How Founding beliefs of Capitalism, University and Mathematics Shaped the Institution of Mainstream Economics
The article shows that mainstream economics, which now includes such current as new institutional economics, is the result of an evolution shaped by three institutions (capitalism, university and mathematics) by imposing to the profession of economists their founding beliefs. These beliefs are: «lai...
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Інститут телекомунікацій і глобального інформаційного простору НАН України
2016
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| Zitieren: | How Founding beliefs of Capitalism, University and Mathematics Shaped the Institution of Mainstream Economics / V. Yefimov // Математичне моделювання в економіці. — 2016. — № 1(5). — С. 30-58. — Бібліогр.: 96 назв. — англ. |
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| author | Yefimov, V. |
| author_facet | Yefimov, V. |
| citation_txt | How Founding beliefs of Capitalism, University and Mathematics Shaped the Institution of Mainstream Economics / V. Yefimov // Математичне моделювання в економіці. — 2016. — № 1(5). — С. 30-58. — Бібліогр.: 96 назв. — англ. |
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| description | The article shows that mainstream economics, which now includes such current as new institutional economics, is the result of an evolution shaped by three institutions (capitalism, university and mathematics) by imposing to the profession of economists their founding beliefs. These beliefs are: «laissez-faire»; «economic knowledge has a priori and exegetical character»; «all mathematical entities exist in reality»; «beauty is a criterion for theoretical constructions»; «scientific research is a play with axioms and rules of inference». Because of these beliefs mainstream economics, based on mathematical constructions arbitrarily borrowed from the physics of the nineteenth century, remains cognitively sterile and socially detrimental.
У статті доводиться, що магістральний напрям економічної дисципліни, яка в даний час включає в себе таку піддисципліну, як нова інституціональна економічна теорія, сформувався під вирішальним впливом трьох інститутів (капіталізму, університету та математики), які нав'язали професії економістів їх основні вірування-переконання. Це такі вірування-переконання: «Laissez-faire», або шкідливість державного втручання в економіку; «Економічні знання мають апріорний і экзегетичний характер»; «Всі математичні об'єкти існують у дійсності»; «Краса є важливим критерієм оцінки теоретичних побудов»; «Наукове дослідження є грою з аксіомами і правилами виведення». Через ці вірування-переконання магістральний напрям економічної дисципліни, заснований на математичних побудовах, довільно запозичених з фізики дев'ятнадцятого століття, залишається пізнавально стерильним і соціально шкідливим.
В статье доказывается, что магистральное направление экономической дисциплины, которая в настоящее время включает в себя такую поддисциплину, как новая институциональная экономическая теория, сформировалось под решающим влиянием трех институтов (капитализма, университета и математики), которые навязали профессии экономистов их основные верования-убеждения. Это такие верования-убеждения: «Laissez-faire», или вредность государственного вмешательства в экономику; «Экономические знания имеют априорный и экзегетический характер»; «Все математические объекты существуют в действительности»; «Красота является важным критерием оценки теоретических построений»; «Научное исследование является игрой с аксиомами и правилами вывода». Из-за этих верований-убеждений магистральное направление экономической дисциплины, основанное на математических построениях, произвольно взятых из физики девятнадцатого века, остается познавательно стерильным и социально вредным.
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| first_indexed | 2025-12-07T16:14:23Z |
| format | Article |
| fulltext |
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Математичне моделювання в економіці, №1, 2016
UDK 330.101
V. YEFIMOV
HOW FOUNDING BELIEFS OF CAPITALISM,
UNIVERSITY AND MATHEMATICS SHAPED
THE INSTITUTION OF MAINSTREAM ECONOMICS
Abstract. The article shows that mainstream economics, which now
includes such current as new institutional economics, is the result of an
evolution shaped by three institutions (capitalism, university and
mathematics) by imposing to the profession of economists their founding
beliefs. These beliefs are: «laissez-faire»; «economic knowledge has a
priori and exegetical character»; «all mathematical entities exist in
reality»; «beauty is a criterion for theoretical constructions»; «scientific
research is a play with axioms and rules of inference». Because of these
beliefs mainstream economics, based on mathematical constructions
arbitrarily borrowed from the physics of the nineteenth century, remains
cognitively sterile and socially detrimental.
Key words: institution of economics; founding beliefs of institutions;
capitalism as an institutional system; institution of university; institution of
mathematics (of the discipline of mathematics).
Introduction
This article is devoted to an analysis of the birth and evolution of what is now
commonly called mainstream economics. I analyse the evolution of mainstream
economics during two centuries not as a purely intellectual process inside
communities of economists but as a social and political process determined by an
embeddedness of economics in such institutions as capitalism and the university,
where the institution of capitalism played a decisive role. Economics itself is
considered as an institution, i.e. as particular rules based on certain beliefs that
frame the professional activities of communities of economists. At a later stage of
the evolution of institution of economics, it was strongly influenced by the
institution of mathematics, i.e. by rules and beliefs that frame the professional
activities of communities of mathematicians. The article shows that mainstream
economics, which now includes such school of economic thought as new
institutional economics, is the result of an evolution shaped by three institutions
(capitalism, the university and mathematics), by imposing on the profession of
economists their founding beliefs, i.e. such beliefs that were linked with the birth of
МАТЕМАТИЧНІ ТА ІНФОРМАЦІЙНІ МОДЕЛІ
В ЕКОНОМІЦІ
Ó V. Yefimov, 2016
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Математичне моделювання в економіці, №1, 2016
the institution or played an important role in its evolution. These founding beliefs
are: «laissez-faire» (capitalism); «economic knowledge has a priori and exegetical
character» (university); «all mathematical entities exist in reality», «beauty is a
criterion for theoretical constructions», «scientific research is a play with axioms
and rules of inference» (mathematics).
The destiny of mainstream economics, initially as an intellectual activity and
later as an institution, was and continues to be closely linked with capitalism. At
the beginning, two Frenchmen, Pierre Le Pesant de Boisguilbert and Anne Robert
Jacques Turgot investigated emerging capitalism from the point of view of existing
obstacles to its development. They presented a vision of social life as a network of
exchanges of commodities between egoistically-oriented merchants. The natural
conclusion of their investigations for governmental economic policy of that time
was the requirement for «laissez faire». The university professor of moral
philosophy, Adam Smith, presented their ideas in his Wealth of Nations according
to the canons of his discipline closely linked with theology. Laissez-faire
economists of the 19th century, united in France around the Journal des
économistes and in England around The Economist did not investigate the new
born capitalism but, on the basis of selective perception of Smith’s ideas,
legitimated it and justified the laissez-faire principle. It became necessary because
early capitalism generated the so-called «social question».
The institutionalisation of economics as a university discipline took place in
France, England and the United States at the end of the 19th century as a kind of
moral philosophy based on a vision of social life as a network of exchanges (in fact
disregarding morality), in contrast to the traditional moral philosophy based on the
consideration of society from the point of view of the duties and responsibilities of
its members. This kind of institutionalisation was realised under the strong
influence of capitalism as an institution, with the growing decision-making power
of businessmen in all domains of social life, including university education. The
French, British and American universities of the 19th century, with their
Aristotelian understanding of science, had favourable conditions for such
institutionalisation.
A different type of economics was institutionalised at the end of the 19th century
in German universities, where the understanding of science was not taken from
Antiquity and Cartesian modernity, but corresponded to experimental practices in
natural sciences. The task of this economics was not to legitimise capitalism with
its ‘social question’, but to find fair and efficient solutions to this question in the
framework of capitalism. This kind of economics as a science, and not as a moral
philosophy, has been transferred to the United States under the form of
Institutionalism, but has been killed by the institution of capitalism («Academic
freedom» trials, selective recruitments and funding).
Economics as a moral philosophy legitimating capitalism and rationalising its
negative consequences needed strong justifications to be considered as a ‘science’.
The best way to do it was its mathematisation. William Stanley Jevons and Léon
Walras achieved this by an arbitrary imposition onto social reality of a paradigm
taken from an alien field of knowledge, namely mid-nineteenth century physics.
Their marginalism was nothing else but a continuation of economics as a moral
philosophy (in spite of its mathematical clothes) with its vision of social life as a
network of exchanges and its invisible hand of their regulation. The
mathematisation of economics was based on the belief that mathematics is a
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universal scientific language and/or on the belief that «all mathematical entities
exist in reality». After World War Two a very close interaction between the
communities of economists and mathematicians resulted in the adoption by
economists of two other founding beliefs shared by mathematicians: «beauty is a
criterion for theoretical constructions» and «scientific research is a play with
axioms and rules of inference». Because of these beliefs, mainstream economics,
based on mathematical constructions arbitrarily borrowed from the physics of the
nineteenth century, remains cognitively sterile.
1. The birth of political economy from the point of view of Bruno Latour’s and
Rom Harré’s models of scientific research
Economists continue to consider scientific research using logical concepts of
deduction and induction. A recently published article «concludes that Petty relied
almost exclusively on deduction in his scientific approach and that his analysis
does not reveal any inductive reasoning» [90]. This kind of consideration is
certainly out-of-date [38; 40]. William Petty was a founding member of the Royal
Society of London, the cradle of the institution of science. The motto «Nullius in
Verba» (demonstration by facts and not by words) has become the rule at the basis
of the institution of natural sciences, the most important feature of the scientific
culture. Bruno Latour and other specialists of Science Studies have investigated
this culture and shown that the hypothetico-deductive model never corresponded to
the realities of scientific research [52]. They switched from the discourse around
this model to a new model of scientific research, the elaboration of which has been
based on historical and field studies of scientific practices in natural sciences
[55, 56]. The activities of the Royal Society of London represented efforts to
collect data in the framework of experimental situations, working out of detailed
reports and collective evaluation of obtained results. The reports of the Royal
Society served to enlarge the number of witnesses to experiments, and in this way
«to make virtual witnessing a practical option for the validation of experimental
performances» [77, p. 69]. One of the key founding members of this society,
Robert Boyle, insisted on his «lack of preconceived expectations, and, especially,
of theoretical investments in the outcome of experiments» [77, p. 68].
