|ICAPE Conference Program, January 5, 2017, Roosevelt University
|Auditorium Building, 430 S. Michigan Ave., Chicago, Illinois
|Conference rooms: 320, 420, 426, 430, 528, 628, Congress Lounge
|Session 1, 8:00-9:30 AM
|Roundtable: Doing and Teaching Feminist Economics, 8:00-9:30 AM. Room: AUD 420
|Doing and Teaching Feminist Economics
|Doing and Teaching Feminist Economics
|Paths toward Pluralism in Feminist Economics/with feminist economics
|Teaching Feminist Economics: IAFFE Syllabi Project
|The session participants, all current or past members of the International Association for Feminist Economics (IAFFE) board, will discuss “what is feminist economics,” IAFFE and its journal Feminist Economics, and the IAFFE syllabus project. There will be time for questions from the audience.
|Pluralism, Pedagogy and Policy, 8:00-9:30 AM. Room: AUD 426
|One Approach to Pluralism and Heterodoxy
|Discussions of pluralism frequently emphasize the advantages of presenting differing schools of economic thought as autonomous and internally consistent paradigmatic approaches. At the same time, many non-mainstream economists increasingly identify with a broader conception of heterodoxy in addition to or instead of traditional, more categorical schools of thought like for example Marxism or Institutionalism. This presentation seeks to square this circle by presenting alternative schools of thought in the context of the contribution each makes to building a heterodox understanding of a capitalist monetary production economy. This approach to teaching alternative schools of thought has the advantage of emphasizing the concrete strengths of the various schools while at the same time identifying contribution they might make to building a comprehensive alternative to neoclassical orthodoxy. It may then be possible to contrast such an alternative to mainstream economics in a further pluralist move. Marxism, Post-Keynesianism, Institutionalism, Feminist Economics and Ecological Economics will be considered in this light.
|Heterodox Economics: Time to Winnow Wheat from Chaff
|Providing a multi-pronged critique and multiple alternatives to mainstream economics has been the mission of ICAPE from its very inception. But Heterodox economists cannot thrive unless we learn how to separate chaff from our own wheat. After a brief review of positive contributions from Marxian, ecological, and neo-Ricardian economics, this paper focuses on some “chaff” in each approach that it is high time to eliminate. It argues that Marxists need to jettison the labor theory of value, ecological economists must stop denouncing economic growth per se, and neo-Ricardians must move beyond “positive” economics and provide a “normative” critique of capitalism. In each case a concise but forceful argument will be presented for why something proponents believed to be integral to their approach is in fact, not integral, but detrimental. Since it is far easier for all to agree to “let a hundred flowers bloom” than to agree on how to remove weeds from our collective garden, the paper will predictably provoke sharp controversy.
|Van den Berg
|Economic Pluralism: Only a First Step
|Pluralism is needed in economics, whose culture restricts economic analysis to neoclassical models that project the individualism, market orientation, and anti-government bias of the neoliberal philosophy favored by the capitalist elites. In this paper we argue that intra-disciplinary pluralism, defined as the openness to the use of alternative economic models and paradigms, constitutes only a first step toward eliminating the neoliberal bias in economics. The complexity of human existence requires economists to also pursue inter-disciplinary pluralism. Economic activity occurs within markets, households, government, corporate structures, and other organizations within human society, which, in turn, exists within a natural environment. All these spheres of human existence interact in complex ways, so that economic activities are subject to relationships that extend well beyond what most economic models and alternative schools hypothesize. Hence, a pluralistic set of economic models still generates biased conclusions because they ignore other spheres. For example, heterodox economists often conclude that demand-side macroeconomic policies, e.g., a direct employment program, can restore economic growth, yet they often ignore the environmental limits to increasing production. The potential consequences of ignoring long-run environmental consequences of human economic and social activity include catastrophic outcomes. Complexity complicates economic analysis, which may explain economists’ preference for simple but biased economic models that cannot provide realistic answers to complex problems such as climate change, loss of biodiversity, growing economic inequality, financialization, or social conflict. We argue that the response to complexity is not to seek models of complexity – that is an oxymoron that inevitably leads to bias and misleading simplification – but rather to respect uncertainty. Policymakers should, therefore, embrace the precautionary principle, policy flexibility, sunset rules, robustness analysis, and the inevitability of policy failures. The prerequisite for studying economics is, therefore, a serious liberal arts education that covers science, language, history, sociology, psychology, philosophy, and art.
|A Pluralist Approach to the Economics of Regulation
|Neo-classical economics approaches the economics of regulation as one of correcting market failures and providing the right incentives to self-interested optimimising economic agents. Other economic approaches bring concepts of values, equity and transparency to the design of effective regulation, which can actually support the development of more effective regulatory strategies while also creating less ‘red tape’. It can do this at a very broad level by: a) Reframing regulation as an essential part of efficient markets (institutional economics) and societal success (evolutionary economics); b) Understanding the crucial role of heuristics in value based behaviour and compliance (behavioural economics); and c) Bringing a dynamic complex systems analysis to regulatory processes and institutions (evolutionary and complexity economics). Approaches underpinned by pluralist economics are already to some extent entering mainstream organisations such as the Bank of England and Ofwat . However the application of pluralist economics (e.g. OECD ) has tended to focus on the implications of (claimed) individual irrationality rather than considering the evolution of effective systems of values, institutions and regulations. Pluralist economics, by bring consideration of systems and values, can help in designing regulatory systems that evolve without regulatory escalation leading to the ‘morass of red tape’ which is also likely to be ineffective.
|Boran Ali Mercan
|The Fantasy of the Self-corrective Market of Ideas: A Psychoanalytic Perspective on the Nature of Research Misconduct in Economics
|The self-corrective market of ideas has been the backbone of economic research tradition. It draws up a picture of an ideal where there is no plagiarism and conflict of interest amongst researchers. Ideas are discussed, either revised or abandoned: the market of ideas simply works with no friction. However, the idea of self-corrective market appears to be an academic fantasy that sustains the enjoyment of the philosophers and historians of science from defining the nature of research misconduct. In this paper, we claim that the self-corrective market of ideas is a mainstream hegemonic attitude in science in a way as to define the set of given rules of the academic game and reproduce the commodified processes of knowledge production. We propose a counter-hegemonic strategy in which the pressures of orthodox teaching methods in economics are eliminated. To put simply, we ask for new courses and training methods on research ethics in economics in order to prevent such delinquencies as conflicts of interest, plagiarism, and data fabrication and data manufacturing.
|Role of Pluralism in Creating a New Paradigm: Presentation & Roundtable, 8:00-9:30 AM. Room: AUD 430
|The Role of Pluralism in Creating a New Paradigm for Economics
|If it is accepted—as we do— that the purpose of economics, in the words of Heilbroner (1998: 172), is to explain the ‘workings, problems and prospects’ of the economy, then the shortcomings of mainstream economics are clearly apparent. For quite some time mainstream economics has been in crisis. Yet a paradigm shift has not occurred. In this paper, we argue that a paradigmatic change requires the intervention of a new vision (ontological view) of social reality. The method of the mainstream was purposefully designed to support a particular vision of a capitalist market economy and one inter alia of inherent stability. Pluralism provides the potential to develop a far more realistic vision of contemporary capitalism and its social provisioning process. This paper compares the mainstream vision of capitalism’s inherent stability with the visions of inherent instability underpinning heterodox theories of value and distribution. The paper’s argument is two-fold; first, heterodox economic frameworks provide a pluralistic alternative to envisioning actually-existing capitalism; and, second, the key to effecting a paradigm shift is not another re-jigging of mainstream economics but replacement of its ‘stability vision’ of capitalism with one of inherent instability and the application of analytical approaches that can realistically explain our economic and social lives. As Schumpeter (2006 : 39) observed, paradigm changes occur with the ‘intervention’ of a vision that “teaches us to see things in a light of which the source is not … the facts, methods, and results of the preexisting state of the science”. This is the role we see for pluralism in economics.
|Merve Burnazoglu; Jack Reardon; Camille Baulant; Sirisha Naidu; Zhen Ying; Aqdas Afzal, Jesús Muñoz, Ali Tarhan, Faruk Ulgen
|Developing a Pluralistic Curriculum, 8:00-9:30 AM. Room: AUD 320
|An Adventure is About to Happen: Curricular Reform at Willamette U.
|In August 2014 Willamette University began offering a new economics curriculum that we believe will help us better prepare students for independent, critical inquiry into economic issues. Key changes include commitments to: 1) begin with economic issues that motivate questions; 2) incorporate the history of economic thought in a systematic way; and 3) embrace explicit pluralism. Our approach to pluralism is novel in that it organizes economic thought according to a grand traditions” approach and is embedded in the curriculum in a fully integrated way, developing multiple perspectives side-by-side in each course. The purpose of this paper is to describe the new curriculum in more detail and explain our rationale for adopting it. In doing so, we hope to contribute to the literature on pluralism and economics education.
|Jay Hamilton, Ian Seda-Irizarry
|Developing Heterodox Economics Curriculum
|In this article we seek to contribute to heterodox teaching initiatives by focusing on curriculum building and institutional opportunities and constraints. We will first focus on the need for alternative curriculums in the context of the global crisis and the crisis of economics as a discipline. Then we will give a historical background to John Jay College and the City University of New York in which opportunities were created to develop a heterodox program. Then will focus on the core of our new curriculum and its contrasts with mainstream and other current alternative projects. For this we will use concrete examples from courses we have developed. Finally we will conclude with institutional constraints limiting possibilities.
|Addressing Controversies in Economics Instruction Through Interdisciplinary Learning Communities: The Evergreen Experience
|Proposals for reforming economics teaching usually begin with content; here we begin with form, specifically the interdisciplinary learning community model as practiced at Evergreen State College. The paper begins by cataloging the critiques of undergraduate economics instruction, particularly at the introductory level, by dissident student groups. It then describes the manner in which economics is taught at Evergreen, demonstrating that, without directly intending to do so, Evergreen economists have developed approaches that respond to the student critiques. The paper concludes by identifying problems with the Evergreen model.
