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Topics in Institutional Economics

Paper Session

Saturday, Jan. 5, 2019 12:30 PM - 2:15 PM

Hilton Atlanta, Crystal C
Hosted By: Association for Evolutionary Economics
  • Chair: David A. Zalewski, Providence College

Homo Oeconomicus Returns: Neoliberalism, Socio-Political Uncertainty And Economic Policy

Paolo Ramazzotti
University of Macerata


The aim of this paper is to discuss how neoliberal policy is changing the way people conceive of the economy and of society. After a brief outline of the main features of neoliberal policies, it argues that neoliberalism does not consist in a mere set of wrong economic theories or in the plain reflection of vested interests. It is a full-fledged view of how society should be organized. The paper then argues that these policies and the ideology that backs them up determine major institutional changes which affect economic, social and polity-related variables but also the general understanding that people have of the economy and of society. More specifically, it enhances uncertainty about one’s future and favors a non-solidaristic view of social relations. These changes tend to prejudge the effectiveness of employment policies and to reinforce the neoliberal consensus. The conclusion is that it is not possible to conceive of an appropriate macroeconomic policy unless institutional changes are taken into account that transcend macroeconomics as such and re-establish the social underpinnings for that policy. These include changes in how the economy is coordinated but also changes in the bargaining power of workers and citizens relative to business.

Financialization, Financial Conservatism and Class Interests: Reconsidering Karl Polanyi’s Protective Response

David A. Zalewski
Providence College


One of the most widely-discussed insights from Karl Polanyi’s The Great Transformation is his notion of the double movement. The first part of this process involves the establishment of self-regulating markets by commodifying labor, land, and money to ensure that capitalists have adequate supplies of resources to produce output sufficient enough to provide an acceptable return on long-term investments. Because of the resulting social and environmental damage, a spontaneous protective response arises when people from all social classes organize to counteract the intellectual foundations and political infrastructure of economic liberalism. This paper examines the transitional period between these two phases of the double movement. It argues that in many countries, members of all socioeconomic classes initially support policies promoting currency stability during times of economic distress but mounting damage from austerity policies needed to support financial conservatism eventually reaches a “tipping point” in which people organize to counteract to pressure for policy changes. Since this transition generates significant levels of uncertainty that further depresses economic activity, officials should quickly adopt policies to shorten the duration of these transitional periods.

Financialization and Capital Accumulation

Carlos Aguiar de Medeiros
Federal University of Rio de Janeiro
Fabian Amico
Metropolitan University


In the 1950s, Joan Robinson stated that "where enterprise leads finance follows", thus describing a financial system that simply followed the trajectories defined by the productive sector, a perspective usually associated to the “regulated” capitalism created in Bretton Woods. In contrast, recent structural changes mark the growing importance of "financial motives". Thus, financial activities have grown disproportionately compared to other activities. This aroused a growing discussion in Keynesian and Marxian economists about the structures of modern capitalism and the role played by the “dominance of finance” on capital accumulation suggesting growing and antagonistic interests between finance and productive capital. The role played by finance in capital accumulation was old concern in heterodox thinking. Marx and Veblen explored the dichotomy of capital as property and the capital in its productive function. Nevertheless, the behavior of interest rates in the course of financialization, has been the opposite of what would be expected of an era of "return of the rentier". It seems that the governments of developed countries have applied Keynes's prescription with respect to so-called "euthanasia of the rentier". However, never was so large the size of rents and speculative investment. This new configuration raised the question of how financialization affect the investment processes in the non-financial sector. The main purpose of this paper is to examine along modern Marxian and Keynesian perspectives some evidences and interpretation on the effects that financialization may have on the demand side of the economy and through this effect on the accumulation of capital.

Crime in the late 19th and Early 20th Century United States: Institutional Evolution to Address Social Change

Scott Alan Carson
University of Texas-Permian Basin


Nineteenth century US prisons illustrate evolutionary and institutional processes related to economic change. This study considers the interaction between crime, economics, and social change in late 19th and early 20th century United States. Throughout its early economic development, the most common crime in the US was theft, indicating the state prisons were initially erected prisons to protect personal property rights. During this period of considerable economic and urban change, there was surprisingly little difference between urban and rural crimes, and contrary to perception, there was little variation by crime, incarceration, and ethnic status, indicating law enforcement in the US was not systematically used for ethnic social control but reflects important evolutionary and institutional processes during economic development.

Integrating Applied Field Work into the Undergraduate Economics Curriculum

Thomas Kemp
University of Wisconsin-Eau Claire


A modern take on J.R. Commons’ ‘Look and See’ approach to economic analysis, this study documents an undergraduate research methods course incorporating applied field work from preliminary development through outcomes assessment. Conducted in coordination between the UW-Eau Claire Department of Economics and local elected officials in Buffalo County, WI undergraduate students were assigned the task of developing and initiating the implementation of a county-wide economic redevelopment strategy during the Spring term 2018. Course specific learning goals included: Hard skills development (software usage, data acquisition and analysis, benchmarking, and survey design) and soft skills development (presentation of sensitive economic information to lay audiences, teamwork, and survey administration). Preliminary results suggest that field based coursework improves student learning, student interest in economics, improve local economic performance, and may help to bridge the ‘Town versus Gown’ divide.
Tae-Hee Jo
State University of New York-Buffalo State
JEL Classifications
  • B5 - Current Heterodox Approaches
  • A1 - General Economics