According to Bruno Latour, the specificity of scientific research does not
consist in a special «scientific method», but in the design of experimental
situations, in which the object has the possibility to resist, «to object» to the ideas
of the researcher concerning it. Part of the experimental situation is a recording
device assuring descriptions, the core of the experimental work. Latour contests
conclusions of «scientific methodologies» in social sciences which ignore this most
important feature of scientific research: «Unfortunately, although it tastes and
smells like hard science, those all-terrain «scientific methodologies» are a sham
and a cheap imitation for a reason that becomes clear if we go back to the
definition of objectivity, as what allows one entity to object to what is said about it.
If we lose the influence of the object in what is said about it, as quantitavists are so
proud of saying, we also lose objectivity!» [53, p. 115]. It is this property of
scientific research which is responsible for such a huge influence of science-based
technologies on humanity.
Such works of William Petty as «Political Arithmetic» and «Political Anatomy
of Ireland» represent results of a large scale survey in Ireland [58, p. 84 - 118]. The
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Математичне моделювання в економіці, №1, 2016
undertaking of this survey provided Petty with the opportunity to examine in
microscopic detail the social and economic condition of an entire people and gave
him a wealth of empirical knowledge [3, p. 11, 12]. This survey fulfilled in Petty’s
research the role of a recording device. Petty did his economic research in such a
way that more than three hundred years later Latour characterised the work of the
social scientist: «we are in the business of descriptions. Everyone else is trading on
clichés. Enquiries, survey, fieldwork, archives, polls, whatever – we go, we listen,
we learn, we practice, we become competent, we change our views. Very simple
really: it’s called inquiries. Good inquiries always produce a lot of new
descriptions» [54, p. 146]. For Latour, a descriptive text produced by a social
scientist on the basis of close contacts with acting human beings is «the functional
equivalent of a laboratory. It’s a place for trials, experiments, and simulations»
[54, p. 149].
Pierre Le Pesant de Boisguilbert devoted his «Le Détail de la France» primarily
to taxes and contributions, as William Petty did with his «Treatise of Taxes and
Contributions». The latter book was written after the completion of the survey in
Ireland and was certainly based on it. The former book contains empirical
investigations made by Boisguilbert himself and «far from being an intellectual
perspective or pure speculation, on the contrary, his system arises from lengthy
experience and constant contact with practical concerns» [26, p. 2]. As he wrote
himself in one of his letters he «devoted himself to the practice of all the details
and knowledge of all parts of the kingdom» [42, p. 146]. In another letter he
admitted that he could not fulfill his functions of lieutenant general (civil servant’s
position) without going into detail in all kinds of commerce and traveling
constantly in search of information in the countryside and interrogating every
labourer he met. He also collected information by communicating with rich
merchants and capitalists [42, p. 154]. Now we would say that he used the
technique of interviews. Reading Boisguillebert’s book «Le Détail de la France»
[7], originally published in 1695, one can get the impression that he is reading a
report of participant observation following Clifford Geertz’s methodology of thick
description. It totally corresponds to Rom Harré’s model of research in social
sciences [91].
Table 1 – Two ontologies [40, p. 29]
Ontologies
Locative
systems
Entities Relations
Newtonian Space and time Things and
events
Causality
Discursive Arrays of people Speech acts Rules and story
lines
According to Rom Harré, «if one wants to explain some social phenomena one
might say that it was the rule or the convention that made one do it, so that was
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Математичне моделювання в економіці, №1, 2016
where the source of causal efficacy in the social world is to be located» [39, p. 118].
«Le Détail de la France» is full of descriptions of such rules and conventions. Rom
Harré’s approach to social sciences is based on a totally different ontology from
that inherited from Newtonian mechanics. What we have to investigate in social
sciences – and economics is (or should be) a social science – are not things and
events but discourses consisting of speech acts. Because social relations are
mediated by language, conversations can be considered as primary social reality
which has to be studied. Instead of looking for causal relations, social scientists
(including economists) have to try to reveal rules and supporting story lines
(reflection of beliefs), which together make institutional knowledge. In order to do
this «the experimenter or observer has to enter into a discourse with the people
being studied and to try to appreciate the shape of the subject’s cognitive world»
[40, p. 21]. The researcher has «to know what a situation means to a person and not
just what the situation is (say, according to a description in terms of its physical
characteristics as there are seen by an observer) if we are to understand what that
person is doing» [40, p. 21]. For this kind of research, it does not matter where and
even when something was said, but what really matters it is who said it.
Institutional knowledge is not universal; it is local. That is why the people
contacted should have knowledge linked with the phenomena under study. In this
sense «array of people» means people from a certain appropriate community. At
the same time, «array of people» means a sample from a target community. The
choice of the people in the sample and its size are done in a totally different way
compared with the mechanistic approach. The researcher contacts people who are
willing to share their knowledge. The size of the sample (number of people
contacted) is determined by the so-called «theoretical saturation», when the
researcher learns nothing new by contacting additional people from the target
community.
Boisguilbert was the first to formulate the principal liberal proposition in terms
of economics [26, p. 11 - 12]. The doctrine of laissez-faire was born on the basis of
objective analysis of early capitalist practices that constantly came up against
numerous obstacles. A natural conclusion from this analysis was laissez faire:
«Either it is left to nature, or we create a new mechanism. <…> And since an
entirely new, regulated machine is inconceivable, then let all regulation be
banished» [26, p. 91]. Boisguilbert expressed it in his «Factum de la France»
telling the well-known story of a meeting between a merchant from Rouen,
Thomas Le Gendre, and the Minister of finance Jean-Baptiste Colbert; when the
minister asked how the French state could be of service to the merchants and help
promote their commerce, Le Gendre simply replied «Laissez-nous faire»: «the
merchant said that there was a very certain and easy method to put into practice,
which was that if he and his ilk [i.e. the ministers and the men in charge of the
state] stopped interfering in it [in trade] then everything would go perfectly well
because the desire to earn is so natural that no motive other than personal interest is
needed to induce action; and that there was only one constant violence, caused by
indirect interests, which could destroy this state of affairs and throw the economy
into the present state» [26, p. 92].
Half a century later, Anne Robert Jacques Turgot in his «In Praise of Gournay»
(«Eloge de Vincent Gournay») reformulated the same idea: «The general freedom
of buying and selling is therefore the only means of assuring, on the one hand, the
seller of a price sufficient to encourage production, and on the other hand, the
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Математичне моделювання в економіці, №1, 2016
consumer, of the best merchandise at the lowest price» [89, p. 107]. If Boisguilbert
based his conclusions on his own empirical investigations, Turgot used for this
purpose participant observations of Gournay: «M. de Gournay was of the opinion
that every man who works deserves the gratitude of the public. He was astonished
to find that a citizen could neither manufacture nor sell anything without having
bought the right to do so by entering a corporation or guild at great expense, and
that, after having bought this right, it was still sometimes necessary to have a law
suit, to determine whether by entering this or that corporation he had acquired the
right to manufacture precisely this or that article»; «He had not imagined that in a
kingdom subject to the same prince, all towns looked on each other as enemies,
that they would assume the right to prohibit work within their precincts to other
Frenchmen, classifying them as foreigners, to oppose the sale or the free transit of
commodities of a neighboring province – and thereby for the sake of some fleeting
interest, to contend against the general interest of the State, etc., etc.» [89, p. 104,
105]. It is in this way that economics linked with laissez-faire belief was born.
2. History of economic thought from the point of view of political science
The previous section of the article was devoted to the birth of economics. Starting
from the third section the rest of the article will concern certain episodes of its
evolution linked with what we call now mainstream economics. The approach I use
in my analysis is the following: the evolution of mainstream economics during two
centuries will be studied here not as a purely intellectual process inside
communities of economists but as a social and political process determined by its
embeddedness in such institutions as capitalism and the university. Economics
itself is considered as an institution. I define the notion of institution in the
following way: an institution is a set of formal and informal rules, and also beliefs,
that stand behind these rules, that orient the behaviour of members of a certain
community. Individuals can be at the same time members of several different
communities. Formal rules for a community are often the result of compromise
with other communities. The informal rules of the behaviour of a community are
more linked than formal ones with beliefs shared by members of this community.
The most important among these beliefs are those that were linked with the birth of
the institution or played an important role in its evolution. I call these beliefs the
founding beliefs of the institution. I define the notion of the institutional knowledge
of members of a community acting in the framework of an institution as the total
sum of knowledge of its members concerning formal and informal rules and beliefs
making up this institution.
The rules of the institution of economics relate to university professors and
students of economics. These rules provide a framework for developing curricula
and syllabi, as well as for the organization of examinations. They define the
procedures and directions of economic research, and the criteria for publication of
articles in academic economic journals. These rules include formal and informal
rules of functioning of professional organizations of economists, such as the
American Economic Association. Beliefs that underlie the rules of functioning of
the community of academic economists are expressed in different answers to such
questions as: What does it mean to undertake economic research? What is the
purpose of economic research? What should economists study? How should they
carry out the study? In what form should the results of the study be presented?
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What does it mean to teach economics? What kind of economics should we teach?
The answers to these questions, along with formal and informal rules of behaviour
based on the answers, altogether constitute the institutional knowledge of
professional economists. Candidates for admission to the profession acquire most
of this knowledge during the preparation and defense of PhD dissertations that
many do in the framework of post-graduate studies. If someone becomes a member
of the profession and does not have this knowledge, or refuses to follow its
instructions, then sooner or later she/he will be rejected by the profession.
The approach used in this article is similar to the approaches of such interrelated
currents of political science as Historical Institutionalism [83], Discursive
Institutionalism [74; 75] and Constructivist Institutionalism [41]. Political scientists
usually link the birth of historical institutionalism with the publication of the book
of Theda Skocpol [81]. Sometimes representatives of this current are nominated as
historical-interpretive institutionalists [83]. Theda Skocpol has never felt any
respect whatsoever for disciplinary boundaries [82, p. 16]. Her statement hereafter
presented is central to the research made in this article: «Institutions embody ideas.