|Post-Keynesian and Marxist Macro-Economics – Overlap and Differences, 8:00-9:30 AM. Room: AUD 528
|Notes on Marx, Say’s Law and the Interconnectedness of the Economy
|Keynes phrased much of his theory of depression in terms of an attack on Say’s Law. Marx’s attack on Say’s Law, almost dismissive, impressionistic and multifaceted but the question of Say’s Law closely tied to Marxian Crisis Theory. Since Sweezy Marxian crisis theory divided into those approaches that preserve Say’s Law and those that attack it. The argument made here suggests this distinction is largely beside the point and an integration of the various strands of Marxian crisis theory can be based on Marx’s understanding of the interconnectedness of the capitalist economy as suggested in his Theories of Surplus Value.
|The Implications of Continuing to Teach ‘Supply & Demand’ Instead of ‘Demand & Cost’ in Intro Courses – an Unequal Exchange Application
|Almost every introductory economics text (including most heterodox texts) begins with “supply and demand” in the first few chapters. Though some texts may include a critical evaluation of this mythological meme for the production economy this is not adequate to eliminating its enormous ideological power. Based on a published book (The Morality of Radical Economics: Ghost Curve Ideology and the Value Neutral Aspect of Neoclassical Economics, Palgrave Macmillan 2016), and a forthcoming book (The Global Free Trade Error: The Infeasibility of Ricardo’s Comparative Advantage Theory) , an alternative “demand and cost” meme is proposed and applied to unequal exchange in international trade.
|Contemporary Capitalism & Why We Need Marxism
|The essay is an argument that a Marxist framework, whose basics we sketch, remains essential to understanding the fundamental political, social and economic character of our current international capitalist order. In particular any political movement that aims to radically transform this order in the direction of socialism must have a strategy based on Marxism. We argue for this position by doing a wide ranging analysis of current imperialism and its contemporary character, emphasizing, as Marx would, the fundamental technological developments that have altered the relations of production over the past half century, and the tremendous impact this has had on the lives of the laboring classes both in the imperialist centers and in the neo-colonies.
|Socially Inclusive Approaches to Poverty Reduction and Development Policy (ASE), 8:00-9:30 AM. Room: AUD 628
|Geographical Political Economy & Development: Practical Applications Through Geospatial Technologies
|Geospatial technologies are playing an increasingly important role in the provisioning of local development and public policy formation. Emerging geospatial tools can be used to represent socio-spatial inequalities and to acquire ground-truth data on unequal access to resources, exposure to environmental hazards, and inclusion in local decision-making. This paper demonstrates the role of these geospatial tools in exploring uneven geographical development and identifying an alternative to the current neoliberal policy paradigm through: (1) working toward a political economic framework in which to base geospatial economic analyses, and (2) conducting a GIS analysis of the local development process in the Kansas City, MO area. A synthesis of heterodox political economy and economic geography brings the concepts of socio-spatial positionality and the production of accessibility, identified in the work of economic geographers, into a Post Keynesian Institutionalist political economy perspective. This provides the backdrop for exploring interconnections between various levels of economic analysis (macro, meso, and micro). To explore the implications of the production of accessibility and socio-spatial positionality this paper extends the socio-spatial ontology of geographical political economy applied to trade and unequal global exchange by Eric Sheppard (2016), to an intra-urban analysis of the Kansas City, MO area in the United States.
|Reorganization of labor markets in transition economies as a source of growth and development
|Significant differences in history, political development, and culture in transition nations have shaped a highly heterogeneous nature of transition processes to market economy. This inquiry suggests an alternative approach to policy formation—demand-oriented policies that are encouraged by the society to form a market economy that generates continually increasing incomes, living standards and financial stability. The alternative set of policies should be directed toward reorganization of the fundamental characteristics of the production process, and primarily executed through reorganization of labor markets. While some countries have minimized the negative spillover effects of drastic institutional changes in their modes of production, some others have found themselves in downward spiral growth trends and degrading living standards. This inquiry provides a comparative analysis of various economic systems adopted by transition economies in seeking to analyze the reasons as to why certain countries were more successful in their economic transition while some others remain desperately poor despite their close proximity and concatenation. The analysis demonstrates that the more stagnating economies failed to provide the necessary structural reforms and the suitable environment for their execution.
|Public Employment Guarantee: An Institutional Adjustment towards a more Inclusive Provisioning Process
|This inquiry seeks to establish that a public employment guarantee (PEG) would animate the non-invidious re-creation of community, challenge the hierarchy which permeates social and economic relations, and facilitate an institutional adjustment towards a more inclusive provisioning process. The analysis commences by elucidating how the current institutional structure fails to provide a non-invidious provision of the material means of life. The first section demonstrates that the institution of ownership and the price system serve as the animating forces creating the in-egalitarian power structure prompting unemployment, an inequitable distribution, and hierarchy. After describing the social problem and institutional structure, the analysis extends Hyman Minsky’s proposal for a PEG, focusing on the institutional implications. The theory of institutional adjustment illustrates that community remains integral to the adjustment process, providing space for organizing across historical divisions while encouraging an increased recognition of the interdependence necessary for change. The analysis concludes by considering how a PEG challenges the dominant and problematic institutions. This final section illuminates the role of a PEG in facilitating a transition towards an inclusive provisioning process: the creation of an institutional structure that reduces hierarchy and promotes equity, diversity, and autonomy while enabling all members of the community to participate in the social provisioning process.
|Business Innovation for Development? A Critical Perspective
|Innovation is commonly seen in economics as a benign and socially beneficial process, and is therefore used synonymously with technical progress. Becoming part of the so-called knowledge economy is therefore widely viewed as a goal-to-reach for struggling developing nations. Building on the Schumpeterian distinction between invention and innovation, the Veblenian dichotomy (especially its development by Institutionalist scholars such as Bush, Juncker, and Foster) and the concept of degrees of separation related to the going concern nature of the business enterprise, it is argued that an innovation process based on pecuniary habits of thought will not necessarily (or even likely) lead to the most advantageous use of the community’s joint stock of knowledge. The present paper will seek to vindicate this view through an empirical analysis of product development in modern capitalist business enterprises, identifying the relevant structures and agencies both within and outside the going concern; and endeavors to explore alternative structures of innovation systems that might be more appropriate to the development of technology fitted to the needs of communities in developing countries.
|Session 2: 9:45-11:15 AM
|Roundtable on The Art of Publishing in Heterodox Journals, 9:45-11:15 AM. Room: AUD 420
|Often, the process of getting an article published in a heterodox journal is shrouded in mystery. At this session, experienced editors from leading heterodox journals will offer their insights and advice on the publication process.
|Editor, Journal of Economic Issues
|Editor, Review of Radical Political Economics
|Co-Editor, Review of Keynesian Economics
|Co-Editor, Review of Political Economy
|Editor, International Journal of Pluralism and Economics Education
|Alternative Perspectives about Social Economics (ASE), 9:45-11:15AM. Room: AUD 320
|An Identity-Based Club Theory Approach to Immigration & Adaptation
|Immigration and adaptation are governed by multiple factors. This paper aims to explain immigration and adaptation behavior in complex social system using a framework that emphasizes social identity mechanisms. Immigration concerns individuals’ move from one society to another. Adaptation concerns the evolution of migrants’ identities in the matching processes between immigrants and countries understood as “clubs.” Immigrants, who possess social and personal identities, are heterogeneous. A country is a “club” because it is a social group of which includes some people and excludes others, depending on whether their identities match with the identities of members of the club. Matching theory, which has been used to explain labour market frictions, is used here to study frictions in adaptation processes of immigrants. Club theory is used to move from a static economic integration framework to a dynamic identity-based interactive approach to adaptation. The paper addresses an issue important to human development and poverty reduction. It employs an alternative framework for the modeling of human behavior and society, and offers alternative perspectives on policies regarding immigration and adaptation. Keywords: immigration, adaptation, identity, heterogeneity, club theory.
|Gaëlle Despierre Corporon
|Poverty Reduction and Development Financing in a Financialized World: What Alternatives?
|Even though the literature on the nexus of financial markets development, inequality and poverty is still nascent, institutionalist, post-Keynesian and Marxist approaches point to perverse economic/social consequences of endogenous instabilities of financialized capitalism and bring forth concerns about economic insecurity. In the aftermath of the 2007-2008 catastrophe international organizations – like the IMF – also document that financial liberalization tends to exacerbate poverty. This article argues that financialized capitalism results in a flawed social evolution and seeks to assess the relevance of alternative ways of financing the process of development and preventing increasing poverty. The article maintains that financial markets must be reorganized in order to make productive systems less prone to speculative instabilities. The relevant alternative might be a financial cooperation among developing-emerging economies in order to go beyond the short-sighted microfinance formulae and external-dependence-amplifying official development assistance. It would be suitable to direct a possible South-South financial cooperation towards a “definancialized finance” structure, organized and supervised as a public good. In this aim, the first section summarizes major arguments on the links between financial markets, development and poverty and shows that financialized capitalism is not fit to meet the needs of the process of social development. The second section then studies the prerequisites for a sustainable financing of development to collectively combat poverty. Therefore the third section suggests an alternative framework that would rely on a toughly regulated international cooperation that should draw up common development goals and put financial markets in the service of human development.
