POST-CRISIS ECONOMICS

Piet Keizer, Multidisciplinary Economics, A Methodological Account,

Oxford University Press, May, 2015.

 

Post-crisis Economics

When the global economy was hit by a severe financial crisis, mainstream economists were surprised. The global financial system appeared very fragile, especially in the North-western world. Now – five years later – the European economy is still in a depression. The unemployment figures, especially in the Southern part are unacceptably high, and there are no clear signs that we are at the brink of a new period. An important reason for the failure of Europeans to solve their economic problems can be found in the inadequacy of economic science as it manifests itself for a long time already. The official institutions like the central banks, the ministries of finance, and even the trade union organisations show a lack of vision. In The Netherlands prime-minister Rutte has no clue what to do, except the implementation of a classical-liberal programme: smaller governments!

About forty years now I work on an alternative vision of economic science. During

the second half of the 60s I studied economics in Groningen (NL). Because I was disappointed about the lack of realism of the theories, which were taught, I attended many lectures, organised by different Faculties: philosophy, psychology, sociology, political science. After having defended my PhD (on inflation) I went to the University of Maastricht. During the nineties I came in the middle of a conservative revolution, meant to install a regime of education and research, which was based on classical-liberal ideas and econometric techniques. The ideas remained undiscussed, and the emphasis on quantitative methods led to the impoverishment of the content of the programmes. Almost all economists are disappeared: discouraged or fired. New talents are not educated, and we face a strong growth in numbers of non-economists, who are doing the daily work: producing meaningless numbers, and drawing unacceptable policy conclusions from their silent numbers. In 2004 I left Maastricht, because of all the pressure to adapt to The System. In Utrecht I got the opportunity to teach economic methodology. For me this was the start of a new life. I was paid for only 30% ,and I used the time left for the making of a Grand Tour through all the fields of study, which are important for an economist to become a good economist. Now – almost ten years later – I finish a book, which gives an overview of all the relevant analysis in economics (orthodoxy as well as heterodoxy), psychology and sociology. The book focusses on the methodological aspects, and is meant to offer a significant extension or even an outright transformation of orthodox analysis. Economists can learn a lot from heterodoxy and from psychology and sociology. The book ends with the presentation of a new and integrated human scientific paradigm, and makes a start with a series of integrated analyses. Important concepts, such as technology, institutions, control, rationality, morality and openness, placed in an integrated context get new meaning.

The book starts with an exposition of the very basics of philosophy of science, and gives an overview of the origin and development of economics and sociology. Throughout the book all the analysis and theory is illustrated with many practical examples. Of course the current crisis is a rich source in this respect.

The publisher – Oxford University Press – plans to publish the book in summer 2014. According to me the book must be considered as a new start for economics as a scientific discipline, which is about human behaviour. Logic and mathematics are important instruments. They are especially useful in the hands of people, who are aware of their scope, including their limits.

Every academic, who passed an introductory course in economics, is invited to educate him-or herself in what I call Multidisciplinary economics. To me the economic crisis should function as a trigger for economists to re-orient themselves and to develop analyses based on the fundamental insights of centuries on philosophy, economics, psychology and sociology. Therefore a nick name for the book could be Post-crisis Economics.

Title of the book:

Piet Keizer, Multidisciplinary Economics, A Methodological Account, Oxford University Press, May 2015; about 560 pages

Table of Content

Preface

Part I Science, Social Science, Economics

• Introduction

• The Character of Science
  1. Practical Problems and Primitive Solutions
  2. Western Science as a Product of Modernity
  3. Modern Philosophy of Science
  4. Twentieth-century Philosophy of Science
  5. Three Philosophical Questions
  6. Modernity and Post-modernity
  7. Causality and Reason
  8. The Structure of Knowledge
  9. Strategies of Specialisation
  10. The Organisation of Human Science
  11. Methodological Pluralism

• Genesis and Development of Economics and Sociology
  1. Introduction
  2. Modern Moral Philosophy as the Foundation of Social Science
  3. The Emergence of Classical Political Economy
  4. From Classical Political Economy to Orthodox and Neoclassical Economics
  5. The Institutionalist Critique of Neoclassical Economics
  6. From Classical Political Economy to Classical Sociology
  7. Economics in the Interbellum: The Macro Revolution of Keynes
  8. Post-war Economic Growth in Western Europe

Part II Economics

II.1 Introduction

II.2 The Ontological Difference between Orthodox and Heterodox Economics

II.3 Ecology

• Orthodox Microeconomics
  1. Introduction
  2. The Economic World
  3. Orthodox Microeconomic Analysis
     1. Demand and Supply
     2. Perfect Competition
     3. Non-individual Goods and Externalities
     4. Towards a More Realistic Analysis of the Economic World
     5. Imperfectly Competitive Market Structures
  4. New Institutional Economics
     1. Introduction
     2. Property Rights
     3. The Market as an Institution
     4. Governance Structures
     5. The Revival of Original Institutional Economics
  5. Public Choice
     1. Introduction
     2. Direct Democracy
     3. Representative Democracy
     4. Bureaucracy
     5. Interest Groups
     6. Imperfectly Informed Actors in the Public World
     7. New Political Macro Economy

Orthodox Macroeconomics

1. Introduction
2. Business Cycles and Inflation
3. Orthodox Growth Theory
4. Neoclassical Empirical Research
   1. Economics as an Empirical Science
   2. Econometrics
5. Economic Growth, Happiness and the Good Life
6. Academic Education of Economics
7. Epilogue: the Crisis as a Turning Point?