Actually they marry them to resources and patterns of power, social power, and
institutions certainly offer definitions of the situation. At the level of political
psychology, that explains why people simply are not short-term instrumentalists.
They accept definitions of the situation that seem workable and are backed by
powerful relationships. People have to deal with such institutionalized definitions
of the situation on a day to day basis» [82, p. 18]. At last Skocpol is willing to
study «what is» and not «what ought to be»: «I am a social scientist. I believe there
is a difference between science and normative work, and good social science is not
exactly the same thing as advocacy, though advocacy always benefits from sound
scholarship» [82, p. 19].
Advocates of historical institutionalism pay strong attention to embodiment in
the analysis of asymmetries in power relations: «Historical institutionalists
accepted the contention that conflict among rival groups for scarce resources lies at
the heart of politics», they found explanations of inequalities that mark national
political outcomes «in the way the institutional organization of the polity and
economy structures conflict so as to privilege some interests while demobilizing
others». Historical institutionalists see «the state no longer as a neutral broker
among competing interests but as a complex of institutions capable of structuring
the character and outcomes of group conflict» and «have been especially attentive
to the way in which institutions distribute power unevenly across social groups.
Rather than posit scenarios of freely-contracting individuals, for instance, they are
more likely to assume a world in which institutions give some groups or interests
disproportionate access to the decision-making process; and, rather than emphasize
the degree to which an outcome makes everyone better off, they tend to stress how
some groups lose while others win» [36, p. 941 - 947].
Discursive Institutionalism has been introduced by Vivien A. Schmidt [74].
Political scientists analyse ideas and discourses in order to explain the dynamic of
institutional change or continuity. The «institutionalism» in this term highlights the
fact that this is not only about the communication of ideas or «text» but also about
the institutional context in which and through which ideas are communicated via
discourse [75, p. 2, 4]. Discursive and historical institutionalism are for the most
part complementary. Discursive institutionalism can help historical institutionalism
to explain the dynamics of change in historical institutionalist structures through a
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Математичне моделювання в економіці, №1, 2016
meaning-based logic of communication and historical institutionalism can help
discursive institutionalism to explain the path-dependent regularities of ideas and
discourse in different institutional contexts [74]. The institutions of discursive
institutionalism are «simultaneously constraining structures and enabling
constructs of meaning, which are internal to «sentient» (thinking and speaking)
agents whose «background ideational abilities» explain how they create and
maintain institutions at the same time that their «foreground discursive abilities»
enable them to communicate critically about those institutions, to change (or
maintain) them» [75, p. 4].
In Constructivist Institutionalism, which has features of both historical and
discursive institutionalisms, focus is on the constructed nature of political
opportunities structures; on institutional creation and post-formative institutional
change; and ideational preconditions of institutional change [41, p. 58 - 59]. In this
article on the basis of constructivist institutionalism I will consider certain episodes
of the institutional history of economics in order to show how the institution of
economics was influenced, and in many respects shaped, by three other institutions.
3. On the way to a profession in the service of capitalism
Boisguilbert and Turgot investigated emerging capitalism from the point of view of
existing obstacles to its development. They presented a vision of social life as a
network of exchanges of commodities between egoistically-oriented merchants.
The natural conclusion from their investigations for governmental economic policy
of that time was the requirement of laissez faire. The university professor of moral
philosophy, Adam Smith, presented their ideas in his “Wealth of Nations”
according to the canons of his discipline closely linked with theology [92, p. 88 - 106,
112 - 113]. In the United States of the first half of the nineteen century political
economy was interpreted «as a divinely ordained extension of Christian moral
philosophy» and «textbooks welcomed in New England might convey that
«invisible hand» was really the hand of God» [4, p. 7]. The Smith’ work was
largely diffused in the French language [27]. Jean-Baptiste Say contributed to the
spreading of his ideas in France. Capitalism is a complex institutional system with
a community of owners and managers of capital as a determinant of this system.
The laissez-faire concept is an important belief of most members of this
community closely linked with their interests, and can be considered as the
founding belief of the system. In the nineteenth century, the most influential group
in the community of owners and managers of capital became industrialists. It is
evident and well known that «as the strength and power of manufacture grew,
industrialists found within the work of Smith and Say a justification for their
activities, a validation for their material wealth, and «scientific» support for the
principles of laissez-faire and government non-intervention» [72, p. 23].
Laissez-faire economists of the nineteenth century, united in England around
«The Economist» and in France around the «Journal des économistes», did not
investigate the new born capitalism but, on the basis of selective perception of
Smith’s and Say’s ideas, legitimated it and justified the laissez-faire principle. This
became necessary because of the fact that early capitalism generated the so-called
«social question». The latter was usually referred to «everything from working-
class poverty to workplace indiscipline to unionization, strikes, and working-class
socialist activism» [72, p. 3]. Preconditions for the social question existed in
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England already at the time of Adam Smith. In the pits of Durham or
Northumberland one could see the following picture: «Here men and women
worked together, stripped to the waist, and sometimes reduced from pure fatigue to
a whimpering half-human state <..> children of seven or ten who never saw
daylight during the winter months were used and abused and paid a pittance by the
miners to help drag away their tubs of coal; pregnant women drew coal cars like
horses and even gave birth in the dark black caverns» [44, p. 43]. A similar
condition existed in factories where «children, who tended the machines round the
clock for twelve or fourteen hours at a turn, cooked their meals on the grimy black
boilers, and were boarded in shifts in barracks where, it was said, the beds were
always warm» [44, p. 44].
To be an «economist» in Great Britain of the nineteenth century meant the
feature of a certain «social and political culture – hence the foundation and naming
of “The Economist” in 1843 as journal to support the cause of Free Trade»
[88, p. 4]. Many private clubs, such as «the Political Economy Club of London,
founded in 1821, provided an organisational centre for the discussion and
propagation of «sound» doctrines, particularly free trade» [16, p. 402]. The
character of discourse in England in the middle of the nineteenth century
concerning the social question and how it was linked to political economy can be
illustrated by some biographic details of one of the central figures in the
institutionalisation of economics, Alfred Marshall. Young Marshal could not
ignore the existence of the social question and being involved in studying ethics he
«thought that the justification of the existing condition of society was not easy».
One of his friends told him «Ah! if you understand Political Economy you would
not say that» [48, p. 137]. In a manuscript, which was designed for the Preface to
the book “Money, Credit and Commerce”, Marshall explained what this friend
meant: «About the year 1867 (while mainly occupied with teaching Mathematics at
Cambridge) [I have been in] touch with the question: how far do the conditions of
life of the British (and other) working classes generally suffice for fullness of life?
Older and wiser men told me that the resources of production do not suffice for
affording to the great body of the people the leisure and the opportunity for study;
and they told me that I needed to study Political Economy» [48, p. 138]. This was
one of the justifications that political economy provided for existing condition of
society. Articles published in economic journals and political economy textbooks
contained many other justifications. Hereafter are examples of such justifications:
«Since wages were determined by the natural self-regulating mechanism of supply
and demand, any attempts to artificially set wages ran the risk of destabilizing the
entire market»; «the workers were miserable because they immediately spent all
their money rather than putting it aside for an uncertain future»; «if the nineteenth-
century working class was unable to pull itself up the social ladder as the
bourgeoisie had once done it was due to lack of effort, immorality, and ignorance
rather than to a laissez-faire economic system» [72, p. 15].
The following quotation from a report dated 1864 of the French Minister of
Education, Victor Duruy, to Emperor Napoleon III on the creation of the
Department of Political Economy at Paris Faculty of Law shows governmental
involvement in spreading ideas of political economy as justifications of the existing
social order: «Your Majesty once addressed these words to the national industry
exhibitors: “Spread among your workers the sound doctrines of political
economy”. You, Sir, also claimed that the duty of government is to propagate these
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necessary concepts, which, according to the English minister of that time, saved
England from socialism. This necessity proclaimed by the Emperor fourteen years
ago, the country recognizes today. Public opinion demands that unfortunate gap in
our general educational system is filled, and several cities have already claimed the
opening of political economy courses» [23, p. 43 - 44]. French political economists
saw important opportunity for professionalization of their discipline. In order to get
«scientific status and power» the discipline «protected itself from unwanted
knowledge», «elevated particular types of knowledge and disqualified others»
[72, p. 6].Unwanted knowledge primarily concerned the social question: «It was
industrialists who offered the descriptions of “la question sociale” and proposals
for its solution that economists in turn studied, promoted and grafted onto their
science» [72, p. 7]. In order to do it they relied upon fictional «Adam Smith and
Jean-Baptiste Say who they invented» [72, p. 19] by ignoring in their teachings
everything that contradicted the laissez-faire principle. Their writings were
determined by «their will to defend social order and their fear of socialism»
[79, p. 777].
In the United States, beginning from the mid-nineteenth-century, Christianity
inspired both camps of American economists, advocates of laissez-faire and its
opponents. I will touch on the Social Gospel movement in the next section, but the
opposite movement was finally victorious: «Members of so-called clerical school
of academic economists <…> worked closely with a group of wealthy and
prominent men of affairs. Their common goal was the installation of laissez-faire
as an American system of economics» [33, p. 37]. After the Civil War they
continued to develop the mid-century economic synthesis which «was the joint
creation of academics who domesticated English classical economics as a scientific
substitute for moral philosophy and American businessmen who needed just such a
rationale for the developing industrial economy» [33, p. 36]. Perhaps the most
prominent academic economist issued from the clergy was William Graham
Summer. He defended radical laissez-faire as being justified by laws of evolution.
Summer wanted to study the economic and social problems of his day scientifically
and in Herbert Spencer’s “Study of Sociology”, he found the model to follow.