|Poverty Aggravation by Economic Corruption
|A major roadblock to poverty alleviation, especially in developing countries, has been corruption. Not only are the poor more venerable to extortion but also a critical fraction of any increase in wealth is captured through bribes, that makes getting out of the poverty trap even more difficult. The persistence of corruption also adversely affects social mores and people’s beliefs about the legitimacy of institutions, thereby perpetuating the belief among the poor that upward mobility is impossible and they abandon their struggle. Efforts over the last two decades to eradicate corruption have failed, to the extent that many development agencies have begun to allocate nearly a third of their budget to bribes. This paper argues that a major reason for the failure to eradicate corruption is that most efforts have ignored urban population density as the major driver of corruption. High urban population density while allowing for increased economic activity for the poor allows for more bribe taking opportunities. More importantly, it demonstrates to the poor than if they do not pay a bribe someone else is always available to do so. Communication of successful bribes is the key parameter here and it scales proportionately to population density. This paper also argues that most anti-corruption efforts have focused on the middle class while in reality most bribes come from the poor – not only as a percentage of transactions but also in net amount.
|Language of instruction, poverty, capabilities, and development
|In 2015 and 2016 South Africa experienced several students’ protests some of which were centered on the language of instruction. In at least two South African universities, the issue of contestation is whether these universities should have one medium of instruction, namely English, or more than one media of instruction. These struggles re-ignite the debate of the role of language in development. Relying on primary and secondary data sources, this essay will commence with the discussion of Ngũgĩ wa Thiong’o’s articulation of language as a means of communication and a bearer of culture. This paper will then discuss the role of language of instruction as a conversion mechanism, that is, a mechanism that facilitates the conversion of educational instructions into expertise. The paper will argue that in post-colonial countries such as South Africa, the languages of former colonizing countries play an obstructive role as they hinder the acquisition of skills. This paper will further argue that the use of the languages of former colonizing countries exacerbates inequalities and consequently contribute to deprivation of capabilities and increased poverty. As an antidote, this essay will advocate for the adoption of mother tongue as the language of instruction. I will argue that this measure will facilitate the acquisition of knowledge and expertise, reduce inequalities and poverty, and expand capabilities and development.
|Effects of Time Cost on the Trade Pattern
|This paper investigates the effect of time costs incurred while accessing the intermediate inputs on the trade pattern between primary and processed goods. I explore both the direct and indirect effects, arising through input-output linkages, of transportation infrastructure reforms on the trade pattern. Using a factor content methodology, I find that the indirect effects of improvement in timeliness in trade drives the comparative advantage in processed goods. To do this, I construct a measure for how intensively an industry demands for the timely delivery of its intermediate inputs across industries following the procedure carried out in Nunn (2007). To compute this measure, I use input-output tables, and Hummels and Schaur (2013)’s calculations of the ad-valorem tariff equivalent of consumers’ willingness to pay more for a good to be delivered one da y earlier. I find that what differentiates the primary and processed goods, on average, is not how intensively consumers demand these goods on time, but how intensively these industries demand their inputs on time. Therefore, I show that any country that has a higher ability to transport goods on time has a comparative advantage in industries that put a higher value on the timely delivery of their inputs, in particular processed goods industries. I implement a country’s geographical features and its neighboring countries’ infrastructure quality to address the endogeneity between trade and investment in transportation infrastructure. Further, I address the collocation effects due to the correlation between downstream industrial demand for intermediates and the time cost in accessing the inputs.
|Workshop: 4 Simple Techniques for a More Engaged Large Classroom, 9:45-11:15 AM. Room: AUD 430
|Workshop, 4 Simple Techniques for a More Engaged Large Classroom
|Large classrooms are some of the most difficult environments for engaging students. This workshop will go through 4 simple techniques instructors can use to promote student engagement in a large classroom setting. The techniques are as follows: (1) Designing homework assignments and quizzes to set up classroom activities; (2) using minute papers and short discussions to promote active listening among a wider range of students; (3) using small groups for complex discussions and problem solving exercises; and, (4) flipping segments of your course so that recorded lectures can free up time for group work in class.
|Economic Thought and Promise of Pluralism, 9:45-11:15 AM. Room: AUD 426
|Economics in the 21st Century: The John Bates Clark Winners
|Economics has the awkward distinction of being both the most influential and most reviled of the social sciences. The economic crisis that started in 2008 does not appear to have caused the discipline’s influence to wane, but it has expanded the number of its critics. Broadly speaking, the growing criticism from outside (and occasionally inside) economics centered on how the discipline lacked realism and used technique as an end in itself, instead of engaging with concrete economic realities and accepting a pluralism of approaches adapted to the complexity of economic problems. A fundamental component of the lack of realism is the lack of attention by the mainstream of the discipline to inquire about the economic influence of the most powerful people, institutions and corporations that dominate the decision making of the 21st century. This paper explores whether this criticism should be applied to the work of the new generation of economic superstars, who have established significant influence both inside and outside the discipline. The John Bates Clark (JBC) medal is given to the American economist under forty “judged to have made the most significant contribution to economic thought and knowledge,” and is generally considered the second most prestigious in the profession (after the Nobel Prize, which it sometimes foreshadows). We will examine the work of those that have won the award from 2001 to 2013. The winners of the JBC are significant because they represent the future of economics as defined by the discipline itself.
|The Scientific Practices of Economics and The Emergence of Behavioral Economics
|Behavioral economics emerged in the second half of the 20th century and has become an important social science research area. Some have argued that the emergence of behavioral economics (BE) amounts to a scientific revolution. That is, they argue that BE is becoming or has become the new, superior economic paradigm that will replace the neoclassical economics (NE) paradigm. To appreciate the emergence of BE, it is important to understand how the relationship of economic science to psychology and other social sciences has changed from Adam Smith’s time to the present. Another important part of the story relates to the scientific methods of NE and why behavioral economists (BEs) have been critical of them. Ultimately, the emergence of BE and its different strands is related to the efforts of BEs to create a broader, better economic science, a science that is more realistic, less narrow, less rigid, less intolerant, less mechanical, and less individualistic than NE. This article briefly considers the contributions and character of a number of major strands of BE and based on this provides a tentative assessment concerning whether the emergence of BE can be considered a scientific revolution.
|The Future of Capitalism: A Synthetic Analysis
|In Reframing Economics, I attempted to make the case that economics could be better understood as the study of imperfect cooperation rather than as the study of competition and its implications. This led to two further themes: first, that the various schools of thought in the history of economics – classical, Marxist, neoclassical, Austrian, Veblenian, Keynesian, and game theory – are complements rather than substitutes in economics understood in this way. Thus the book drew selectively from all those traditions, stressing continuities and commonalities. Second, the political economy of mature capitalism is based on a class-compromise between the capitalist and working classes. This essay investigates the future of capitalism in a similar eclectic and synthetic way. In effect the question posed is, what is the alternative cost of a transition to a more equal social economy? That is, what can we expect in the future development of capitalism, supposing no such transition takes place? In addressing this question we are following a trail broken by Marx, but Marx was using the best economic learning of 1850, and economists have learned some very important things since then, especially about the usefulness of markets and also their limitations. Further, the capitalist political economy we observe today is quite different from the one Marx observed in 1850 and the two decades that followed. Accordingly, the discussion will draw further on the ideas of Joseph Schumpeter, Sir Arthur Lewis and Franco Modigiliani, and the more recent work of Piketty, Stiglitz, Atkinson, and Summers.
|Raul Prebisch and the Surplus Approach: Connection and Implications for Development Economics
|Prior to Thomas Piketty (2014) Capital in the Twenty-First Century distribution was of secondary importance in our discipline. Most economists advocate some version of the marginal productivity theory of distribution, which implies that distribution is endogenously determined by the technical relations of production. This left little space to discuss alternative distribution theories and policies. For some economists, however, Piketty’s concern that the market system allows for several distributive outcomes, some more inequitable than others, causes no surprise. In fact, interest on this issue can be traced back to the classical conception of a circular flow of income a la Adam Smith, David Ricardo, among others. From this perspective, economics studies the extent of the surplus and its distribution, implying that there are always resources leftover after society guarantees its material production and reproduction. The distribution of the surplus is underdetermined unless non-economic factors are considered. In other words distribution is determined exogenously. The surplus approach was revived in the 20th century, when Cambridge economists showed that the marginal productivity theory is inconsistent with a two-or-more-commodity world and advocated the conservation of the classical circular flow. This paper will discuss two ways the Cambridge controversies relate to development economics. And analyze how, if at all, the debates in the 1960s and their implications for distribution theory impacted Prebisch’s (1984) self-proclaimed shift from a marginal productivity perspective toward the surplus approach. By 1956, Prebisch started to argue that the flaws of the economic system did not lie in private property itself, but rather in the private appropriation of the surplus. I would like to investigate, on the one hand, the connection, if any, between Prebisch’s theoretical shift and the Cambridge controversies, and on the other, the consequences this shift had on subsequent development theory.
|Inequality and Public Policy, 9:45-11:15 AM. Room: AUD 528
|Federal Wealth Policies in Support of Jim Crow: Using an Anti-Racist Perspective to Inform Political Economy
|Recognizing the specific ways that systemic racism has and continues to function in our society is essential to developing a political economy that effectively examines contemporary problems and issues, whatever they may be. This paper brings an anti-racist lens to examine past and contemporary federal wealth policies. Given the nature of wealth – its inherent durability and transferability across generations – this paper demonstrates how the current racial wealth gap is the result of past wealth policies that privileged Whites. Further, it demonstrates how our current policies are not simply encouraging the concentration of wealth among the 1 percent, but also recreating a system of racial segmentation. In a time in which overtly racialized policies and laws are often illegal, our wealth policies now function as a modern version of past Jim Crow laws and norms. The paper relies extensively on the Survey of Consumer Finances, the most detailed survey of household wealth, to document its claims. It also uses Joint Committee on Taxation data to demonstrate the impact of contemporary tax expenditures on the widening racial wealth gap. The paper identifies key elements of gaining an anti-racist perspective. In using this perspective to illuminate our current wealth disparities, it demonstrates how such a perspective can be use to examine a host of other issues and concerns as well.
