Social Economics and Evolutionary Institutionalism Today

Abstract

This paper discusses theoretical and methodological elements that constitute social economics. It also considers those elements for evolutionary (Veblenian) institutional economics. It investigates how these “heterodoxies” may further converge. Such convergence would probably not trigger a complete unification, but lead to a broadly defined common research program and a strategy for joint “heterodox” survival, in face of the ranking game of the neoclassical “mainstream” and of the dominant powers supporting it as the discipline providing ideological legitimization. A common denominator of “heterodoxies” in terms of real-world orientation, direct interdependency and interaction of agents (social decision situations), appropriate complexity, and the treatment of values is drafted. Theoretical concepts discussed include complex and open systems, individual agency, institutions, embeddedness, networks, social reform, and process orientation. Formal methodological developments considered are complex modeling, game theory, or computer simulations. We arrive at a more formal common basis, which we term socio-economics. We also consider the relations of evolution and institutions, the institutional dichotomy, and the theory of institutional change. The monism of the “market” of the “mainstream” turns out to dissolve into the institutional diversity of real-world network forms, which helps explaining real-world forms of markets, hierarchies, or spatial clusters. Focuses of “heterodox” convergence will have to be the related “microfoundations” and “macrofoundations” projects, integrating an interdisciplinary “naturalistic” approach to genetic-cultural co-evolution of cooperation, and social reform. While modern socio-economics makes “heterodoxies” leading in economic research, their future still appears open between ideological cleansing and extinction through the mainstream, and proactive paradigmatic pluralism.

Keywords::

• social economics
• evolutionary (Veblenian) institutional economics
• “heterodoxy”
• rankings
• neoclassical “mainstream”
• paradigmatic convergence
• direct interdependency
• complexity
• values
• embeddedness
• open systems
• agency
• formal modeling
• game theory
• socio-economics
• institutions
• networks
• institutional dichotomy
• institutional change
• microfoundations-of-macro
• macrofoundations-of-micro
• naturalistic approach
• paradigmatic pluralism

JEL classifications::

• A12
• A13
• B15
• B25
• B40
• B52
• C70
• D02
• L14

Notes

¹ One reviewer is correct in stating that the “ranking” business is not part of neoclassicism's doctrine but “looks more as the consequence of its dominance”.

² One reviewer had read this section as making the reader “a bit afraid that such broad complexity makes the task of our dismal discipline quite impossible.” So we have stated quite clearly that the contrary is the case.

³ If our subject in this paper were even broader and would include political science, sociology, geography, psychology, and anthropology, we would have to conceptualize social institutions in even more dimensions, as, e.g., in anthropology from Levy-Strauss to Mary Douglas. Institutions then might be considered even more normative, commanding, and behavior shaping than in a just problem-solving perspective (see, e.g., the classic of Mary Douglas, Douglas, 1987). I owe this remark to one of the reviewers. But also see below on institutional change in degeneration, and on a modern naturalistic perspective, including the anthropology of cooperation emergence and multi-level evolution.

⁴ I owe an endorsement, reinforcement, and qualification of this idea to one of the reviewers.

⁵ I am extremely grateful to one of the reviewers for emphasizing this point. He/she warned me that just “respecting a (…) diversity may hamper the emergence of stronger alternatives to confront the neoclassic agenda”.