After «resigning his clerical post, Summer became the first occupant of a chair in
political economy and social science at Yale» [33, p. 43]. In this country «by the
mid-1870s laissez-faire economists had consolidated their control of the discipline
in the colleges. Economics had become a science of wealth and a useful
justification for entrepreneurs who were reaping the fruits of an expanding
economy. Prominence as an economist depended on faithfulness to the laissez-faire
system, not on training or demonstrated scientific ability <…> laissez-faire was
more than a mere test of economic orthodoxy. It was used to decide whether a man
was an economist at all» [33, p. 39 - 40].
4. Two types of universities and the institutionalisation of two types of
economics
It seems that historians of economic thought did not pay much attention to the fact
that professionalization of economics took place inside universities. Institutions of
economics appeared in Europe and the United States in the second half of the 19th
century. They were born inside the national institutions of universities. The first
universities were created in the 13th century. This is distinct from the birth of the
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institution of science in the 17th century, which took place outside the university.
This birth can be linked with the foundation in 1662 of the Royal Society of
London for the Improvement of Natural Knowledge. For several centuries,
universities did not carry out any research but were purely educational
establishments subordinated to the Church and state, with the task of educating
clergymen and civil servants [14]. Up to the 18th century, universities provided
education based on ancient Greeks and Romans, as well as on the Bible and
theological texts and «natural sciences were incorporated quite late in British
university education, sometimes not until the 1880s» [31, p. 149]. The founding
belief of the institution of universities was the idea that «all accessible knowledge
is based on certain texts inherited from Antiquity and that any progress in knowledge
could derive only from a more detailed exegesis of these texts» [14, p. 10]. The first
economist-researcher, William Petty, affiliated to the Royal Society of London,
abandoned very quickly his academic career because «he had a lifelong antagonism
towards the universities, based upon his temperament combined with philosophical
convictions which almost inevitably gave rise to a contempt for orthodox learning.
The antagonism was at bottom an expression of his commitment to the Bacon-
inspired new science» [3, p. 11]. Similar negative feelings towards universities
were felt by a second economist-researcher, Pierre Boisguilbert [42, p. 134]. It
could seem to be a paradox, but it is not, that mainstream followers of these
researchers rely only on conclusions of their research but not on the way they did
this research. This deviation from the initiators of economics was imposed on the
discipline of economics by two institutions: capitalism and university.
The fact that economics was institutionalised in the institution of universities is
crucial for understanding the history of French, English and American economics
because in this way the founding belief of the institution of universities influenced
very much the economic profession. The separation of science and philosophy that
took place with birth of the Royal Society of London did not concern economics in
these countries at the end of the 19th century. Economics was proclaimed science
but remained a kind of moral philosophy. This moral philosophy was based on the
vision of social life as a network of exchanges (in fact disregarding morality), in
contrast to the traditional moral philosophy based on the consideration of society
from the point of view of the duties and responsibilities of its members. This type
of institutionalisation was realised under the strong influence of capitalism as an
institution, with the growing decision making power of businessmen in all domains
of social life, including university education. The French, British and American
universities of the 19th century, with their Aristotelian understanding of science,
had favourable conditions for such institutionalisation.
A different type of economics has been institutionalised at the end of the 19th
century in German universities, where the understanding of science was not taken
from Antiquity and Cartesian modernity but corresponded to experimental
practices of natural sciences with the creation in 1810 of the first research
university in Berlin. The task of German economics was not to legitimise
capitalism with its «social question», but to find just and efficient solutions to this
question in the framework of capitalism. This kind of economics as a science, and
not as a moral philosophy, has been transferred to the United States under the form
of Institutionalism, but has been killed by the institution of capitalism («academic
freedom» trials, selective recruitments and funding). Let’s consider the
institutionalisation of two types of economics in more detail.
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At Glasgow University, Adam Smith taught «Moral Philosophy, a discipline a
great deal more broadly conceived in that day than ours. Moral Philosophy covered
Natural Theology, Ethics, Jurisprudence, and Political Economy» [44, p. 42].
Smith has not left a textbook of this course but we can judge Moral Philosophy
courses of that time in Britain by looking at the manual “Principles of Moral and
Political Philosophy” by William Paley (1743–1805). Paley lectured at Cambridge
University courses on the New Testament and moral philosophy, which
subsequently formed the basis of his manual. Now he is best known as a
theologian, the author of the book «Natural Theology». Keynes suggested that
Paley was «the first of the Cambridge economists» [48, p. 91]. Paley’s manual
«Principles of Moral and Political Philosophy» contains reasoning oriented to
justify different types of formal and informal rules in force in Britain. Some parts
of this book are devoted to the economic domain, for example property and
different kinds of contracts concerning sale, lending of inconsumable property and
money, contracts of labour service or labour partnership and so on, and others to
civil rights, duties, and the civil government. Altogether the book can be
considered as a collection of justifications of the existing social order. Many of
these justifications are purely theological. The manual has a special part entitled
«Duties Towards God» and a chapter «Of the Duty of Civil Obedience, As Stated
In the Christian Scriptures». Paley admits that the whole system of reasoning in
the book justifying different kinds of rules supposes the affirmative answer to the
question: «Will there be after this life any distribution of rewards and punishments
at all?» Adam Smith followed the intellectual habit of his time of putting God in
the centre of their deductive system. Thinkers of that time consider God as the
source of existing regularities in the world. For Newton, the source of nature’s
regularities was the Creator. For Adam Smith, the source of socio-economic
regularities was the same; his ‘invisible hand’ was the Divine Hand. Antony
Waterman, Professor of Economics at the University of Manitoba, on the basis of
analysis of the text of «Wealth of Nations», came to the conclusion that the words
«nature» and «natural laws» play in this text the same role as the words «God» and
«Divine Laws» played in traditional theological texts [92, p. 90 - 95]. This
substitution allowed Smith to present the social world as analogous to the natural
world with its «natural laws». «Wealth of Nations» was the first book on
economics to catch the public's attention and it started the tradition of mainstream
economics in justifying the laissez-faire belief, the founding belief of the capitalist
institutional system, formulated first by Boisguilbert and Turgot.
The Smithian economics was taught in American universities: «The purpose of
higher education in pre-Civil War America was to teach piety and discipline. The
vast majority of the faculty were involved in preaching and missionary work <…>
The first American economics textbooks were written by clergymen, and a
religious understanding of economic activity was pervasive. Capitalism and the
laws of political economy were thought to be in harmony with the laws of god and
consistent with the higher purpose of moral elevation» [31, p. 64]. In the
anticlerical post-revolutionary France Say «was inclined to utilitarian assessment
of religion» and wrote on «political usefulness of religions» [28, p. 27, 28]. In
Britain John Stuart Mill considered Benthamian Utilitarianism as «a religion; the
inculcation and diffusion of which could be made the principal outward purpose of
a life» [60, p. 40]. Mill, being agnostic, definitely transferred the legitimacy of
political economy from religion to science. He characterised political economy as
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essentially an abstract science and its method as an a priori method. According to
him «it reasons and must necessarily reason from assumptions, not from facts»
[59, p. 56]. For him, the model for an abstract science is geometry: «Geometry
presupposes an arbitrary definition of a line, «that which has length but not
breadth». Just in the same manner does Political Economy presuppose an arbitrary
definition of man» [59, p. 56]. On the basis of this methodology, mainstream
economics takes as its starting point the marginalist revolution, which was the basis
for the institutionalisation of economics in Great Britain at the end of the 19th
century. Marshall, the central figure in this institutionalisation, developed his
vision of economics as a «science» very similar in its approach to moral
philosophy. This type of economics was welcomed by American businessmen who
at that time increasingly replaced clergymen on college and university boards of
trustees [16, p. 440]: «University leaders (presidents and boards alike) often
favoured [economics and other social sciences] as «secular substitutes for religion»
and saw in them a continuation of the old courses in moral philosophy» [31, p. 66].
In this way capitalism, together with the institution of the university began to shape
the institution of economics which led the profession of economists to present-day
mainstream economics.
The link between scientific research and universities was first created in
Germany at the beginning of the 19th century with the reforms of Wilhelm
Humboldt, started in 1810 in the newly created University of Berlin. This
university became the first so-called research university, i.e. research and
educational establishment at the same time. University professors were invited, and
even obliged, to do their research inside the universities. Humboldt’s concept
considered science not as something accomplished that teachers should transfer to
students, but as «a problem which has not yet been solved» and the search for its
solution should be unceasing. According to him «the university teacher is therefore
no longer a teacher and the student no longer someone merely engaged in the
learning process but a person who undertakes his own research, while the professor
directs his research and supports him in it» [47, vol. XIII, p. 261]. German
academic economists of the second half of the 19th century followed natural
sciences research tradition with their experimental method. They were affiliated
neither with Smithian nor Marxian economics, which were based on Mill’s
methodology with its a priori method. Both the scope and method of German
economics were different from the economics of Smith and Marx. In the scope of
their analysis there were not only quantitative variables such as production,
consumption, labour, values, prices and capital, but, above all, qualitative entities:
institutions; i.e. rules and beliefs. Gustav Schmoller, the leader of German
economists at that time wrote: «The present-day economics (Volkswirtschaftslehre)
has come to a historical and ethical conception of the state and society, quite
different from that which had been formulated by the rationalism and the
materialism. It is no longer a mere theory of market and exchange, a kind of
political economy of business, which threatened to become a class weapon of the
wealthy. It became once again a great political and moral science, which studies
production of goods but also their distribution, the phenomena of exchange, but
also economic institutions. It puts again the man in the centre of science, rather
than goods and capital» [76, p. 202 - 203].
Schmoller and his colleagues based their research on the assumption that «major
sources of social regularity were common morals, ethics, and institutions» [35, p. 160].