|Coasebusters: Ethics, Justice, and the Theory of the Firm
|What to do about rising income inequality is one of the defining questions of our day. Yet even as leading economists from James Heckman to Thomas Piketty devote much time to the study of inequality, none so far have been willing to plumb the depths of theory to get at the root of the problem. One cannot expect democracy, fairness, and economic justice to spring unbidden from a structure that rests upon an inherently unequal foundation, the structure of the capitalist firm in theory and fact. We compare here the ethics and justice of the post-Coasean, post-Samuelsonian firm with alternative firm structures. We discover a puzzling resistance in the literature to deal with worker- and consumer-owned cooperative firms, whose success dates at least to 13th century Jura at the milk and cheese cooperatives. Firm structure is a fundamental cause of economic inequality and injustice. Most firms today are failing at the margin of ethics, we show, because they are organized unjustly, limiting the exercise and spread of democracy and economic virtue. The cooperative firm resonates more closely with leading ethical actors of economics, we argue, from Hayek’s “ends-connected tribe” and Smith’s “impartial spectator” to Marx’s “species being” and Folbre’s “visible heart”. We find that the goal of reducing inequality must go hand in hand with a push for the best vision of ourselves as ethical beings in our primary place of production, the firm.
|Investment expenditure of local jurisdictions in Japan in the 2000s
|In this paper, I analyzed the investment expenditures of local jurisdictions in Japan in the 2000s by examining the cases of different municipalities and obtained the following results. First, merged municipalities issued Special Merger Bonds and non-merged/depopulated municipalities issued Depopulation Bonds. Second, in nonmerged/nondepopulated municipalities, with the decrease in the total amount of investment expenditures, cities and some towns and villages began to focus more on works funded by grants and local bonds rather than on unsubsidized works funded by Road Bonds and other types of local bonds to which the public works modification could be applied. That is, in the past, the total amount of Road Bonds was the largest of all bond totals. However, this amount decreased as Road Bonds were replaced by School Bonds issued to supplement School Block Grants established during the Trinity Reform. Cumulative causation of Gunnar Myrdal can be applied to this changing process. In Japan, decentralization that specific grants for improvement in public school facilities were abolished and School Block Grants were established can increase public works for schools in cities and some select towns and villages with high financial capability indexes. This phenomenon is one of the outcomes of the Trinity Reform, an outcome that becomes invisible in the shadow of tax resource transfers and the reduction of national treasury grants and local allocation tax revenue.
|This is what a sour economy looks like
|Paul Krugman has characterized the U.S. economy as “sour”. Similarly, Larry Summers has been arguing that the U.S. economy has morphed into one of secular stagnation, one that is no longer capable of growing in the way that it did in the second half of the 20th century and that it won’t again unless we will generate another financial bubble. This lecture examines the current state of the U.S. economy and its many challenges including the productivity slowdown, the Fed’s inability to raise interest rates back to normal, the hollowing out of the middle class, the phenomenal increase in the income and wealth of the 1%, the 16% underemployment rate among African-Americans, and the decline in the labor force participation rate. All this gave rise to such social turmoil as we witnessed in Baltimore and Ferguson, Missouri, the rise in Trumpism and Tea Party, the catatonic Congress, the increase in suicides and drug overdose which led to an increase in mortality among whites for the first time in history with minor exceptions.
|Social Provisioning and the Pluralist Approach to Economics, 9:45-11:15 AM. Room: AUD 628
|The Social Provisioning Process and Heterodox Economics
|The social provisioning process is how heterodox economists define economics in general. Instead of having a narrow definition of what constitutes economics, such as the mainstream has with its allocation of scarce resources among competing ends via the price mechanism, heterodox economists have opted for a much more expansive definition that permits different theoretical explanations for ways in which the provisioning process can take place in different types of economies in different historical contexts. In this chapter, we first examine the changes in the definition of economics from classical political economy to neoclassical and heterodox economics. The comparison between classical political economy and neoclassical economics manifests a clear distinction in view of economy and economics. The second section substantiates the meaning of the social provisioning process. In doing so we make a case that, first, defining heterodox economics as the study of the social provisioning process positions heterodox economics as an alternative to neoclassical economics, and, second, that such an expansive definition of economics has potential to synthesize various heterodox theoretical frameworks in a constructive manner.
|The Public Sphere Without Public
|Once Adam Smith wrote that “No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe, and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed, and lodged.” Smith’s provisions for a better society remained idealistic, if not utopian, for a century and a half. However, the long Twentieth Century has witnessed both the emergence of a pluralistic public sphere which satisfies Smith’s provisions, and its abrupt decline. The emergence and decline of the public sphere can be traced back in income and voting participation statistics which they often, but not necessarily, share the same patterns. On the other hand, the reasons lying behind the birth and fall of the public sphere in Twentieth Century is not symmetrical; while its appearance is a matter of chain spontaneous phenomena, its disappearance depends on the one sided will of ruling elites who no longer need the participation of the masses neither in production nor in political decision making processes due to the pre-planned deindustrialization and financialization projects. As a result, the public have been exiled from the public sphere en masses, and could not resist to this exclusion since they have lost their coherence as a class. Thus, in the last quarter of the Twentieth Century, the Polanyian interrelatedness of society, capital and market relations have been reshaped and these entities have been re-formed at the expense of the former because of the unchallenged powers of the latter two. Consequently, in today’s contemporary societies, the collapse of Smith’s social provisions poses not only an economic phenomenon to be solved, but also an ideological question in Mannheimian sense. Therefore, this study’s aim is to explore the ongoing changes in modern-day public sphere.
|The Legal-economic Nexus in the 2010 Healthcare Reform
|Big institutional time lags are addressed by agencies of composite choice (Congress). If the prevailing ideology in society does not coincide with the dominant ideology in the agency of authoritative choice (courts), the latter will resist institutional change. With regard to highly ideologically contested socio-economic issues, judicial review easily gets personally biased because the Constitution does not include an economic theory. Therefore, infringement upon the rule of law is lurking in decision making regarding issues such as Obamacare. First, personal preferences might color judicial decision making. Second, this might become strengthened by legislators who file briefs in lawsuits. Third, judicial decision making might also become influenced through commenting by legislators and executives on issues that are pending for courts. Of course, all interests have the right to file briefs and to comment on judicial decision making, but claiming these rights should be balanced with the danger of violating the rule of law. An infringement upon the rule of law destabilizes democracies and weakens the countervailing role of the federal government. Therefore, judges should be reluctant to accept lawsuits with regard to the constitutionality of reforms of highly ideologically contested economic issues. Additionally, lawmakers and executives should abstain from commenting on judicial decision making concerning ideological contested laws. The self-assigned role of lawmakers to inform judges regarding their stance concerning highly ideologically contested issues could be taken over by economists.
|Unpaid Work, Paid Employment and Poverty: Evidence from the Levy Institute Measure of Time and Income/Consumption Poverty (LIMTIP/LIMTCP) Project
|Official poverty lines implicitly assume there is time available for unpaid household work among the members of poor households but do not account for time. The Levy Institute Measure of Time and Income/Consumption Poverty (LIMTIP/LIMTCP) addresses this inconsistency. We have to date produced estimates for Argentina, Chile, Mexico, Turkey, South Korea, Tanzania and Ghana. We find that in each country measured poverty is more widespread and the depth of poverty is greater than official estimates indicate. Further, our simulations of paid employment show that while jobs can in some cases move households out of income or consumption poverty, in most countries time-adjusted poverty rates are as high in the simulation as the actual estimate of official poverty. In many cases paid employment can help poor families escape poverty, but in many other cases, a transition to paid employment merely brings about increases in time poverty. Often those who escape income or consumption poverty in or simulations do so only to become time poor. We discuss the policy implications of our research in each country.
|Lunch Break, 11:15-1:15. On your own for lunch.
|ICAPE Board Meeting, 11:30-1:00 PM. By invitation. Room: Spertus Lounge
|Session 3: 1:15-3:00 PM
|Pluralistic approaches to teaching, 1:15-3:00 PM. Room: AUD 420
|Chair and discussant
|A new ‘culture of economics’ in secondary education – promoting ‘global discourse competences’
|In my paper, I will present the main pillars of an integrated curriculum for a more comprehensive approach towards teaching economics in secondary schools. I earmark to engender so-called ‘global discourse competences’, which go far beyond mere mainstream competences in orthodox economics. Waxing voices mainly by representatives of the private economy and lobby groups constantly express concern about declining economic competencies amongst young people. They suggest to include economics as a separate subject into the school curriculum in line with business-oriented and orthodox approaches, in order to alleviate this roundly acknowledged deficit. I however believe that their proposal is counterproductive in terms of preparing students for the manifold global challenges of the future, thus circumventing the positive opportunities globalization concurrently offers. Instead, I will argue for a new interdisciplinary approach to economics, with contents of, inter alia, politics and Culture treated pari passu, as a more than a viable alternative for equipping students with competencies beyond orthodox economics. Challenging prevalent rational choice models of teaching economics as a nostrum has been critically analyzed and mostly applauded by students, as my action research shows. Global discourse competences, closely juxtaposed to education in global sustainability, also blends bilingual language education into this rather humanist approach to economics. Foreign language learning as integral part of this concept renders the students’ ability not only to take different perspectives on globalization, but also increases their ability to participate in discussions together with the transnational civil society and embrace cosmopolitanism and multiculturalism at the same time as an ultimate and desired outcome (“unity in diversity”). I understand this full-fledged teaching approach as a counterhegemonic move to the deeply-embedded neoliberal globalization in education. The approach I will suggest thus intends to antagonize developments directed against global democracy, and to support initiatives for more global justice and solidarity.
