomposite method 102, 245, 247; distinctiveness 246; economics imperialism 254; evolutionary phases 246, 267; falsificationism 262; formation 250–54, 267; generative causality 247; Hayek’s spontaneous orders 259–67; historical content 253–54; historicism, Hayek’s critique of 261; knowledge, communication of 266; logical positivism 255; marginal utility 246–47; marginalism, Menger and slippage from 246–50; Menger’s founding role 245; methodological collectivism 261; methodological confusion, attack on 256; methodological individualism 259, 260, 263–64; Mises’ praxeology 254–59, 267; money, institution of 248–49; natural phenomena 256–57; scientism, criticism of 260–61, 262–63; social content 253–55; social economics 251–54; social institutions, origin and nature of 247–48; social phenomena 256–57, 261; social sciences, method of 257; sociology 253–54; spontaneous orders, designed institutions and 264–67; subjectivism 259, 261, 266; trajectory 245–46 axiomatic deductive theory 5, 305 axiomatic formalism 239, 270 behaviourism 103, 175, 176–77, 188 British empiricism 232 British Historical School 2, 6, 9, 24, 72, 74, 76, 97, 118, 137, 230; economic history, birth of 142, 144, 148; economics as broad science 151–52, 155; German historismus and 72, 74, 87 business cycle 157, 184–85, 271, 273, 278, 285, 302; social economics 212–13 Business Cycles: The Problem and Its Settings (Mitchell, W.) 184 Business Cycles (Mitchell, W.) 184 Business Cycles (Schumpeter, J.) 209, 212–13 business enterprise 76, 167–68, 169, 172, 173–74, 227 The Theory of the Business Enterprise (Veblen, T.) 167, 172 Capital (Marx, K.) 28, 33, 38, 39–41, 44, 62–67, 187 capitalism: American institutionalism and 167–68, 169–70, 178–79, 181, 187, 189; capitalist acquisition 206–7; capitalist order, disintegration of 169–70; capitalist spirit 204–5, 206–7, 208–9; commodity and 39–40, 62–63, 66; dynamic of 210; ethos of 207; genesis of 206–10; high capitalism, age of 205–6; origins of 41–42; reasoned history of 202–14; science of capitalist economy 15; transition from feudalism to 52–53 The Theory of Capitalist Development (Schumpeter, J.) 209, 210–11 ceremonialism 187 The Character and Logical Method of Political Economy (Cairnes, J.E.) 32 class 17, 22, 52, 63, 109–10, 114, 144, 169; class conflict 43, 163–64; classes as basic units of analysis 14, 15, 33; leisure class 166, 167, 168, 170, 172, 173, 174, 189; relations 62, 66, 67–68, 201; working class 56, 77, 170 classical political economy: abstract/ deductive method of Ricardo 16, 20–22, 26, 32–33, 34–36, 54–58; aggregate reasoning 14; capitalist economy, science of 15; classes as basic units of analysis 14, 15; deduction 15; eclectic methodology of Smith 16–19, 26; economic thought, divide in 15–16; individualistic reasoning 14; induction 15–16; marginalist revolution 15; methodological individualism 14; methodological schism 15–16, 22–26; multi-dimensional complexity of 33–34; orthodox neoclassical economics and 15, 45, 46; philosophy and economics 14–15; society, self-existence of 14; utilitarianism of Bentham 19–20, 26; value theory 14; wealth and distribution, concern for 13; western thought, divide in 15–16; see also political economy; political economy as history; social economics; sociology cliometrics 69, 139, 140, 154, 155, 306 collective action 176–77, 178, 180–81 collectivism 13, 17, 20, 33, 78, 79, 80–81 commodity and capitalism 39–40, 62–63, 66 comparative economic theory 121 comparative static analysis 5, 51, 210 components theory: of price 17, 54, 61, 69; of value 50 concepts, role of 222–23 364 Subject index

Money, Credit, Capital and the State

This paper combines several important arguments, which have puzzled economic theory for decades, to arrive at a more adequate description of the current global crisis. The main theoretical innovation is to view the long-run economic evolution as a stepwise evolution of money forms. Moreover, as indicated in the title, this development of money forms is closely linked to the development of social institutions, in particular, state institutions. Capital, the most recent form of money, today has to be understood as an omnipresent algorithm, as a growth imperative implicit in social institutions and internalized models. The task of evolutionary political economy thus will be to provide an adequate theoretical counterpart to mirror these processes. This paper explores how far a careful reconsideration of received economic theory can contribute to this task.