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Thus, to understand socio-economic phenomena it was necessary «to study all
those institutions that had emerged over time to constrain and mould individual
behaviour into purposive action and social interaction» [35, p. 160]. This kind of
study could be nothing more than an analysis of talks and texts of actors. Schmoller
believed that economic and social science had the same epistemology as natural
science, with the distinction that it should be hermeneutic. The
discursive/hermeneutic stance of German economists of the 19th century had come
into being under the influence of Wilhelm Dilthey, whose «Introduction to the
Human Sciences» was highly rated by Schmoller [76, p. 175 - 183]. German
economists did their research collectively: They were organised in a Union for
Social Policy (Verein für Sozialpolitik), a research body with the objective of
providing scientifically derived information for politicians, the public, legislators
and government officials, who would then use this «scientific» information as a
basis for policy decisions, and thereby not blinded by the fog of «partisan
economics» [35, p. 179]. Founders of this Union shared their general frustration
with the mode of reasoning of classical economics «that seemed wholly at odds
with the positivist and materialist scientific climate of the time when the natural
sciences were celebrating success upon success by working empirically»
[35, p. 123]. Thanks to this Union in the community of German economists, good
professional practice became identified with empirical research. The Union guided
and organised economic research by its agenda-setting standing committees of
annual conferences. These conferences were not just meetings of members of the
profession sharing with each other results of their research. These conferences were
places of debate of commissioned studies: «In advance of conferences, the Union’s
standing committee held meetings to nominate and vote on the subjects to be
discussed at the conferences. Sets of questions were then raised and parameters set
for research and fieldwork (or in the case of surveys, detailed questionnaires were
drafted and sent out) by a commissioned expert, and increasingly, groups of
experts. The results of these investigations and surveys would then be compiled
into summary studies which were circulated before conferences <…> Following
the conferences, commissioned studies were published in the Union’s monograph
series» [35, p. 69 - 70]. We can say now that the activities of the Union for Social
Policy were in many respects similar to the activities of the Royal Society of
London: members of the Union and Society collected data in the framework of
experimental situations, working out of detailed reports and collectively evaluated
them. The German institution of economics, with this Union as its integral part,
was created under the leadership of Schmoller, collaborating very closely with
Bismarck government.
In the United States, the institution of economics under the form of Wisconsin
Institutionalism was in many respects similar to the German one. The role of
Schmoller was played by John R. Commons who saw the sources of socio-
economic regularities in law and ethics [18]. He collaborated very closely with the
administration of the governor/senator of the state of Wisconsin, Robert La Follette.
In Wisconsin, the German model has even been improved: in addition to historical
and monographic research, researchers began to use a technique which was later
called Action Research. It was done under the auspices of the Wisconsin Industrial
Commission, which served as a laboratory for the Commons’ group where they did
their investigations. Richard Ely, initially teacher and later boss of Commons, is
now known almost exclusively as the founder of the American Economic
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Association. It is not widely known that Ely and his colleagues, who obtained
PhD degrees in economics in Germany, wanted to create an American version of
the Schmollerian Union, but they had failed to do so because of the strong
resistance they met. Ely transmitted to Commons the Schmollerian method of
research which included, as a central element, direct contacts with actors and the
Humboldtian method of university teaching; that is the involvement of students in
the research process. Ely has witnessed: «He [professor Commons] kept in touch,
on one hand, with labour and, on the other, with the management of industry. He
mingled with all classes of people. He introduced to his classes people <…>, who
were regarded as very dangerous radicals. To him, these people were simply
human representatives, whom his students should know face to face. On the other
hand, he was just as eager to have his classes know capitalists and leaders of
industry. He could admire a labour leader; he could understand the slugger; and he
had a great admiration for the big industrial leaders. In order to understand their
point of view, he became a member of the Wisconsin Industrial Commission, while
on a leave of absence from his university duties» [25, p. 187 - 188]. As Philip
Mirowski wrote: «Many of the economic functions of the US government that we
take for granted today were the handiwork of Commons and his students in the first
half of the twentieth century» [62, p. 1027]. John Commons called interviewing
«the prime method of investigation» [17, p. 106]. He made case studies of the past
and present. In Wisconsin University Commons offered a course based mainly on
the study of reported legal cases, involving a correlation of law, economics and
psychology. He wrote: «Academic teaching is merely brains without experience.
The «practical» extreme is experience without brains. One is half-baked
philosophy – the other is rule-of-thumb» [19, p. 160].
At the end of the19th century many young American economists received their
PhD degrees in German research universities. It was a time when a hostile
coexistence between theology-like and research-oriented currents of economic
thinking, with its origins in Germany, was yet possible in American universities.
The institutionalisation of American economics had just started and punitive
sanctions from outside of the profession were necessary to orient it in favour of the
owners and managers of capital. As A.W. Coats indicates, «it is easy to understand
why the shift of emphasis from teaching of established truths to the advancement
of knowledge and the investigation of current problems was liable to generate
frictions between the social scientists and certain segments of their audience»
[16, p. 439]. He explained these frictions in the following way: «The late
nineteenth century was a time of disturbing economic, social, and political
tensions, and the fact that the business community was generally getting a bad
press when the economists were undertaking more thorough studies of their
activities increased the likelihood that even the most objective and impartial
enquiries would furnish ammunition for the innumerable critics of contemporary
capitalism <…> Laissez-faire and conservative social Darwinism were still the
ruling beliefs among members of the social and business elites, whereas many of
the younger social scientists were reformers who regarded uninhibited
individualism and unfettered competition as the cause of many , if not most,
current economic and social evils» [16, p. 439 - 440]. Academic freedom was
trampled: «During the wave of academic freedom cases that spanned from the
1890s to the 1910s, many economists came under sharp public attack for
promoting views that offended powerful constituencies in matters as varied as the
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labour movement, free silver coinage, public utility franchises, or fiscal policy»
[31, p. 79]. The profession of academic economists «became increasingly
accountable to external control (such as boards of trustees and university
administrators, or state legislatures in the case of public universities) <…> The
turn-of-the-century political attacks against progressive social scientists set the
limits of acceptable behaviour and drove them to confine their scholarship to
«safe» intellectual ground» [31, p. 79]. Neoclassical economics especially in its
mathematical form in this period «was ideal for serving such ground. That is the
reason why it became an «attractive» research strategy by American economists,
especially by the younger generations who had to create a position for themselves»
[31, p. 79 - 80]. This is a very clear description of the shaping of the institution of
economics by the institutions of capitalism and university.
Economists such as Richard Ely and John Commons did not share the laissez-
faire belief, they opposed to it a Christian one. One of the factors influencing the
institutional evolution of the discipline of economics in the United States was the
demise of the Social Gospel movement and the use of the image of science to
legitimate conservative opinions [5]. The discourse of the Social Gospel movement
concerning religion, social justice and welfare was substituted by the discourse of
conservative economists about science, efficiency, and free enterprise. The role of
advocates of the Social Gospel movement in economics was important: «Not all
American economists in 1920 would have happily identified with the whole range
of Ely’s and Commons’s work <…> but in the glow of the Social Gospel’s golden
years, historical and institutional approaches were accepted and respected»
[5, p. 41]. Acceptance and respect disappeared, or at least decreased, with the
switch from the image of science as an experimental activity to a purely theoretical
one, in which just the fact of using mathematics already signifies its scientific
character: «Whereas institutional economics seemed perfectly «scientific» in 1922,
by 1947, it was no longer unquestionably regarded as such» [5, p. 48]. Academic
freedom in the case of the discipline of economics is very relative: «During the
twentieth century, there have been primarily four patrons of economics: higher
education, the government, the business community, and charitable foundations»
[34, p 54]. Practically all of them contributed, including by selective financing, to
the gradual diminution of the weight of any current of economic thought different
from neoclassical and considered as troublemaking [34, p. 78 - 79].
As is well known, after World War Two, Friedrich Hayek contributed to the
ascent of laissez-faire by the foundation in 1947 of the Mont Pèlerin Society. He
invited scholars, mostly economists, with some historians and philosophers, to
meet at Mont Pèlerin, Switzerland, to discuss the state, and possible fate of
classical liberalism and how to combat the «state ascendancy and Marxist or
Keynesian planning [that was] sweeping the globe». «The international academy
Hayek sought was actually designed to create a space where like-minded people
who shared philosophical ideas and political ideals could mingle and engage in a
process of further education and collective learning dedicated to advancing a
common neoliberal cause. The effort of the incipient neoliberal thought collective
led to the creation of a comprehensive transnational discourse community»
[65, p. 5]. Hayek remained as president of this society until 1961, and in 1974 he
was awarded The Sveriges Riksbank Prize in Economic Sciences in Memory of
Alfred Nobel, founder of the Nobel Prize. Usually it is called «Nobel Prize in
Economics», but in reality it has nothing in common with the testament of Alfred
http://en.wikipedia.org/wiki/1947
http://en.wikipedia.org/w/index.php?title=Mont_Pelerin&action=edit&redlink=1
http://en.wikipedia.org/wiki/Switzerland
http://en.wikipedia.org/wiki/Classical_liberalism
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Nobel according to which «prizes [should be awarded] to those who, during the
preceding year, shall have conferred the greatest benefit on mankind». We can
even suppose that the most eminent promoters of laissez-faire were awarded with
this prize for their activities as presidents of the Mont Pèlerin Society (Friedtich
Hayek: president 1947-61, Nobel Prize 1974; Milton Friedman: president 1970-72,
Nobel Prize 1976; George Stigler: president 1976-78, Nobel Prize 1982;
James M. Buchanan: president 1984-86, Nobel Prize 1986; Gary Becker: president
1990-92, Nobel Prize 1992). I do not think that courses on the history of economic
thought should present the teachings of these persons as just pieces of intellectual
history as Bruce Caldwell does with an evident admiration for Hayek [12]; «the
key to understanding the turns and reversals in his thought lay in his politics, and
not as Caldwell has it, in some abstract philosophical doctrines» [64, p. 351].