|Homo Economicus: Queer Pedagogy for the Pluralistic Introductory Economics Classroom
|This paper argues for the usefulness of queer pedagogy for pluralistic introductory undergraduate economics courses. Shackelford (1992, p. 21) writes in her discussion of feminist economics pedagogy that “how one teaches is as important as what one teaches.” Similarly, queer teaching methods can be applied to pluralist content in the introductory economics classroom to create an environment where students feel empowered to think critically about a range of competing explanations for economic phenomena. Queer teaching methods have much in common with other critical pedagogies—moving away from a top-down approach where knowledge is transmitted from instructor to passive student toward a learning environment where knowledge is co-created. Queer pedagogy takes this one step further, fostering a classroom environment where students can begin to consider what knowledge and topics they resist and why, what is “normal” and why, what topics are included/excluded and why (Luhmann 1998, 148). Queer pedagogy is not about self-esteem or identity politics, but is instead a process of attempting to understand how subjects are formed in various contexts. Talburt (2000, p. 10) writes, “to my mind, the most provocative aspects of queer lie in its uncertainty, its strangely relational and contextual nature and its inability to offer final or complete knowledges.” This uncertainty and subversive nature of queerness has much in common with the pluralistic approach to economics, introducing complexity and an acknowledgement of having an incomplete set of answers. Queerness is difficult, complicated, subversive, and unknowable. This understanding of queerness, as a utopian approach to subverting identity itself, can be used as a springboard for the teaching methods that might be used to help students challenge economics material and its assumptions, to think critically about an assortment of approaches to economic thought, and to evaluate the relevance of the conclusions to their lives and experiences.
|Class Debates as an Instructional Tool in an Intermediate Level Neoclassical Microeconomics Class: Introducing Pluralist Perspectives
|This paper proposes the use of class debates in an intermediate level neoclassical microeconomics course as a way of introducing undergraduate students to pluralist perspectives, political economic processes, and policy analyses. Understanding the neoclassical framework is accorded great importance in intermediate microeconomics courses. Neoclassical microeconomics provides a foundation for subsequent applied courses such as labor economics, public economics, or health economics. More crucially, however, understanding the key assumptions underlying neoclassical microeconomics is essential in order to recognize its limitations in applying to the real world, and as a pre-requisite to building a pluralist understanding of economics. This paper utilizes data from class debates in three semesters of an intermediate level microeconomics course taught by two instructors in a liberal arts milieu. Three allied activities were carried out: participation in the debate, a learning self-assessment survey, and a five-page memo providing a balanced analysis of the policy conundrums surrounding the issue under discussion. Findings show that the debates allowed students to: critically analyse and interpret economic data, apply economic reasoning to the analysis of current policy debates, appreciate the limitations of neoclassical microeconomics in real world situations, and understand the ethical dimensions of economic dilemmas.
|A Nutty Model for Teaching Macroeconomic Models
|This pedagogical note draws attention to Basil Moore’s peanut multiplier theory of income determination and argues that it is a useful tool for teaching macroeconomic models and a critical understanding of them. The peanut multiplier theory can be used to teach the essential elements of any macro model, the manner in which the internal logic of a model can be explored, and the manner in which external critiques of a model can be formulated, all within an ideologically neutral yet still memorable context. A critical understanding of the peanut multiplier theory also lays the foundation for a critical understanding of standard macro models like the simple Keynesian theory of income determination, quantity theory of money, and money multiplier theory. Student feedback provides evidence of the effectiveness of using the peanut multiplier theory to teach macro models.
|Need for New Paradigms in Teaching Economics
|This paper argues that the current world view that dominates in policy circles, in the media, and among economists focus excessively on simple models of perfect competition with fully informed rational agents which yield misleading results when applied to the real world. I argue that given that perfectly competitive markets are of negligible importance today, the default model in applied work should be one that incorporates oligopolistic market structures with imperfect information and bounded rationality. The paper proceeds to outline the structural problems with the economy today namely endemic underemployment, negative market clearing interest rates, and endemic deficits. We should make the students aware of these challenges from their first exposure to the discipline.
|Puralistic approaches to research, 1:15-3:00 PM. Room: AUD 430
|The Glorious Revolution, Economic Institutions & the Developing World
|This paper critically examines the relative merits of New Institutional Economics (NIE, hereafter). The paper sketches how the Glorious Revolution, a seminal event in British economic and political history, has been analyzed by NIE. Using material from economics, history and political science, this paper argues that the NIE analysis, in general, and that of the Glorious Revolution, in particular, shows a considerable amount of theoretical weakness. In place of NIE, the paper forwards the critical institutionalist method to present a comprehensive institutional analysis of the Glorious Revolution. The paper also underscores the changing nature of resource distribution and culture in Britain as key variables. Finally, the paper also highlights the role of the “Whigs” as key agents in bringing about the events associated with the Glorious Revolution.
|The Reproduction of the Empire of Capital through Incursions of Capitalist Processes into Non Capitalist Economies since 1989
|With the ‘Autumn of the Nations’ and the dissolution of the Soviet Union, 1989 is an important year in world history. By then, the idea that the most efficient outcomes can be achieved if collectively held resources can be privatized had already captured the Gramscian common sense of most political commentators. The world was characterized by multiple sovereign states under pressure from the Washington institutions and the hegemony of the US dollar to open up their labor, resources and markets to American capital. Later, with the secular stagnation within the USA in the 1970’s, large and rapid movements of finance capital became characteristic of the neoliberal era. The 1990’s saw a revival of the classical concept of jus ad bellum which led to the ability of states, particularly the United States, to justify force in defense of peace. Also, by the 21st century, global production had begun a shift to low wage countries such that capital which had now become transnational, could exploit labor globally leading to a race to the bottom in global living standards. These global trends led to questions about how the world order is reproduced in an era of neoliberalism. This paper makes a contribution to the existing literature by laying out a model of the Empire of Capital as a social totality using the incursions of capitalist processes into non capitalist processes (the contemporary expression of ‘primitive’ accumulation as a historical, continuous, on-going process) as an analytical entry-point.
|Power and Environmental Quality – Political Economy of Environment Revisited
|Political economy of environment scholars identify power as an important determinant of a society’s environmental quality, as powerful interest groups can influence environmental policy. The purpose of this essay is to address: (1) how to characterize the relative power among the polluters, regulators, and the popular class; (2) how the characterize the strategic interactions among such environmental stakeholders; (3) what is the role of power in such strategic interactions; (4) how strategic interactions among environmental stakeholders with different relative powers impact or determine a society’s environmental outcome. In current literature, power is dealt with inadequately: (1) most literature focus on the influence of business on policy makers, while leaving out another important environmental stakeholder – the popular class; (2) most literature doesn’t directly measure relative power in environmental matters, but use proxies; (3) most literature treat power relationship as one-dimensional, e.g., how powerful groups can influence the policy makers, but leaves aside how environmental stakeholders interact strategically, and how that tri-party interaction among regulators, polluters and the popular class impacts the environmental quality. In this essay, I utilize the theory of power advanced by Boyce, Harsanyi, Bowles and Gintis, Lukes, and Rausser, Swinnen and Zusman, while also draws on political science analysis of state infrastructural power (such as those from Migdal and Waldner) which situates state’s power in relation to the economic elites and the popular class. After the theoretical analysis, this essay directly measures relative power in environmental matters, and econometrically tests the relationship between relative power and environmental outcome using data from China’s provinces. This essay distinguishes from the existing literature by (1) measuring the amount of power directly; (2) linking polluting to amount of relative power; (3) focusing on incentive and strategic interaction; and (4) avoiding specifying a social welfare function.
|Radical Political Economy in Three Parts
|This paper presents, contrasts, and discusses the modern standing of three schools of thought within radical political economic theory: the Marxism of Resnick and Wolff; Classical Institutionalism; and heterodox theories within Feminist Economics. These three schools arose in response to the lack of an analysis of power in orthodox economic theories. By ignoring or assuming away social relationships and power dynamics, mainstream economists resign oppression to the realm of social or political institutions disassociated with economic relations. Marxist, Classical Institutionalist, and Feminist economists have developed powerful tools for analyzing oppressive power relations between economic actors which enable a more holistic and just understanding of modern economics. By presenting specific influential theorists in each school, I hope to promote the incorporation of these ideas into mainstream economic theory.
|Poverty and Vulnerability: Income, Education, Health & Social Costs (ASE), 1:15-3:00 PM. Room: AUD 426
|Community Factors Affecting Girls’ Education in Burkina Faso: Child Marriage, Gender Roles, Cost, and Perceptions of Schools
|This article examines community-level factors that negatively impact girls’ education opportunities in Burkina Faso. The focus is on rural areas where girls tend to have the lowest levels of education attainment. Using in-depth qualitative and small survey data, we discuss the root causes of the gender gap in education across three communities. The sociocultural factors that influence education opportunities at the local level include child marriage, expectations about gender role, cost, and perceptions regarding risks of harassment of girls by teachers or peers in schools. The findings however suggest a substantial level of heterogeneity in the factors that impact education attainment in the three communities. This heterogeneity in local community conditions must be considered when planning development interventions and engaging through programs and policies.
|Working, but Not Well: Effects of FDI on Rural Labor markets in Uganda’s Coffee Sector
|This article examines how Transnational Corporations (TNCs) in Uganda’s coffee sector take advantage of significant gender and ethnic divisions in rural labor markets to weaken labor and expand accumulation. While coffee continues to be Uganda’s most important export commodity, value-addition by domestic producers remains limited and the sector is highly dependent on foreign investment to process exportable green beans. The dominant market power of few TNCs and Uganda’s weak implementation of employment protection legislation contribute to a labor regime characterized by close intersections between culturally legitimized gender- and ethnicity-based inequalities and a standardization of employment relations based on high job insecurity, wage rates at or below subsistence level and poor work-place safety. Based on extensive survey and ethnographic data and interviews with employers and government officials, the author argues that the prevailing system of labor regulation in one of the most technically advanced employment sectors in rural Uganda utilizes and reinforces pre-capitalist social relations, thereby creating highly segmented rural labor markets with low labor mobility and a lack of formal labor organization. The author also provides evidence of sporadic labor action among coffee workers and widespread cooperative organization of small-scale coffee farmers, many of whom engage in seasonal wage work for coffee-processing TNCs. Thus, while capitalist development in Uganda’s coffee sector is largely compatible with worsening forms of gender and other social divisions, the presence of viable producer organizations among farmers-cum-workers displays a potential for spill-over effects to existing forms of informal labor organization that can strengthen rural labor representation.
