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Vested Interests and Social Progress under Uncertainty

Paper Session

Saturday, Jan. 5, 2019 2:30 PM - 4:30 PM

Hilton Atlanta, Crystal F
Hosted By: Association for Evolutionary Economics
  • Chair: Tae-Hee Jo, State University of New York-Buffalo

Institution, Evolution, and Uncertainty in New Evolutionary Economics: A Critique

Tae-Hee Jo
,
State University of New York-Buffalo State

Abstract

Some institutional economists associated with AFEE are sympathetic to new evolutionary economics (represented by Richard Nelson and Sydney Winter). An (unintended) outcome of an effort to integrate new evolutionary economics into (original) institutional economics is the undermining of the core concepts of institutional economics, such as evolution, institution, vested interests, the status quo, uncertainty, and history, since these concepts are either ignored or used superficially in new evolutionary economics. In the paper I will argue that while new evolutionary economics offers some ‘new’ and interesting explanations about the evolution of the firm, in particular, and of the system in general, it is not compatible with institutional economics, especially the Veblenian approach. Rather, new evolutionary economics is a protective modification of the mainstream framework. A critical examination of new evolutionary economics would accentuate the radical implications of institutional economics with regard to vested interests and social progress.

Institutions, Markets, and the Society against the State: An Interdisciplinary Perspective on Vested Interests and of Power Asymmetries in Western Thought

Manuel Ramon Souza Luz
,
Federal University of ABC
John B. Hall
,
Portland State University

Abstract

This paper aims to align Veblen’s understanding of vested interests and invidious distinction with the anthropological and philosophical literature on the emergence of the state and the market order. The main contribution is to make clear that Veblen’s perspective is in line with a series of works in social sciences and philosophy that focus on the institutionalization of power asymmetry as the foundation of the state and markets. The ethnographical record from anthropologists, such as Marcel Mauss, Pierre Clastres, Marshall Sahlins, and David Graeber, reveals that several societies establish institutional mechanisms to avoid the emergence of power asymmetries among their members, accordingly these societies forbid the establishment of the state and market relations. Social thinkers and political philosophers from different roots, such as Pyotr Kropotkin, C. B. MacPherson, and Karl Polanyi, have a complementary perspective, pointing that the market is an institutional structure created and enforced by the state that establishes a specific type of power asymmetry. From the Veblenian perspective, the emergence of the state and markets as regulators of social order depends on the degree by which asymmetries are accepted and legitimized among the members of a social group through institutions. The role of vested interests and invidious distinction is central in this perspective since these concepts establish the theoretical bridge between institutions and power. Moreover, from the institutionalist standpoint our connection justifies an interdisciplinary reference to understand the main institutions that support power asymmetries and ceremonial values in the contemporary world.

Remittances and Households in the Age of Neoliberal Uncertainty

Kalpana Khanal
,
Nichols College
Zdravka Todorova
,
Wright State University

Abstract

Remittances from migrant workers and immigrants have been growing, in some cases becoming the main financial inflows for countries. Remittances have been promoted by states and experts as a source for financing development and as a macroeconomic strategy for poverty reduction. The paper connects the growth of remittances to uncertainty under neoliberalism. Using micro and macro literature on remittances and transnational migration we observe that, on one hand, the growth of remittances and transnational migrant work is related to uncertainty regarding livelihood security. On the other hand, the related changes in household structures facilitate remittance flows, sustain markets, and stabilize macroeconomic uncertainty. Meanwhile, transnational households experience uncertainties brought by fragmented household relations. The paper concludes with theoretical implications of those observations.

Bringing the State Back Out: How Vested Interests, Moralism, and Conservative Economic Discourse Helped Undermine Brazil’s Democratic Government

Ramon Garcia Fernandez
,
Federal University of ABC
Manuel Ramon Souza Luz
,
Federal University of ABC
Roberto Resende Simiqueli
,
American School of Campinas (ESAMC)

Abstract

From 2013 to 2018, the Brazilian political and economic landscape has been engulfed in incessant turmoil. Following what started as a series of popular demonstrations on bus fare increases in major capitals, the country’s middle class took to the streets to voice their discontent with the stream of PT administrations started in 2002. After impeaching democratically elected President Rousseff and judging former president Luiz Inacio Lula da Silva, partisans of this local strain of neoconservative ideology still adhere to the general tenet that Brazil’s 21st century policy shifts were the result of the prevalence of vested interests within the federal administration. Our aim with this paper is twofold. Firstly, we aim at reconstructing a historical narrative of the current debacle of Brazilian democracy and the decisive influence of right-wing populism and its radicalization of vague and irresponsible political discourse centered on supposed vested interests. Secondly, we reflect upon how the ideas presented in Vested Interests and the Common Man provide an interesting standpoint for not only reassessing the claims of Brazil’s middle class and its most vocal apologists, but also the links between morally grounded political movements and their subservience, on several instances, to the motivations of economically established vested interests.

The “Double Movement” and the Maintenance of Capitalist Society

John Henry
,
Levy Economics Institute

Abstract

In The Great Transformation, Karl Polanyi advanced the concept of the “double movement” in addressing an issue in the longue durée of capitalism. Periods of political and economic movement in which the main direction is that of “freeing” markets and moving toward a laissez faire economy are followed by “progressive” developments designed to protect the people’s interests (and that of society) from the market. While Polanyi’s argument has been subjected to criticism, criticism is not the purpose of this presentation. Rather, I ask the question: “whose interests”? I propose that Polanyi gave short shrift to a fundamental problem bedeviling capitalism since its origin (or least since the French Revolution): how to contain the demands of those experiencing poverty generated by a capitalist order, demands centered on “the right of subsistence,” to ends that are consistent with the claims of liberalism, the reigning capitalist ideology, and are confined within the limits of that capitalist order. It will be argued that the progressive reforms observed during the “anti-market” phase of the double movement are, in reality, designed to protest the interests of the main benefactors of capitalism, the large property owners labeled by Veblen, “absentee owners.” Further, the issue addressed by Polanyi has a long pedigree, beginning with Thomas Hobbes and John Locke and extending through John Maynard Keynes. No authority has solved this fundamental problem.
JEL Classifications
  • B5 - Current Heterodox Approaches
  • B2 - History of Economic Thought since 1925