All this led to the situation characterised recently by Joseph Stiglitz:
«Economics has moved – more than economists would like to think – from being a
scientific discipline into becoming free market capitalism’s biggest cheerleader. If
the United States is going to succeed in reforming its economy, it may have to
begin by reforming economics» [84, p. 238].
5. Mathematisation of economics and three beliefs of mathematicians
From the very beginning of its existence, mathematics appeals to the ontology
which is called in the Table 1 Newtonian Ontology. With its orientation towards
space and time, things and events, and causality, mathematics is not at all suited to
any deep research in social sciences. In their recent book George Akerlof and
Rachel Kranton acknowledge that quantitative studies oriented to the identification
of causality are useful, «but they may only hint at what we really want to know»
[1, p. 117]. They suggest that economists undertake an ethnographers’ style of
research: «From the many details they record, and the attention they give to the
subtexts of what people say, they construct a consistent picture of the people’s
behaviour. Indeed, the very best ethnographic studies do not just record what
people say; they decode what people say and do» [1, p. 116 - 117]. It is exactly in
this way that Boisguilbert started economics by, in one way, imitating the
experimental practices of natural sciences, and, in another way, transforming them
for the needs of social research. This kind of transformation was impossible in the
application of mathematics to economics because of its ontological inadequacy.
Application of mathematics in economics was and continues to be a realisation
of Descartes’ error [20] and Descartes’ dream [22]. Descartes was a real
personification of the Enlightenment: «Cartesianism destroyed the balance which
underlies true science: the balance between thinking and observing, deduction and
induction, imagination and common sense, reflection and action, reason and
passion, abstract thinking and realism, the world within and the world without the
mind. Under the impact of Cartesianism the second element of the equation was
sacrificed to the first <...> Descartes’ epistemological reflections opened an era of
axiomatic, unhistorical, deductive thinking broadly called the Enlightenment»
[61, p. 39]. The Cartesian dualism with its separation of knowing from doing,
object from subject, fact from value, theory from practice serves an
epistemological foundation for neoclassical economics [11, p. 65]. Systems studied
by economic science are never simple and that is why a priori theories do not have
any chance to serve as a basis for the understanding of economic phenomena. No
http://en.wikipedia.org/wiki/F._A._von_Hayek
http://en.wikipedia.org/wiki/F._A._von_Hayek
http://en.wikipedia.org/wiki/Milton_Friedman
http://en.wikipedia.org/wiki/George_Stigler
http://en.wikipedia.org/wiki/James_M._Buchanan
http://en.wikipedia.org/wiki/Gary_Becker
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testing of this kind of theories would help: «Cut off from observation as a source of
truth, the Cartesian mind puts great emphasis on «testing» to reaffirm its realism.
But testing is not a guarantee of correct ideas because, having lost its mooring in
reality, the economic mind has created so many conundrums, puzzles and purely
mental constructs that testing proves everything and nothing» [61, p. 41].
Nicolas de Condorcet was certainly a Cartesian in its «Social Mathematics»
[29], but he was able to understand that mathematical language can be «very far
from leading to more precise ideas». He explains, more generally, that «quantity of
the universal commodity (i.e., money), or of some particular commodity, can be
considered as numbers. The economic sciences are indeed quantitative in this
sense. But «the desire to buy and the desire to sell are not susceptible to any
calculation, and yet variations in price depend on this moral quantity, which itself
depends on opinions and on passions» [68, p. 175 - 176]. Condorcet shared the
economic views of Turgot [68, p. 84] but did not create a mathematical version of
his economic theory. It is Augustin Cournot who is considered as the first
mathematizer of economics. The question arises why the mainstream mathematical
economics did not follow Cournot but Walras and Jevons? We can conclude from
the third section of this article that the answer is very simple: because Cournot in
his writings was not advocate of laissez-faire [78]. Economics as a moral
philosophy legitimising capitalism and rationalising its negative consequences
needed strong justifications to be considered as a «science». The best way to do it
was its mathematisation. William Stanley Jevons and Léon Walras made this work.
As I already told in the Introduction, their marginalism was nothing more than a
continuation of economics as a moral philosophy (in spite of its mathematical
clothes) with its vision of social life as a network of exchanges and its invisible
hand of their regulation. The general equilibrium theory of Walras with its
independent egoistically oriented individuals making exchanges on the basis of
equilibrium prices could be easily interpreted as a continuation of theoretical
constructions of the political economy of the 19th century at the service of
capitalism (see Section 3 of this article).
The British universities channelled the institutionalisation of economics towards
its mathematization because «mathematics [considered as a heritage of Antiquity]
throughout the nineteenth century reigned at Cambridge as a fundamental
component of the prestigious tripos examination system» [31, p. 149]. In this
intellectual atmosphere, it is the connection of a discipline with the mathematical
method, and not with the experimental one, which was the decisive sign of the truly
«scientific» character of the discipline. In order «to merit» this indication, British
economists were oriented towards «the progressive elimination of most inductive
and historical elements from the core of political economy, and concomitant
ascendancy of the deductive method» [31, p. 149]. Alfred Marshall stood at the
origins of the modern institution of economics. This institution has been founded
by usage of Jevons’ and Walras’ ideas. In spite of the fact that in his «Principles of
Economics»Marshall put all mathematical formula in the appendix we can without
any doubt say that his economic reasoning was mathematical. This direction of the
institutionalisation of economics was very closely connected with the first founding
belief of the community of mathematicians expressed by Galileo: «Philosophy is
written in that great book which ever is before our eyes – I mean the universe – but
we cannot understand it if we do not first learn the language and grasp the symbols
in which it is written. The book is written in mathematical language, and the
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symbols are triangles, circles and other geometrical figures, without whose help it
is impossible to comprehend a single word of it; without which one wanders in
vain through a dark labyrinth» (quoted in [10, p. 75]). This belief takes the
following form in mainstream economics: «Samuelson’s signature method of
economic theory, illustrated in his «Foundations» (1947), seems to follow two
rules which can also be said to characterize much of Neoclassical economics since
then: With every economic problem, (1) reduce the number of variables and keep
only a minimum set of simple economic relations; and (2) if possible, rewrite it as
a constrained optimization problem» [73, p. 144]. By modelling economic agents
in this way, he hoped to be able to predict their behaviour in much the same way
that physicists predicted the behaviour of physical objects» [85, p. 21].
As was brilliantly shown by Philip Mirowski, neoclassical economics has its
mathematical origins in thermodynamics: «The supposed mystery of the
«simultaneous discovery» of neoclassical economics in the 1870s and 1880s is
dispelled when it is realized that energy physics has filtered down to some
textbooks by the 1860s, and is rapidly becoming the primary metaphor for the
discussion of the physical world» [63, p. 217]. The formulation of neoclassical
theory in the 1870s was just a «metaphorical appropriation of the analytical
structure of mid-nineteenth century physics. «Neoclassical economics is thus seen
not as a «discovery», but as an arbitrary imposition onto social reality of a
paradigm taken from an alien field of knowledge» [13, p. 741]. Paul Samuelson
continued this metaphorical practice. His working method was the same: to
reproduce the application of mathematical methods in physics to economics.
Samuelson was not a physicist but he «had an acquaintanceship with scores of
leading world mathematicians and physicists» and received «essential hints» for his
work from a thermodynamicist [73, p. 155].
What attracted those who mastered and loved mathematics to economics? I
suppose it was, and continues to be, the ease with which they can be more highly
valued in the profession of economics than in the profession of mathematics.
Because of the tradition, coming from the University of Cambridge, of considering
the application of mathematics as a summit of «scientificity», it was very attractive
to enter the scientific community via economics with more chance of succeeding
and with far less effort than would have been required in mathematics or physics.
Once Samuelson said: «I became an economist quite by chance, primarily because
the analysis was so interesting and easy» [85, p. 33]. It was as easy «as fishing in a
virgin Canadian lake. You threw in your hook and out came theorem after
theorem» [73, p. 154]. In my opinion, it was the comparative easiness of
Samuelson’s version of working on papers for professional journals and teaching
their type of economics which was one of the important causes of the final victory
of their line of economic thought over interpretive/historical/discursive
institutionalism in economics. The interpretive/historical/discursive institutionalist
version of teaching economics, by the involvement of students in research
concerning burning socio-economic-political problems, requires much more effort
by professors than just repeating, with no very great changes, quite simple
mathematical constructions and supervising solutions by students of numerical
examples illustrating these constructions. Those university graduates with a good
mathematical background who are looking for a job valorising their mathematical
skills could be very much attracted by the profession of academic economists in its
neoclassical version.
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After World War Two a very close interaction between the community of
economists and that of mathematicians [94] resulted in the adoption by economists
of two other founding beliefs shared by mathematicians. Their second founding
belief is the aesthetic character of mathematics [80]. It is a very important element
of the mathematical culture [45, p. 46 - 47]: «Everyone agrees that mathematics
can, should, or even must, be beautiful. But it is not so easy to explain just what
you mean by beautiful mathematics. What patterns, proofs and discoveries do
mathematicians call beautiful?» [45, p. 47]. Hereby is an authoritative witness:
«Mathematics, rightly viewed, possesses not only truth, but supreme beauty — a
beauty cold and austere, like that of sculpture, without appeal to any part of our
weaker nature, without the gorgeous trappings of painting or music, yet sublimely
pure, and capable of a stern perfection such as only the greatest art can show. The
true spirit of delight, the exaltation, the sense of being more than Man, which is the
touchstone of the highest excellence, is to be found in mathematics as surely as
poetry» [70, p. 60]. The consequences of this belief of mathematicians transferred
to the community of economists were disastrous. Paul Krugman expressed it in the
following way: «As I see it, the economics profession went astray because
economists, as a group, mistook beauty, clad in impressive-looking mathematics,
for truth» («The New York Times», 2 September 2009).