|Kassia Antoine, and Konstantin Wacker
|Human Capital and Shared Prosperity: Some Cross-Country Evidence
|Many low-income countries have high ambitions and socio-economic needs to achieve substantial income growth, especially for the poorest income quintiles. While studies investigating determinants of GDP growth have been numerous, less is known about factors influencing household incomes at the lowest segments of the income distribution. This paper estimates income drivers for the poorest two income quintiles from cross-country regressions, based on data from 117 countries between 1967 and 2011. The results suggest that maintaining macroeconomic stability as well as investing in physical and human capital (health and education) would not only accelerate overall economic growth, but benefit more particularly the poorest segments of the population. There thus need not be a trade-off between inequality and growth. Economies can foster faster growth while also increasing inclusiveness, ensuring that everyone can live up to their potential. The paper also investigates alternatives indicators of education (e.g. primary enrollment, number of years of schooling, education Gini) to get a better understanding of the transmission channels to faster income growth for the poorest two quintiles.
|Bringing Social Costs Back Into Labor Economics: Theory and Practice
|Many costs of production are “socialized” by shifting them to workers, their families, or the public sector. One example is neglecting safety, which results in injuries, disease and death. Another is the failure of wages, especially the statutory minimum, to match inflation and productivity growth. This leaves many workers unable to meet basic needs without assistance. Yet neoclassical labor economics does not provide a framework for understanding growing social costs and their ramifications. With substantial material in documentaries and on the internet to illustrate these costs, it is relatively easy for pluralist teachers to add examples to a labor economics course. But it is not sufficient to present these anomalies to the competitive market model and expect that students will then see all the neoclassical labor market model’s weaknesses. Pluralist economists need an alternative theoretical model to present to students: one that will explain the shifting of private production costs onto society. This can be found in the institutionalist economics of John R. Commons and William R. Kapp, in particular, as well as in works by other institutionalist, feminist and social economists. Kapp influenced ecological economics theory of social costs related to nature. This has much to contribute to a theory of social costs related to work and pay. This paper will reference useful materials that can illustrate work-related social costs. However, its’ emphasis is on a theory of social costs which can be presented to undergraduate students and is understandable to the general public.
|Advances in Feminist Pedagogy, 1:15-3:00 PM. Room: AUD 320
|Session Chair and Discussant
|Zarrina Juraqulova, Andrea Ziegert
|Why Economic Conversations Do Not Change: A Case Study of the AEA Annual Program
|Ideas change as a result of conversations. The more diverse the identities of those human beings engaging in particular conversations, the more likely new ideas will emerge: So too with the economics profession. Since 1972, the Committee on the Status of Women in the Economics Profession (CSWEP) has tried to integrate women into the economics profession because its members believed that getting more women economists would change the content of the discipline’s conversations. And indeed it did in many respects. But did it change the narrow theoretical perspective of the profession? CSWEP put a lot of effort into getting women on the program at the American Economic Association (AEA) annual meetings. It was important to the efforts of both increasing the number of women in the profession and hopefully integrating women into the canon. Being a woman, however, is just one of the many identities that professional economists possess: social class, as approximated by educational attainments, is another. If being educated at Harvard (class) increases the likelihood of being accepted on the AEA annual program whether a participant is a man or a woman (gender), than the importance of increasing the number of women engaged in economic conversations may not change the conversation at all. A more pluralistic approach to economics may be inhabited by the class backgrounds of those engaged in the conversation regardless of gender, race, or nationality identities to name a few. This paper examines four, two-year cross-sections cohorts drawn from the participants of AEA Annual Programs (1982 – 2014) and their demographic backgrounds to determine first whether the presents of women on the AEA annual program has increased; and two, whether the presence of women has changed the class structure of the program participants. Using data obtained from copies of the AEA Annual Programs, this study finds that a few economic departments still dominant the conversations at the AEA Annual meetings despite the increase in the number of women involved.
|Social Reproduction: A Marxian, Ecological and Feminist Political Economy Triad
|The precariousness of the working classes in a globalized economy has intensified as environmental problems manifest themselves unpredictably. At the same time, survival and means of survival are simultaneously being feminized and commodified thus posing a contradiction. Yet, analyses and solutions offered by mainstream economics continue to rely on individualist ontology predicated on a market calculus. Such an approach offers piecemeal solutions that do not address underlying social structures of class and gender. Further, it proffers a solutions to global climate change, which threaten to exacerbate the precarity of the working classes. On the other hand, Marxian, Ecological and Feminist political economy approaches offer us insights into the most pressing problems of capitalism – exploitation, ecological crises and the crisis of care that form the crux of the crisis of social reproduction. While each approach is concerned with aspects of social reproduction, it is the dialogue between these three approaches that offers a more nuanced and enriched understanding of the current human condition. In this paper, I extend a pluralistic understanding of social reproduction incorporating the aforementioned schools of thought. I argue that such an approach allows students to articulate their own concerns of inequities pertaining to race, gender and class.
|Using the Evolution of International Trade Theories and Feminism to Teach Comparative Advantage
|This educational note shows how to use the evolution of international trade theories and feminism to teach comparative advantage. Comparative advantage is a powerful concept that usually appears in the second chapter of any intro-level economics classes; however, it has been a difficult concept that many students struggle with. Instead of using the traditional example about you and your neighbor picking apples and cherries, I put it in the context of international trade and feminism. Comparative advantage is the basis of international trade. This conclusion is usually directly provided by the textbook; however, it is not reached overnight. Therefore, it is necessary to make students understand why countries trade by showing them the evolution of international trade theories from Mercantilism, Adam Smith’s Absolute Advantage Model, and eventually David Ricardo’s Comparative Advantage Model. Although countries no longer focus on piling up gold and silver today, mercantilist thinking is very alive. It now has a sharp focus on employment. There are many neo-mercantilists on TV and newspapers especially in the U.S. that misguide students’ thinking. They believe that exports are good because they create job in the country; while imports are bad because they take jobs away from the country and give them to foreigners. They continue to consider international trade as a zero-sum activity. Their thinking would attract students’ attention as many of them are interested in the job market, and it also lays a foundation for the absolute advantage model and comparative advantage model afterwards. The Absolute Advantage Model reveals that trade is a positive-sum activity: world output will increase if countries specialize in their absolute advantage products. However, if absolute advantage is the basis of international trade, then two countries should not trade if one country has an absolute advantage in producing both products, which is incorrect. Then it is time to bring the David Ricardo’s Comparative Advantage Model onto the scene. Teaching the concept of comparative advantage could also be from a perspective of feminism. Marriage can be considered as a trade where the more different the comparative advantages between husband and wife, the greater the mutual benefits to marriage. With more and more women entering the labor market in the recent several decades, men are gradually losing their comparative advantage in the labor market. Due to less gain to marriage, divorce rate would increase. Given a higher probability of divorce, women’s incentives to specialize in the household would reduce. This would in turn further reduce gain to marriage and increase divorce rate, which is a vicious circle. The feminism perspective also points out the risks of specialization, which enriches students’ understanding.
|Learning Marginal Analysis by Doing Marginal Analysis on a Balloon
|This exercise, in the feminist economics pedagogical tradition of learning economics by doing economics (Nelson, 1995), allows students to physically confront the marginal tradeoffs that are inherent in many economic situations. This hands-on multi-class exercise is designed to help students with limited mathematical training better visualize how economists represent three-dimensional surfaces in two dimensions as indifference curves, isoquants and isoprofit contours using a balloon. Many students study microeconomics with limited formal mathematical training in analyzing multivariate functions. (Introductory microeconomics texts often relegate multivariate functions (such as indifference curves that allow ready comparison across goods or production functions of multiple inputs such as capital and labor) to appendices. For the same reason, many intermediate level texts relegate calculus to footnotes and appendices.) Despite this weakness, the marginal analysis that is at the core of microeconomic analysis requires that we teach students to think in terms of marginal tradeoffs and to understand how these tradeoffs must be balanced to achieve an optimal outcome. Although developed for a managerial economics class, one could use this exercise in introductory level classes for those without a background in calculus by simply ignoring the footnotes. The exercise protocol provides detailed instructions for building the balloon as well as how to use the surface of the balloon to model economic concepts such as marginal product, the economic region of production, and marginal rate of technical substitution (and their consumer side counterparts). Instructions show students how to find and interpret a point where x is more valuable than y and to compare that with the reverse situation. This protocol concludes with instructions allowing students to analyze constrained optimization visually including what the tangency condition implies regarding the marginal tradeoffs inherent in the constrained optimal solution.
