Jakob Kapeller

Heterodox United vs. Mainstream City? Sketching a Framework for Interested Pluralism in Economics

Pluralism is a key term in the current discourse in heterodox economics, emphasizing the need for greater theoretical integration and institutional cooperation of different economic traditions. However, both the nature of pluralism and the concrete role ascribed to pluralist thinking for the development of economics have been somewhat contested, pointing to a lack of (widely agreed) conceptual foundations. This paper addresses this conceptual gap by proposing a framework for interested pluralism as a guideline for organizing heterodox economic research, in particular, as well as economic debates, in general. In essence, interested pluralism suggests replacing the traditionally invoked demarcation criteria between different economic traditions by a set of rather ecumenical pluralist principles, whose concrete implications for economic research we discuss.

Breaking New Paths: Theory and Method in Path Dependence Research

We argue that the main reason for the prevailing dissent in path dependence research methods is the futile attempt to capture “path dependence as a whole” within either a single-method research design or a single all-encompassing theoretical mechanism. By delineating two conceptual building blocks, path creation/emergence and positive feedback/lock-in, which rest on different epistemological foundations, we advocate for the application of complementary methods. We further refine our argument by proposing a general axiomatic structure for path dependence as a theoretical concept, which allows us to derive more specific methodological suggestions.

'Model-Platonism' in economics: on a classical epistemological critique

Roughly 50 years ago, the eminent German philosopher and social scientist Hans Albert presented a critique of ‘Model-Platonism’ in economics to describe essential elements of the ‘neoclassical style of economic reasoning’. Specifically, Albert advanced a series of epistemological arguments to illustrate conceptual shortcomings in neoclassical theory, which may be utilized to immunize the latter against conflicting empirical evidence. This article summarizes Alberts main arguments and illustrates his most important insights by using simple propositional logic. Based on these findings, a clarification and definition of ‘Model-Platonism’ is offered and the applicability of the Model-Platonism-critique to current developments in mainstream economics is assessed. Finally, two possible extensions of Alberts argument, the concepts of oscillating informational content and axiomatic variation, are illustrated with respect to their potential for immunization against critique.

A Guide to Paradigmatic Self-Marginalization: Lessons for Post-Keynesian Economists

While many heterodox economists hope that the recent financial crisis will lead to paradigmatic change in economics, we argue that path-dependent processes and institutional factors within the economic community hinder such a change. Focusing on the citation behavior of economists in heterodox journals in general and in Post-Keynesian journals in particular, we discuss structural reasons—connected to positive feedback mechanisms within the institutional framework of the economics discipline—for the marginalization of heterodox economic thought.

New Perspectives on Institutionalist Pattern Modeling: Systemism, Complexity, and Agent-Based Modeling

Abstract: We focus on the complementarity between original institutional economics, Mario Bunge’s framework of systemism, and the formal tools developed by complexity economists, especially in the context of agent-based modeling. We assert that original institutional economics might profit from exploiting this complementarity.

Some Critical Notes on Citation Metrics and Heterodox Economics

This article investigates citations metrics as an institutional phenomenon from two perspectives: first it tries to articulate the role of citation metrics within a Gramscian framework; second it compares citation patterns from orthodox and heterodox economic journals to gain insights on the current economic discourse. Complementary to this general question the role of the Review of Radical Political Economics within citation metrics will be discussed. JEL classification: A14, B50, B51

Correcting for the Missing Rich: An Application to Wealth Survey Data

It is a well-known criticism that if the distribution of wealth is highly concentrated, survey data are hardly reliable when it comes to analyzing the richest parts of society. This paper addresses this criticism by providing a general rationale of the underlying methodological problem as well as by proposing a specific methodological approach tailored to correcting the arising bias. We illustrate the latter approach by using Austrian data from the Household Finance and Consumption Survey. Specifically, we identify suitable parameter combinations by using a series of maximum-likelihood estimates and appropriate goodness-of-fit tests to avoid arbitrariness with respect to the fitting of the Pareto distribution. Our results suggest that the alleged non-observation bias is considerable, accounting for about one quarter of total net wealth in the case of Austria. The method developed in this paper can easily be applied to other countries where survey data on wealth are available.

The performativity of potential output: pro-cyclicality and path dependency in coordinating European fiscal policies

ABSTRACT This paper analyzes the performative impact of the European Commissions model for estimating ‘potential output’, which is used as a yardstick for measuring the ‘structural budget balance’ of EU countries and, hence, is crucial for coordinating European fiscal policies. In pre-crisis years, potential output estimates promoted the build-up of private debt, housing bubbles and macroeconomic imbalances. After the financial crisis, these model estimates were revised downwards, which increased fiscal consolidation pressures. By focusing on the euro areas economies during 1999–2014, we show how the models estimates influence actual economic outcomes. We identify two major economic impacts of the potential output model. First, the political implications of the model led to pro-cyclical feedback loops, reinforcing prevailing economic developments. Second, the model has contributed to national lock-ins on path dependent debt trajectories, fueling ‘structural polarization’ between core and periphery countries.

From free to civilized trade: a European perspective

Abstract In the context of unfettered international competition, free trade tends to undermine basic moral concepts such as justice, dignity, and fairness. Therefore, we suggest moving to a new understanding of markets in international trade, which we call ‘civilized markets’. A civilized market tries to ensure that free entrepreneurship and open markets are eventually compatible with those basic and universal values that also serve as moral cornerstones of the European project. In order to accomplish a civilized market, we propose to establish a new European institution with a mandate to set and enforce minimum standards for goods sold on the European market.

REGULATORISCHE UNSICHERHEIT UND PRIVATE STANDARDISIERUNG: KOORDINATION DURCH AMBIGUITÄT*

Steuerung durch Regeln bedeutet den Versuch, fundamentale durch regulatorische Unsicherheit zu ersetzen und so die Handlungen verschiedener Akteure zu koordinieren. Eine Form von regulatorischer Unsicherheit sind dabei die jeder Regel inharenten Ambiguitaten, die den Versuch Unsicherheit zu reduzieren zumindest teilweise konterkarieren. Am Beispiel privater Standardisierungsbemuhungen im Bereich des Urheberrechts versucht sich der vorliegende Beitrag an einer Beantwortung der Frage nach dem Zusammenhang zwischen dem Ausmas regulatorischer Unsicherheit und der Koordinationswirkung einer Regel. Hierzu wird die regulatorische Konversation rund um eine konkrete Regel – dem Creative-Commons-Lizenzmodul der „nicht-kommerziellen Nutzung“ – sowohl hinsichtlich ihres organisationalen Entstehungskontextes (Regelsetzung) als auch im Zusammenhang mit der Adoption und Diffusion dieser Regel (Regelanwendung) analysiert. Es zeigt sich dabei, dass regulatorische Unsicherheit nicht notwendigerweise zur Ineffektivitat oder gar Dysfunktionalitat von Regeln fuhren muss, sondern auch produktiv genutzt und als eine, der Koordination dienliche, Leerstelle interpretiert werden kann. Im Ergebnis tragt die Ambiguitat der hier untersuchten Regel entscheidend zu ihrer Verbreitung sowie zur Effektivitat ihrer Steuerungswirkung bei.