The third founding belief of the majority of the mathematicians coming from
David Hilbert, and reinforced by Nicolas Bourbaki, is the opinion that
mathematicians must not care about the links of mathematical constructions with
reality they have to deal exclusively with the internal logic of mathematical
structures themselves [57]. Philip Davis and Reuben Hersh, on the basis of their
interviews with mathematicians and participant observation inside their
community, produced a generalised image of the Ideal Mathematician. The authors
conventionally called the topic of this imaginary mathematician «the theory of non-
Riemannian hypersquares». This problem has acquired great prestige just because
«the best non-Riemannian hypersquarers have worked on the problem, obtaining
many partial results». Our Ideal Mathematician is not very much interested in
application of his work outside of mathematics: «I've been told that some attempts
have been made to use non-Riemannian hypersquares as models for elementary
particles in nuclear physics. I don't know if any progress was made». He is not
concerned about the connection of what he is doing with reality: «I never thought
hypersquares existed. When I say they do, all I mean is that the axioms for a
hypersquare possess a model. In other words, no formal contradiction can be
deduced from them, and so, in the normal mathematical fashion, we are free to
postulate their existence. The whole thing doesn't really mean anything, it's just a
game, like chess, that we play with axioms and rules of inference». Today
mathematics as a discipline is totally self-referential: «How could we as
mathematicians prove to a sceptical outsider that our theorems have meaning in the
world outside our own fraternity? If such a person accepts our discipline, and goes
through two or three years of graduate study in mathematics, he absorbs our way of
thinking, and is no longer the critical outsider he once was. In the same way, a
critic of Scientology who underwent several years of «study» under «recognized
authorities» in Scientology might well emerge a believer instead of a critic»
[21, p. 34 - 44].
This kind of mathematics has emerged under the influence of a group of French
mathematicians who published their books under the pseudonym Nicolas Bourbaki.
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They tried to present the whole of mathematics on the basis of axiomatic method
which they understood in the following way: «The axiomatic method is, strictly
speaking, nothing but this art of drawing up texts whose formalization is
straightforward in principle. As such it is not a new invention; but its systematic
use as an instrument of discovery is one of the original features of contemporary
mathematics. As far as reading or writing a formalized text is concerned, it matters
little whether this or that meaning is attached to the words, or signs in the text, or
indeed whether any meaning at all is attached to them; the only important point is
the correct observance of the rules of syntax» [9, p. 8]. E. Roy Weintraub and
Philip Mirowski have brilliantly shown «how the Bourbakist school of
mathematics rapidly migrated into neoclassical mathematical economics. Crossing
this disciplinary boundary established, for economists, the imposing edifice of
Walrasian general equilibrium theory, the landmark of high theory in economics
for the next four decades» [93, p. 246]. It was Gerard Debreu, trained in France by
a member of Bourbaki group, who was «transoceanic gemmule» of Bourbakist-
inspired applied mathematics that «took root and flourished in the postwar
American environment» [93, p. 248]. The «seedbed» for this kind of economics
was the Cowles Commission, many collaborators of which have come to it from
physics [93, p. 249]. Bourbaki’s purity of axiomatic approach and their isolation
from other disciplines «has drawn the wrath of many natural scientists» ; «for
many scientists, Bourbaki became the watchword for the chasm that had opened up
between mathematics and its applications, between «rigor» and its alternative
homeostat, the dictates of the concrete problem situation» [93, p. 248]. According
to Weintraub and Mirowski, «Debreu intended his Theory of Value to serve as the
direct analogue of Bourbaki's Theory of Sets», «in Debreu's interpretation, general
equilibrium theory thus loses its status as a «model» to become a selfsufficient
«formal structure». The objective was no longer to represent the economy,
whatever that might mean, but rather to codify the very essence of that elusive
entity, the Walrasian system» [93, p. 265]. The Nobel Prize in Economics
Committee announced in its press release that Gerard Debreu has proven that «the
market works automatically» and after 1983 «it was for this reason that he insisted
on the strict separation of mathematical form and economic content, excusing
himself with a voice of guilt: «Sorry, I did not mean that» [24, p. 30].
The consequence of the third belief of mathematicians transferred to economists
is a «fairy tale» nature of mainstream economics: «I believe that as an economic
theorist, I have very little to say about the real world and that there are very few
models in economic theory that can be used to provide serious advice» [69, p. 881].
Can you imagine that, for example, Werner Heisenberg could say something
similar? However the author of this declaration is not a marginalised member of
the community of academic economists, but its very honourable member: the text
is part of his Presidential Address to the Econometric Society made in 2004. In this
paper-confession, he continues: «As economic theorists, we organize our thoughts
using what we call models. The word «model» sounds more scientific than «fable»
or «fairy tale» although I do not see much difference between them» [69, p. 881];
«What are we trying to accomplish as economic theorists? We essentially play with
toys called models. We have the luxury of remaining children over the course of
our entire professional lives and we are even well paid for it. We get to call
ourselves economists and the public naively thinks that we are improving the
economy’s performance, increasing the rate of growth, or preventing economic
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catastrophes. Of course, we can justify this image by repeating some of the same
fancy sounding slogans we use in our grant proposals, but do we ourselves believe
in those slogans?» [69, p. 865].
One of the greatest mathematicians of the 20th century Vladimir Arnold opposed
Bourbakism and criticised the trend of high levels of abstraction in mathematics.
According to him it had a negative impact on French, and then later other countries'
mathematical education. He spoke about the danger of fetishising theorems in
modern mathematical textbooks: «I even got the impression that scholastic
mathematicians (who have little knowledge of physics) believe in the principal
difference of the axiomatic mathematics from modelling which is common in
natural science and which always requires the subsequent control of deductions by
an experiment» [2, p. 232]. One of the Arnold’s papers entitled «Mathematical
Epidemics of the 20th century» begins with the sentence: «Modern formalized
education in mathematics is dangerous for all mankind» [2a]. Bourbakism has
strongly influenced mainstream economics which, as the crisis which started in
2007 demonstrated, is certainly also dangerous for all mankind.
Conclusion
The author of this article practiced an institutional approach in economic research
[95] and also in order to understand the functioning of the economic profession
[96]. In both cases it was an approach that is called by political scientists
historical/interpretive/discursive institutionalism, or more generally constructivist
institutionalism. This approach requires direct contacts with members of
communities under study: in the first case they were Russian agrarians and in the
second case – European, American and Russian economists. These direct contacts
were made through participant observations and interviews. Boisguilbert was the
first constructivist institutionalist, followed by Schmoller and Commons.
Schmoller’s Verein für Sozialpolitik included many members who were not
academics but administrators. German economists worked in very close contact
with practical men. On the contrary, the British community of academic
economists followed the tradition of distancing from the latter. Ricardians already
had as the source of their influence «their claim for scientific authority which they
strenuously asserted in books, pamphlets, magazines, newspapers, official
enquiries and parliamentary debates» [16, p. 402]. In their aspiration to look like
«scientists» «the most distinctive feature was their effort to distance themselves, as
experts, from the amateurs, especially despised «practical» men» [16, p. 402].
James Mill, father of J.S. Mill, has formulated it in the following way: «a reasoner
must be hard pressed when he is driven to quote practical men in aid of his
conclusions. There cannot be a worse authority, in any branch of political science,
than that of mere practical men» [16, p. 402]. British political economists of the
19th century tried to simulate the behaviour of natural scientists in a very superficial
way by distancing themselves from «non-scientists», but ignoring the most
important feature of their behaviour: experimental contact with the object under
study. They did not realise that «practical men» for many types of information are
the only sources available. Practical men are elements of the objects of study and
not being in contact with them for those who work as scientists in socio-politico-
economic domains means to work with «switched off recording devices». In the
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domain of natural sciences it would mean the end of the profession of scientific
researcher.
To my mind the attractiveness of the German school of thought comes from the
fact that it produced such a rich set of ideas concerning the social world that they
continue to reappear later. One of its central ideas has been incorporated into the
Social Constructivism: «Institutions always have a history, of which they are the
products. It is impossible to understand an institution adequately without an
understanding of the historical process in which it was produced» [6, p. 72]. That is
why in both my studies direct contacts with members of communities under study
were supplemented by historical analysis. Historical/interpretive/discursive
institutionalism overlapping with social constructivism represents either a social
sciences’ approach or some kind of social sciences’ frame theory. It is this
approach that I am using in this paper for the analysis of economics. Two central
questions which I try to answer in this paper are why German economics has
disappeared and English economics expanded on a tremendous scale. The key to
understanding it gives the social constructivist connections between
institutionalisation and social control: «Institutions, by the very fact of their
existence, control human conduct by setting up predefined patterns of conduct,
which channel it in one direction as against the many other directions that would
theoretically be possible. It is important to stress that this controlling character is
inherent in institutionalisation as such, prior to or apart from any mechanisms of
sanctions specifically set up to support an institution» [6, p. 72]. Constructivist
institutionalism underlines the connection between institutions and ideas/beliefs.
No institution can exist without the idea/belief connected with it. It was almost
always the belief which was linked with the birth and evolution of the institution. I
call these beliefs founding beliefs. We have seen that institutionalisation of
economics in Germany in the second half of the 19th century has been very closely
linked with the idea shared by natural scientists that scientific knowledge is an
experimentally based knowledge. Social control in the community of natural
scientists is finally a control of the veracity of reports concerning conclusions
based on data gathering and experiments. The belief which was linked with the
birth of the institution of British economics was absolutely different. It is the idea
expressed by John Stuart Mill that economics cannot use experimental methods
and should use the a priori method. I think now it is time to reconsider
Methodenstreit.