|Marxist, Post-Keynesian Approaches to Growth and Development, 1:15-3:00 PM. Room: AUD 528
|Exogenous vs. Endogenous High-Powered Money in Keynesian Monetary-Growth Models
|Alfred Eichner, Nicolas Kaldor, Marc Lavoie, and Basil Moore were among the early members of the modern Post Keynesian school who were consistent advocates of endogenous high-powered money. Today this tenet is an implication of stock-flow consistent (SFC) macroeconomics (Godley and Lavoie 2007 , pp. 127‒128) and a key part of Modern Monetary Theory (Wray 2015 ). It is not always a part of first-rate models in other modeling traditions, including heterodox models of monetary growth. We seek to make two points in this presentation: (1) the exogenous money view is still common in nonlinear, continuous-time monetary growth models; and (2) the endogenous vs. exogenous money question does affect the dynamics of models in substantial ways. It may be that with the commonness of belief in endogenous money, this field is one of the last redoubts of exogenous high-powered money. We compare the short-term dynamics of the Kaldor-Kalecki-Steindl fiscal policy model in Hannsgen (2014) with a similar model that includes an exogenous monetary growth rate and an interest rate determined by the money demand curve and the supply of money relative to the capital stock. Our simplified model leads us to rely on the Godley effect of government interest payments as the sole link between interest-rate policy and aggregate demand. We compare the stabilizing properties in each model of “functional finance” and “sound finance” fiscal policy rules. In the Kaleckian tradition, we use a unified capitalist sector, while our MMT approach to money leads us to use a consolidated public sector that includes the central bank. Hence we have a 3-sector model. The new exogenous money model possesses differential equations in public spending, capacity utilization, and the stock of government debt. On the other hand, as in Hannsgen (2014) and Hannsgen and Young-Taft (2015), the baseline endogenous money model has no role for a government debt variable. We may consider a variable markup, which adds an additional equation to the model. We seek to focus on a tractable and simplified model capable of giving insight into the key monetary issues. We will look at some examples of the pathways generated by example models using Wolfram interactive CDFs. Also, the paper will explore the possibilities suggested by the model, using various mathematical results from differential equations.
|Reconsidering Financialization: The Role of Households
|Through health insurances, mortgages, pension funds and student loans, the financial world is gaining dominance in the private sphere and households have to bear more economic and financial risks. Gone is a distinction between consumption and accumulation. The home has become an investment object (by exploiting increases in house prices) and a source of finance (by using equity withdrawals). Households live the paradox of being expected to adopt a positive attitude towards risk while at the same time behaving financially responsible. They are called upon to behave as entrepreneurs, i.e. as sui generis portfolio managers, by actively managing assets and liabilities and optimizing their portfolio through ‘rationally’ calculating risk and return. Nevertheless, they do not have the same rights as corporations. Due to this conflict and the rising impact of households’ financial behaviour on not only micro-economic outcomes but also on the macro-economy, this paper seeks to explore how financialization is lived in everyday life. Previous research has tended to focus on macro-structural aspects such as rising household debt due to rising inequality, financial deregulation and welfare state retreat (Post-Keynesian literature) or centred around the construction of financial subjects with the help of surrounding financial discourses and practices (Financialization of Daily Life literature). Bringing together these aspects with qualitative empirical research may result in a better understanding of how finance is lived in daily life. Therefore, this research integrates macro-structural and micro-interactional aspects and explores UK households’ financial identity, as reflected in financial practices. This is done with the help of a qualitatively driven mixed methods approach supplementing semi-structured interviews with households and a review of secondary sources with quantitative descriptive analysis. The objective is to provide insights into how households interact with finance and if they contest or conform to their rising financial responsibility by incorporating a portfolio view.
|A Lewisian or Marxian Turning Point in China? A Critical Evaluation of Theory and Evidence
|In recent years, the discussion about the Lewisian Turning Point (LTP) in China emerged in orthodox economics and had an increasingly significant influence on policy making. The key hypothesis of China’s LTP is that the economy is experiencing a transition from sufficient to insufficient labor supply due to demographic changes, i.e. the decline in the fertility rate and the aging of the population. We critically evaluate the LTP hypothesis and find it has oversimplified Arthur Lewis’s theory. Moreover, the LTP hypothesis so far has been examined only with indirect evidence but not with direct evidence. We argue that the indirect evidence cannot prove the existence of the LTP hypothesis. We establish a simple two-sector model within a Marxian framework, analyze the conditions that may lead to a turning point in the model, and empirically examine whether there is a Marxian turning point in China.
|Marx’s Theory: Evolutionary or Revolutionary?
|The purpose of this article is to investigate from a scientific viewpoint whether Marx’s theory is evolutionary or revolutionary by analyzing some main texts of Marx such as The Capital, The German Ideology and The Eighteenth Brumaire of Louis Bonaparte. The idea was first seen by this author in the book of Alvin Gouldner, The Two Marxisms. Contradictions and Anomalies in the Development of Theory (Gouldner, 1980). This is a crucial insight which will take into account new developments in both theory and practice. Gouldner confronts Scientific Marxism with its emphasis upon the laws of development against Critical Marxism with its stress upon practice and critiques. The parallel question to be hereby addressed in terms of documentary analysis is: Is socialism to be attained by means of struggle or by means of development? This question has been addressed in some realms of non-Marxian economics as a critique of the scientific research program of Marx and Engels. This is hence a fundamental Marx’s topic related to his method and especially to his use of dialectics in his quest for the overcoming of capitalism and ultimately for human emancipation. The assumption is that success in development is related to the fastness of change.
|Session 4: 3:15-5:00 PM
|Pluralistic teaching and curricular design, 3:15-5:00 PM. Room: AUD 420
|Revisiting Commodity Fetishism: ‘Food Systems” and The New Literature of Food Labor
|This essay examines the rise of the interdisciplinary field of food studies and the alternative “local” food economic culture that has gained so much momentum in recent years. Food studies investigates “food systems,” focusing largely on issues of environmental sustainability and the ethical treatment of animals. Only recently have issues of labor and social justice come to the fore. The paper looks at how the anti-corporate ethos of food studies and local food movements, and the progressive sensibility of food systems scholars, has breached what Marx called the veil of commodity fetishism, i.e. the inability of participants in capitalism to recognize the social relations of production behind every commodity’s appearance in the market. The critique of the corporate capitalist food system that gained force in the years since the publication of Fast Food Nation fifteen years ago and Omnivore’s Dilemma ten years ago has pierced the veil of commodity fetishism, but only partially so, in that most embrace a concern for externalities like high carbon impact, unhealthiness of corporate produced food, and the unethical treatment of animals with labor as an afterthought. This paper narrates the rise of the local food movement and the rise of the food studies field, and looks closely at the turn to labor represented by the work of author activists such as Saru Jayaraman and Margaret Gray, and social movements like the Fight for Fifteen. I conclude by stressing the political opening these developments offer for radical political economists to push both localist food culture and the academic study of food to address issues of class and labor, drawing on the author’s experience in building a new food studies program.
|Teaching Applied Political Economy: Less Ideologies and More Actions, at least on surface…
|People tend to face following challenges when teaching political economy at undergraduate level: 1) The trade-off between depth and breath; 2) Students’ resistance to many ideas in political economy due to pre-existing beliefs; 3) The appearance of “inapplicability” of theories of political economy; 4) The tendency of being a course that focuses too much on criticizing the mainstream economics. In this paper, I will share my experience of teaching an undergraduate seminar called “Growth, Distribution and Instability”. The goal of this course is to develop new insights on a set of modern economic phenomena such as uneven development, income inequality, business cycles and financial crisis by bridging modern quantitative methods with brilliant ideas from classical political economists – Smith, Malthus, Ricardo and Marx. Since this is not a history of economic thought course, students have to study some classic secondary literatures focusing on applying ideas in classical political economy. An important part of their grade is a group project on some advanced topics in political economy designed and assigned by me. These projects are empirically driven but all backed up by theories in political economy. For example, one of the groups had to first conduct a detailed review of literature on Malthus’s theory of population as well as the criticisms of this theory, and then they had to download world income and fertility data to study the income-fertility relationship as well as projecting the population stabilizing level of world population and income. I argue that: 1) A course like this one, if designed and taught correctly, one can find a good balance between depth and breath; 2) Its applied and problems solving nature eliminates the “inapplicability” criticism and might also minimize the preconceived negative notion about political economy; 3) Ideas in political economy are presented as self-sufficient applicable theories that do not rely on criticizing the mainstream economics. However, I also argue that a course like this one cannot and should not replace the history of economic thought course in a curriculum.
|Developing heterodox approaches in economics: How to cooperate at international level in the present phase of internationalisation? Questions drawn from the French experience
|Mainstream economics has remained hegemonic and even reinforced its positions despite its responsibility in the global financial crisis starting in 2007 and in the failure to design relevant policies to get out of the impasse in which the world economy seems to be trapped. Part of the explanation has certainly to do with broad political power struggles. Part is also related to weaknesses of the heterodoxy itself. While mainstream is able to propose worldwide a consistent, flexible and rather unified framework (even if unrealistic), non mainstream approaches remain heavily fragmented and national, not taking much advantage of ongoing trends of internationalisation. While mainstream has developed a strong tool of selection and reproduction through a network of “key” academic journals, critical thinkers in economics seem to loosen their international connections and their journals are having hard times to cope with increasingly orthodox biased rankings. Paradoxically, heterodox economists may have been too individualistic in developing their ideas and did not devote enough thinking to the reproduction and development of their field in times of growing internationalisation. In parallel, mainstream economists have argued that mainstream internal diversity could be considered as a pluralism per se. Our contribution would try to assess how these issues can be seen in the case of France. While many heterodox economists have retired or will retire very soon, various initiatives have been developed in order to save the pluralism in economics. A national association of researchers has been created in 2009 (AFEP) and a national association of students in 2011 (PEPS) which has participated to the foundation of an international network in 2004 (ISIPE). These structures have had successes and failures to change the institutions and to contribute to the survival of heterodox economics. This contribution will analyze the strengths and limitations of national struggles in the French context. It also assesses the strategy of one of the major French lab in heterodox economics (CEPN) and derives proposals for a strategic alliance for pluralism in economics. In particular, the case study of the “EPOG” Erasmus Mundus Master’s programme will be developed. It shows the importance of such a programme (i) to attract and train excellent students (and future researchers) from all around the world, (ii) to institutionalise partnerships between universities and labs with an effect of mutual reinforcement, (iii) to develop a more integrated approach of the various heterodoxies, (iv) to stimulate various levels of interdisciplinarity (including management, social and computer sciences). This experience discusses the conditions and relevance of a possible replications of this experience. It discusses in particular the complementarities with other key initiatives in a context of profound reforms and mutations of Higher education since 20 years.
