Theoretical Perspectives in Institutional Economics
Saturday, Jan. 5, 2019 10:15 AM - 12:15 PM
- Chair: Zdravka Todorova, Wright State University
Consecrating Capitalism: Neoliberalism and the Prosperity Gospel
AbstractNeoliberalism relies on optimism. Without faith in meritocracy – unwavering belief that rewards will eventually and justly come to those who work hard enough – support for the capitalist system and belief in neoliberalism would unravel. How that optimism is perpetuated in the face persistent income inequality and exploitation within the workplace requires an examination of those cultural institutions which reinforce and reproduce optimism over practical experience. This research focuses on one particular religious institution of the US – the Prosperity Gospel – and its interactive co-evolution with neoliberalism.
The Prosperity Gospel is a modern, neoliberal variation of Pentecostalism that is premised on the belief that a Biblical covenant between the individual believer and God guarantees the individual believer blessings of health and wealth, provided the believer demonstrates adequate faith. Accordingly, for those who are less adept at navigating the business world, financial success is still available for those believers who can dedicate themselves with the same frenzied ambition to the spiritual world. The Prosperity Gospel thus supports and sustains neoliberalism; the Prosperity Gospel is an institution which provides refuge to individuals from the exigencies of the market as well as a social practice which reinforces individual responsibility and fault. The Prosperity Gospel is the spiritual articulation of neoliberalism as well as a reinforcing institution.
Vision, Value and Pluralism: A Contribution to Analytical Political Economy
AbstractThe choice of value theory reflects one’s vision of how markets function within a capitalist market economy. This choice is crucial for understanding the role that pluralism will play in prompting a paradigm shift within the discipline of economics. This paper focuses particularly on the limitations of alternative value and price theories employed by heterodox economists. Although heterodox economists are more apt to hold the vision that a capitalist market economy is inherently unstable, key aspects of their price theories inadvertently support a vision of inherent stability. The paper examines three theories of value and distribution within the surplus approach: Kaleckian, Sraffian and Marxian. By retaining elements of mainstream economics, they may be held back from fully identifying the sources of instability. The implications are then drawn for the emerging strand of political economy known as analytical political economy. Rather than rely on the application of mathematics as a key defining feature of analytical political economy the reliance on a clear vision of how markets function, as expressed through a theory of value, is more conducive to both systematizing the approach and for conducting pluralist analysis.
Dissimilarities and Similarities Between New Institutional and Original Institutional Economics
AbstractNew and original institutional economists have varying positions within Rutherford’s five dichotomies. Some scholars are closer to the other school than others. Both approaches seem to be moving to each other regarding some issues. However, notwithstanding that some new institutional economics mention some core issues of original institutional economists, they still pay mainly lip-service to their criticisms. One group of new institutional economists transformed the dynamic approach of going concerns in a static analysis of governance structures. Another group of new institutional economists substitute sequential processes caused by exogenous influences for cumulative causation of unfolding activities and going concerns. And others apply a game theoretic approach. All tend to focus on an institutionalized homo oeconomicus who is subject to bounded rationality and rationally seeks self-interest with guile. Institutions help agents, including predatory dictators, to become better homo oeconomici. Additionally, critical junctures are assumed to give rise to path-dependent processes, and institutions develop in reaction on price changes due to exogenous variables like population growth, technology or stochastic shocks. Both, original and new institutional economists are diverse groups. New institutional economists tend to focus on enforcing efficiency, have trust in the price mechanism to allocate resources, and apply abstract models for analyzing. Original institutional economists tend to focus on evolutionary processes without assuming definitive normality, and support governmental intervention and institutional reform to establish justice/less income inequality. In spite of having much ground in common, both schools are still far from being each other’s equivalent, especially regarding methodology and normative goals.
Rethinking Market Economy in the Age of Uncertainty: Convergence Theory Revisited
AbstractThis paper proposes to reread convergence hypothesis as a blueprint for a new industrial society, which I call democratic state capitalism. Idea of convergence originated in Western economic literature of the 1960s and was extensively debated in the Soviet Union in the late 1980s. Soviet reform-scholars questioned overcentralized state socialism and its dictatorial planning and called for market socialism and pluralistic polity; Western thinkers similarly questioned competitive market by acknowledging that, because of technological requirements, the essential feature of modern economies is the dominance of large corporations. Progressive Western scholars admitted that corporations already respond to competitive uncertainties with comprehensive planning, but argued also for reputable independent government regulation of corporate management such that the public good can be served, social justice created, and economic democracy enhanced.
Both groups of convergence scholars sought to steer their respective socio-economic systems toward more democratic, humane and civilized ends. Their most important idea is that a new economic order should be a state-guided mixed economy based on 1) transparent and impartial national regulation of a corporate system, 2) extended state and cooperative ownership, 3) strengthened economic power of the public vital for popular checks on bureaucratized management and polity; 4) a secure flow of income to all participants in the economy, 5) wide-ranging welfare programs, and 6) disarmament and peaceful co-existence. These convergence ideas were abandoned in favour of neoliberalism and the arms race. Now is an appropriate time in our age of uncertainty to give them a new hearing and due acknowledgement.
- B5 - Current Heterodox Approaches
- B0 - General