Bruno Latour, quoted in the first section of this article, was not the only one to
investigate the activities of researchers in natural sciences. The world of high
energy physics was studied by Sharon Traweek (1988). A comparative
investigation of the activities of researchers in the domains of high energy physics
and molecular biology has been made by Karin Knorr Cetina (1991, 1999). The
latter comes to the same conclusions as Latour concerning «the resistance»:
«Molecular geneticists do interact with «the world» – as it is featured in the
laboratory of course, but this featuring does not preclude but rather enhances
resistance. They constitute part of a behavioral system in which «things» are not
passive receivers but active reactants» [49, p. 119 - 120]. At present most
economists consider economics as theory or theories. To do economics mean for
them to develop or to apply theories. According to Knorr Cetina «much of
laboratory science in molecular genetics neither directly draws upon, nor it seems
terribly involved with establishing, theoretical representations. In molecular
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genetics, theoretical statements may indeed be post hoc «representations» of
materials» [49, p. 120]. Apparently neither Latour nor Knor Cetina would agree
with Milton Friedman’s famous statement: «A theory is the way we perceive
«facts», and we cannot perceive «facts» without a theory» [32, p. 34]. Some
sincere mainstream economists do not agree with Friedman either: «By regularities
I mean phenomena that appear repeatedly in similar environments at different
points in time and at different locations. I have the impression that as economic
theorists, we hope that regularities will miraculously emerge from the formulas we
write leisurely at our desks. Applied economists often feel the need for a model
before they mine data for a pattern or regularity. Do we really need economic
theory to find these regularities? Would it not be better to go in the opposite
direction by observing the real world, whether through empirical or experimental
data, to find unexpected regularities? Personally I doubt that we need pre
conceived theories to find regularities» [69, p. 873]. Finally what we learn from
Knorr Cetina’s investigation is the challenge towards the accepted view of a
unified science even in the framework of natural sciences. Research procedures can
sharply differ in different disciplines, but if they represent interaction with the
‘resisting’ entities under study, they certainly can be classified as scientific
research.
The community of researchers of the Royal Society did not earn their living by
their investigating activity. All of them had independent sources of existence which
had no connection with their research work. A century later, Johann Fichte, who
followed Humboldt, founder of the institution of the research university after, saw
the motivation of the researcher in following way: «To me, [to the Scholar], is
entrusted the culture of my own and following ages; from my labours will proceed
the course of future generations, the history of nations who are yet to be. To this
am I called, to bear witness to the Truth: my life, my fortunes are of little moment;
the results of my life are of infinite moment. I am a Priest of Truth; I am in her pay;
I have bound myself to do all things, to venture all things, to suffer all things for
her» [30, p. 59 - 60]. He thought that «the true vocation of the scholar is the most
widely extended survey of the actual advancement of the human race in general,
and the steadfast promotion of that advancement» [30, p. 54]. The
institutionalisation of German economics happened in the Humboldtian university
and its architect, Gustav Schmoller, followed the ideas of Fichte. In this way
Schmollerian Verein had been conceived in a similar way to the Royal Society.
The foundation of the Verein took place quite quickly after German unification.
A united Germany needed national unity and the political crisis of early capitalism
created danger for this unity. This danger came from the existence of the «social
question».
Both Schmoller’s and Marshall’s economics were responses to the existence of
the social question; in England it was even sharper than in Germany, but the
responses were different. The former was oriented to helping the state to solve this
problem by improving the conditions of the working class by introducing new
social legislation, and in this way, to prevent social unrest. The latter was oriented
towards creating scientific-looking ideological constructions legitimising the
existing social order and conditions, and in this way achieving the same goal,
preventing social unrest. Once established the institution of Marshallian economics
more easily attracts the support of those who consider the discipline of economics a
craft rather than a vocation. The work of Schmollerian economists as researchers
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and teachers is much more difficult than that of Marshallian economists. Frequent
surveys/fieldwork and constant adaptation of courses to changing realities are
much more time and labour consuming than the desk work of «a priori theorists».
Very quickly the community of economists-craftsmen can become an inaccessible
fortress for those who would like to practice economics as a vocation with
primarily socially-oriented aspirations. The problem with Schmollerian economics
in comparison with Marshallian economics is not only social but also economic
and political. Surveys and fieldwork require strong financial and political support
from governments (local and/or central). The political support of Schmollerian
scholars is necessary because their research activity can uncover inconvenient
details about the functioning of private enterprises. Resistance to Schmollerian
economists can occur in the organisation of surveys and field studies, in financing
or in the domain of the recruitment and promotion of teachers/researchers
controlled by university boards with businessmen as its members.
After World War II, two organisations sponsored by businessmen, Cowles
Foundation and Mont Pelerin Society, extended the influence of mainstream
economics in universities and societies. The prestige of this economics has been
supported by the creation of the so-called Nobel Prize in Economics. This
influence determined the course of the American (Reagan’s) and the British
(Thatcher’s) governments, and later produced massive deregulations throughout
the world. This moral philosophy with the vision of social life as a network of
exchanges of commodities and services between egoistically-oriented homo
oeconomicus moved by the desire of unlimited consumption, which is propagated
by mainstream economics, conquered the world. This conquest is one of the factors
of the extraordinary stability of the institution of economics dominated by the
mainstream. A reform of the discipline of economics should take the form of a
return, on modern foundations, to the traditions of the Historico-Ethical school of
Gustav Schmoller [51; 67] and of the Wisconsin institutionalism of John Commons
[71; 15].
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http://www.journaldumauss.net/spip.php?article686
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| id | nasplib_isofts_kiev_ua-123456789-131839 |
| institution | Digital Library of Periodicals of National Academy of Sciences of Ukraine |
| issn | 2409-8876 |
| language | English |
| last_indexed | 2025-12-07T16:14:23Z |
| publishDate | 2016 |
| publisher | Інститут телекомунікацій і глобального інформаційного простору НАН України |
| record_format | dspace |
| spelling | Yefimov, V. 2018-04-04T15:57:17Z 2018-04-04T15:57:17Z 2016 How Founding beliefs of Capitalism, University and Mathematics Shaped the Institution of Mainstream Economics / V. Yefimov // Математичне моделювання в економіці. — 2016. — № 1(5). — С. 30-58. — Бібліогр.: 96 назв. — англ. 2409-8876 https://nasplib.isofts.kiev.ua/handle/123456789/131839 330.101 The article shows that mainstream economics, which now includes such current as new institutional economics, is the result of an evolution shaped by three institutions (capitalism, university and mathematics) by imposing to the profession of economists their founding beliefs. These beliefs are: «laissez-faire»; «economic knowledge has a priori and exegetical character»; «all mathematical entities exist in reality»; «beauty is a criterion for theoretical constructions»; «scientific research is a play with axioms and rules of inference». Because of these beliefs mainstream economics, based on mathematical constructions arbitrarily borrowed from the physics of the nineteenth century, remains cognitively sterile and socially detrimental. У статті доводиться, що магістральний напрям економічної дисципліни, яка в даний час включає в себе таку піддисципліну, як нова інституціональна економічна теорія, сформувався під вирішальним впливом трьох інститутів (капіталізму, університету та математики), які нав'язали професії економістів їх основні вірування-переконання. Це такі вірування-переконання: «Laissez-faire», або шкідливість державного втручання в економіку; «Економічні знання мають апріорний і экзегетичний характер»; «Всі математичні об'єкти існують у дійсності»; «Краса є важливим критерієм оцінки теоретичних побудов»; «Наукове дослідження є грою з аксіомами і правилами виведення». Через ці вірування-переконання магістральний напрям економічної дисципліни, заснований на математичних побудовах, довільно запозичених з фізики дев'ятнадцятого століття, залишається пізнавально стерильним і соціально шкідливим. В статье доказывается, что магистральное направление экономической дисциплины, которая в настоящее время включает в себя такую поддисциплину, как новая институциональная экономическая теория, сформировалось под решающим влиянием трех институтов (капитализма, университета и математики), которые навязали профессии экономистов их основные верования-убеждения. Это такие верования-убеждения: «Laissez-faire», или вредность государственного вмешательства в экономику; «Экономические знания имеют априорный и экзегетический характер»; «Все математические объекты существуют в действительности»; «Красота является важным критерием оценки теоретических построений»; «Научное исследование является игрой с аксиомами и правилами вывода». Из-за этих верований-убеждений магистральное направление экономической дисциплины, основанное на математических построениях, произвольно взятых из физики девятнадцатого века, остается познавательно стерильным и социально вредным. en Інститут телекомунікацій і глобального інформаційного простору НАН України Математичне моделювання в економіці Математичні та інформаційні моделі в економіці How Founding beliefs of Capitalism, University and Mathematics Shaped the Institution of Mainstream Economics Як вірування-переконання, що супроводжували виникнення і розвиток капіталізму, університету і математики, рішучим чином вплинули на формування інституту магістрального напряму економічної дисципліни Как верования-убеждения, сопровождавшие возникновение и развитие капитализма, университета и математики, решительным образом повлияли на формирование института магистрального направления экономической дисциплины Article published earlier |
| spellingShingle | How Founding beliefs of Capitalism, University and Mathematics Shaped the Institution of Mainstream Economics Yefimov, V. Математичні та інформаційні моделі в економіці |
| title | How Founding beliefs of Capitalism, University and Mathematics Shaped the Institution of Mainstream Economics |
| title_alt | Як вірування-переконання, що супроводжували виникнення і розвиток капіталізму, університету і математики, рішучим чином вплинули на формування інституту магістрального напряму економічної дисципліни Как верования-убеждения, сопровождавшие возникновение и развитие капитализма, университета и математики, решительным образом повлияли на формирование института магистрального направления экономической дисциплины |
| title_full | How Founding beliefs of Capitalism, University and Mathematics Shaped the Institution of Mainstream Economics |
| title_fullStr | How Founding beliefs of Capitalism, University and Mathematics Shaped the Institution of Mainstream Economics |
| title_full_unstemmed | How Founding beliefs of Capitalism, University and Mathematics Shaped the Institution of Mainstream Economics |
| title_short | How Founding beliefs of Capitalism, University and Mathematics Shaped the Institution of Mainstream Economics |
| title_sort | how founding beliefs of capitalism, university and mathematics shaped the institution of mainstream economics |
| topic | Математичні та інформаційні моделі в економіці |
| topic_facet | Математичні та інформаційні моделі в економіці |
| url | https://nasplib.isofts.kiev.ua/handle/123456789/131839 |
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