|Power and Public Policy, 3:15-5:00 PM. Room: AUD 430
|How Happiness can lead to more Efficiency: A New Paradigm Adapted to the World Knowledge Economy
|Over the last 20 years, the world economy has evolved at great speed. Globalization induces rising competition and the Knowledge Economy induces rising cooperation. On these evolutions, the gap between being potentially happy and the reality of happiness has never been as wide as today. For a long time, the assumption made by the philosophers and the economists is that the progress involves happiness and the increase of wealth is a condition to be happy. However today, more and more economists and psychologists suggest on the contrary that happiness is a condition for efficiency (Helliwel, Layard, Sachs, 2016). The objective of this study to analyze how, in a world knowledge economy, the mainstream economics’ assumption can be usefully reversed for reaching higher efficiency for all the actors. The theoretical basis of this research is thus lying to the efficient wages theory of Stiglitz (1984) and blending with the recent developments in happiness approach (Csikszentmihalyi, 2006, Goleman, 2013). In an inclusive economy, the paper proposes to use the Lundvall learning economy analysis, the Porter strategic choices, the positive psychology with the work of Langer and the behavioral economy developed by Kahneman. All these pluralistic approaches can be gathered into a complexity approaches developed by Atlan and Morin during the sixties and the seventies then largely diffused by Le Moigne during the nineties and the twenties. First, the paper analyzes how recent world changes evolve to use the complexity approach to use qualitative inter-dependences between rationality and emotion to reach rising economic and social efficiencies. Second, the study demonstrates that the individual happiness strategies of the agents also induce long run innovations for the society as a whole. Third, the paper proposes some concrete short run actions to reach greater individual and collective well-being and efficiency in a knowledge economy.
|Private Rent Seeking and Asymmetric Power
|The paper defines private rent seeking as search for payoff maximization through non-Pareto improving trades in market exchange, and considers the role asymmetric power plays in this process. In simple textbook treatment of bilateral exchange, whatever the differences in their respective bargaining power traders always end up on the contract curve maximizing the exchange surplus. That assumes that traders are either price takers or bargaining cooperatively. However, power asymmetry, if sufficiently large, can incentivize the trader with greater bargaining power to switch to uncooperative bargaining to raise his/her payoff while the exchange surplus falls short of its potential. Using game theory the paper specifies the quasi-rents asymmetric power can create and the payoff maximizing strategic behavior it incentivizes for the powerful trader. Two examples of private rent seeking are considered: in labor markets and the information sector.
|A Social Interaction Model for Corruption
|Corruption is a destructive phenomenon that characterizes most developing economies and severely slows development in countless ways. A particular incidence of corruption is the bribery that often links bureaucrats and large industrial firms. This paper applies the canonical social interaction model to study the outcomes of bribery and corruption in this regard. The paper draws on some ideas of statistical mechanics including entropy, temperature and the Gibb’s or Boltzmann distribution. The action of the ‘n’ identical firms in this framework is to make a certain bid with an aim to get a particular license and engage in a profitable project. There is one government official who is entrusted with the responsibility to award the license to the highest bidder, using a first price auction. The firms exhibit entropy constrained behavior and their bid placing strategy is a logit quantal response owing to the corrupt or “inattentive” nature of the government official. The inattentive nature of the official restricts the perfectly rational decision making ability of firms. The inference is that as the government official is more corrupt and erratic in awarding licenses, the amount of money that the typical firm is willing to bid decreases substantially. This means that the more unreliable the official is, the less likely a given firm is to get the license even if it is the highest bidder and therefore this decreases their incentive to bid in the first place. This implies that due to one corrupt official, the industry or market itself looks unattractive and dissuades investors. For large development projects like highways, communication infrastructure or the extraction of natural resources, this could have severe efficiency consequences for the economy as a whole.
|Instinct, maladaptation, & economic policy-making: the case of obesity
|We do no talk about much “instinct” in social sciences as if it is demeaning to our intellect. In this paper, we would like to highlight another dimension to human behavior that operates at a sub-intentional level and is thus rather “instinctive.” The term “instinct” refers to a set of natural competencies developed through natural selection such as experiencing moral outrage. One way in which evolutionary psychology supplements economics is by predicting what objectives individuals are likely to have. In other words, evolutionary psychology helps bridge “instinct” with “choice.” Accordingly, we tend to get pleasure from activities and consumption behavior that would have helped our predecessors to successfully survive and reproduce. The natural inclination to seek sweet things, whose excessive consumption can lead to obesity, is a perfect case in point: an instinct that was adaptive earlier in the human evolution where calorie-rich foods were scarce has become maladaptive under modern conditions. Such an insight would make, for instance, soda tax much less appealing compared to the Bloomberg proposal as a potential solution to limit sugar intake. The latter is more likely to succeed as human beings tend to think in relative terms. The limiting the largest container size in which soda could be served, the reference point for what the “normal” size should be would inevitably change. There are many compelling findings coming out of the fields dealing with human nature such as evolutionary psychology. This paper intends to provide a framework where public policy making could be informed by these developments.
|Wages, Workforce, and Employment (AIRLEAP), 3:15-5:00 PM. Room: AUD 426
|Developments in Female Earnings Profiles
|Winkler and Ireland (1994) documented significant differences in earnings profiles between never-married and all other females. This difference may have led to a under estimation of potential human capital for females, which could have caused an under investment by females as well as an under assessment of torte damages. This paper documents an update of Winkler and Ireland (1994) using the CPS from 1992 through 2014. Differences in age earnings profiles between married women and never-married women disappeared by the late 2000s and have not resurfaced when women are pooled by educational attainment, even though hours worked are not controlled. On the other hand divorced, separated, and widowed women still hold a lower age earnings profile. Some differences in profits are due to changing marital patterns. These results are also compared with ACS data.
|Product Evolution and Its Implications for Long-Run Trends in Employment
|Product evolution is the process through which goods and services change over time, which, in recent times, has been observed most in the areas of information processing and communications. It has been observed to various degrees in all industries. As explained in Payson’s Economics, Science and Technology (Edward Elgar, 2000) and in a variety of other books and articles, product evolution need not be a mystery. Quite the contrary, it can be understood, measured, and even predicted on the basis of the ultimate purposes that products serve, and on the basis of fundamental patterns in technological change. It can also be observed in the context of two dimensions: cost reduction and quality improvement. Price movements, in particular, provide a means for objectively measuring product evolution among categories of goods that serve the same basic purpose. For example, information storage and processing has continually undergone rapid cost reduction per unit of information processed due to the miniscule physical requirements that information processing requires as a result of technological advances, while audio-visual entertainment has undergone continual quality improvement because of human’s insatiable desire for higher quality audio-visual input. When combined, these two factors explain how audio-visual appliances have evolved enormously over the past century, from radios, to televisions, computer screens, cell phone displays, and virtual reality devices. As products evolve over time as a function what humans want and what their technology can provide, industries evolve with them. In turn, as industries evolve, so does employment within them as a function of the relative demands for different labor skills in those industries. This paper will explore what product evolution implies for the future of labor, and how our study of product evolution could be put to good use in designing strategies to ensure full employment in future generations.
|Does Regional Variation in Startup Concentration Predict Employment Growth?
|Neoclassical growth theory did not explain either technological change or entrepreneurial activity because scale economies operate at the plant level and in the traditional Solow model; economic growth relied on capital investment in larger plants (Solow, 1956). Despite these investments in capital investment, this capital accumulation can explain only a small amount of the variation in economic growth across regions (Ciccone and Hall, 1996). Since the advent of the Solow growth model, recent theories of economic growth have espoused the role of externalities in generating regional economic growth. Using data from the Quarterly Workforce Indicators (QWI) from the Longitudinal Employer Household Data (LEHD) that tracks all employers in the whole U.S. private sector economy, we examine the impact of these externalities, as measured by entrepreneurial activity, on employment growth. More specifically, we will study the relationship between startup concentration of firms and overall employment growth in Pennsylvania, West Virginia, and Ohio on a (MSA) level for the year 2012. One measure of the process of change in economic activity is the rate at which new firms are being established, or what we call the firm birth rate. Presumably a relatively high regional rate of firm births indicates a process of resources concentrating within that region, while a relatively low rate of firm births would indicate the slower economic activity. A plausible implication is that localities would want to do more to attract and support startups. In the literature, there is significant regional variation in new firm formation, and examined a set of regional determinants to explain this variation (Reynolds, 1994; Armington and Acs, 2002; Acs and Mueller, 2008). That is, there are regional variations that occur in the concentration of startups, so not all regions will have the same experiences with startups and its impacts on employment growth.
|Gaurango Banerjee, Areerat Kichkha
|Minimum Wages, Taxes and Prosperity of States
|We explore minimum wages, state taxes, and their interactions on state level economic activity. In principle, both matter for business decisions. We seek to see whether there is evidence to support this fundamental thought. Hence, is there any interaction between these two variables? If so, is there any greater explanatory power to state level prosperity and employment? Both legislated minimum wage levels and tax rates have been widely discussed as affecting states’ levels of economic activity. Presumably, optimizing government agents (and their voters) understand this fact, and are aware of the possibility of interaction between these two. Yet, the interaction appears to have been little discussed: So far as we are aware, ours is the first study of this interaction, with respect to state government policymaking and state-level economic activity.
|Roundtable: The State of Economics and the Future of Pluralism, 3:15-5:00 PM. Congress Lounge, 2nd Floor
|Officers from some of the most important heterodox associations (AFEE, ICAPE, IAFFE, URPE and ASE) will discuss the state of the economics profession 10 years after the financial crisis. They will also offer their ideas on the future of pluralism and ICAPE.
|AFEE President-Elect; ICAPE Acting Executive Director
|ASE Trustee and Past President
|URPE Steering Committee