Heterodox Economics

• Evolution and Entrepreneurship, an Evolutionary and an Austrian View
  1. Introduction
  2. Evolutionary Economics
     1. Introduction
     2. The Darwinian Natural Selection Model
     3. Selection in the World After the Emergence of Humans
     4. Economics of Technological Change
     5. The Return of Original Institutional Economics
     6. The Future of Evolutionary Economics
  3. Austrian Economics
     1. Introduction
     2. Praxeology and Historical Development
     3. Subjectivism
     4. Market as a Competitive Process
     5. Institutionalisation of Free Markets
     6. The Calculation Debate
     7. Schumpeter as a Special Case
     8. Austrian Macroeconomics
     9. Conclusion

• Radical Economics
  1. Introduction
  2. The Economics of Marx

Intermezzo A Very Concise History of Continental Europe: 1850-1950

1. Current Radical Economics
2. A Radical View on the Financial Crisis 2008
3. Conclusion 

• Post-Keynesian Economics
  1. Introduction
  2. The Methodology of Keynes
  3. The Economic Analysis of Keynes
  4. Neoclassical Reactions on the Analysis of Keynes
  5. Leijonhufvud’s Idea of the Corridors
  6. New Keynesian Economics
  7. Post-Keynesian Economics
     1. Introduction
     2. The Macro Goods Market
     3. The Macro Labour Market
     4. The Macro Financial Market
     5. The Post-Keynesian Position in the Crisis Debate
     6. Conclusion

Social Economics

1. Introduction
2. The Methodology of Social Economics
3. Institutions
   1. Introduction
   2. Greif about Culture and Institutions
   3. Aalbers (et al) about the Securitisation Revolution
   4. Elinor Ostrom about the Diversity of Institutions
   5. Acemoglu about Economic Power and Institutions
   6. Dolfsma and Spithoven about Silent Trade
4. Socio-Economics
   1. Introduction
   2. Van der Lippe and Siegers about the Labour Division between Husband and Wife
   3. Schenk about the Mergers & Acquisitions Wave
   4. Keizer about Over-optimistic Ideologies and Attitudes
5. The Philosophical Roots of Social Economics
   1. Introduction
   2. Sen on Rationality
   3. Sen on the Financial and Economic Crisis

9.6 Conclusion

Intermezzo

Part III Psychology for Economists

• Psychology for Economists
  1. Introduction
  2. The Origin of Psychology
  3. Perspectives in Psychology
     1. Introduction
     2. The Cognitive Approach
     3. The Behaviourist Approach
     4. The Psycho-dynamic Approach
     5. The Humanist Approach
     6. The Biological Approach
     7. The Social-psychological Approach
  4. Behavioural Economics
  1. 1. A General Overview
  1. 1. Neuroeconomics
  1. 1. Cognitive Science
  2. The Social Factor
  3. The Psychic WorldAppendix Do the Germans Have a Monetary Trauma?

 

 

Part IV Sociology for Economists

Introduction

• Macro and Micro Approaches in Sociology
  1. Functionalism versus the Conflict Approach
     1. Functionalism
     2. The Conflict Approach
  2. Micro-Sociological Approaches
     1. Introduction
     2. Symbolic Interactionism
     3. Exchange, Network and Rational Choice Analysis
  1. The Relationship between Micro and Macro Analysis

Box: The Emergence of the System of Dutch Labour Relations

Appendix 11.1 Practical Problems and the Framing of their Situation

Appendix 11.2 A Social Scientific Discourse

The Historical Approach in Sociology

1. Introduction
2. Two Interpretations of the History of Mankind
3. Modernity
   1. Introduction
   2. The Juggernaut
   3. The Holocaust
   4. Habermas’ Way Out
   5. Globalisation: Problem or Solution
4. From Structuralism to Post-Structuralism and Post-modernity
   1. Structuralism and Post-structuralism
   2. Post-modernity
   3. Post-social Theory

1. Conclusions

Multidisciplinary Sociology and The Social World

1. Introduction
2. Psychological Sociology
   1. Introduction
   2. Group-Based Hierarchies: psychological, social-psychological and social-structural explanations
   3. Box: European Union and Rivalry
3. Economic Sociology
   1. Introduction
   2. New Economic Sociology
   3. Culture Matters
   4. Sociology of Labour Markets
   5. Sociology of Financial Markets
   6. Networks in Economic Life

Methodological Assessment

1. The Social World
   1. Introduction
   2. The Axioms of the Social World
   3. The Technique of Producing Status in the Social World
   4. Us versus Them
   5. The Moral Constraint
   6. Social Desire and Economic Need
   7. Irrational Persons and Irrational Societies

Part V Towards an Integration of the Three Worlds

V.1 Introduction

V.2 Technology and Institution

V.3 Historicity

V.4 Ecology

V.5 Openness of Systems

V.6 Macro Analysis

Integration of the Three Worlds

1. The Economic World
2. The Social World
3. The Psychic World
4. The Psychic-economic World
5. The Social-economic World
6. The Psychic-social World
7. The Psychic-economic-social World

• Applications of the Multi-motivational Framework of Interpretation
  1. Discrimination as an Economic Cost
  2. A Cost-Benefit Analysis of (In)Equality
  3. Four More or Less Persistent Systems
  4. Meaning of Concepts in the MDE-World
     1. Utilities (preferences), resources and technology
     2. Rationality
     3. Morality
     4. Institutions
     5. Ecology
     6. The Openness of Systems
     7. Macro Analysis
     8. Parsimony

Part VI Conclusions

• Conclusions

Appendices

1. The Logical World
2. Kant for Economists
3. Jung for Economists
4. Adam Smith as the Founding Father of Multidisciplinary Economics

References

Name Index

Subject Index