Collect now-consume later on innovative products in electronic commerce

In our paper, we develop the idea that in the future electronic commerce will increasingly involve customers whose lack of time for consumption forces them to collect the products they purchase for later consumption. The peculiarity of these conditions at the point of sale will be discussed in detail from the perspective of economic theory. The analysis will elaborate how certain characteristics of utility functions as well as other characteristics of this consumer segment contribute to these peculiarities. As a result some lessons for the timing of innovations in the supply of information commodoities are derived. In particular, it is shown why it might be profitable for suppliers in electronic commerce to produce waves of technological fashions. From a theoretical point of view, it seems to be reasonable to use chaotic dynamics to describe this highly volatile market behavior.

Evolutionary Political Economy: Content and Methods

In this paper we present the major theoretical and methodological pillars of evolutionary political economy. We proceed in four steps. Aesthetics: In chapter 1 the immediate appeal of evolutionary political economy as a specific scientific activity is described. Content: Chapter 2 explores the object of investigation of evolutionary political economy. Power: The third chapter develops the interplay between politics and economics. Methods: Chapter 4 focuses on the evolution of methods necessary for evolutionary political economy.

Unemployment in Mediterranean EU Countries: Fighting Youth Unemployment

The most dramatic problem of European economic policy is the exploding unemployment rate in the Mediterranean EU-countries. This chapter sets out to explain the causal links leading to this major bottleneck in Europe’s economic dynamics. In the first part the causal chain is described in detail as follows: Unemployment is increased by austerity policy of governments—austerity policy is enforced by rapidly rising government debt—government debt has been rising due to bailout of banks and speculative interest rate attacks on countries—banking crisis and aggressive interest rate policy are a consequence of exploding demand for (uncovered) financial promises at global financial markets—uncovered financial promises are the only remaining channel for capital accumulation if increases in (real) labour productivity are dying away on a global scale. The phenomenon of European unemployment thus is explained by the impasse of the dominant global mode of production, which had surfaced first as the financial crisis in 2008.

Conclusion—The Birth of Europe

The emergence of a continental entity of political economy is a long and complicated process. Since the end of World War 2 Europe has experienced rather different stages to reach its current form. These big and often rather abrupt shifts in the perspective of a united Europe usually were just elements in the pulsating development of the global political economy; Europe always has to be understood as a vital and large part of the world economy.

Defeating Nationalism in Europe. Voting Mechanisms for Highly Integrated Economies

This chapter shows how dense economic links in Europe are, basically by using intra-European trade flows and some financial data on the increasingly oligarchic ownership structure of financial intermediaries. Such a highly integrated area with this enormous amount of households needs a quantum jump in democracy design—the advances of the division of labour come at the price of dramatically increasing alienation. A problem which has not even been properly conceptualized yet. What we observe is unreasonable piecemeal engineering guided by fundamentally inappropriate ideological model fragments maintained by the leading political elite. Some ideas on voting theory that highlight the difficulties of such a political design are provided. The chapter concludes that such a “pilote project Europe” has to be enforced rapidly to prevent radicalisation of nationalism, to avoid a new totalitarianism.

Macroeconomic Simulation Studies — Results and Problems

It was in the late seventies, when one of Helmut Frisch’s assistents (Heinrich Otruba) brought back to Vienna some hundred punch cards he had copied during a visit in the USA. They contained a program that was used at that time for teaching purposes at Yale by a certain game theorist, Martin Shubik1. At the same time I just happened to finish my master’s thesis in the study of economics and computer science at Frisch’s institute and so soon was involved in the institute’s efforts to catch up with U.S. universities in the newly emerging art of using simulation techniques to support the teaching of economics.

Electronic commerce and market mechanisms. A game-theoretic approach

This paper takes the view that providers of electronic markets are to be considered as economic actors in a strategic game played with potential buyers and sellers. The crucial assumption clearly concerns the choice of instruments that a market provider is considered to have at hand. Contrary to large parts of mainstream economic theory, which assume a simple perfect auction market setting guaranteeing price flexibility and actual trade taking place only in situations where supply equals demand, the position taken here emphasizes that market mechanisms can be very diverse and trade outside of equilibrium is essential. To operationalize these core assumptions the instrument of the market provider is modeled as the choice of market mechanisms that is provided.

A Network Talk on CSCW - Defining CSCW by the Use of the Network Formalism

Computer Supported Co-operative Work (CSCW) is based on some fundamental concepts which are defined ambiguously. In our view it is necessary to find definitions of the elementary CSCW-concepts like ‘co-operative work’, ‘logical dependency’, ‘time dependency’ and ‘power’ in order to derive criteria to distinguish between technical systems which are CSCW-systems and others which are not. Petri nets are an appropriate language helping to formulate these definitions.