Economics: Unfit for Purpose

Abstract

This paper is a shortened and revised version of the Closing Plenary given to the World Congress of the Association of Social Economics, and Cairncross Lecture, University of Glasgow, June 2012. Mainstream economics is seen as unfit for purpose because of deficiencies that have long been criticised by a marginalised heterodoxy. These include the taking out of the historical and social even if bringing them back in on the basis of a technical apparatus and architecture that is sorely inappropriate. These observations are illustrated in passing reference to social capital but are particularly appropriate for understanding the weakness of ethics within mainstream economics. An alternative is offered through taking various “entanglements” (such as facts and values) as critical point of departure, leading to the suggestion that ethical systems are subject to the 10 Cs—Constructed, Construed, Conforming, Commodified, Contextual, Contradictory, Closed, Contested, Collective and Chaotic.

Keywords:

• purpose of economics
• economics and ethics
• social capital
• economics imperialism

Acknowledgements

The author would like to thank the editors and referees for their comments.

Notes

^* Revised and much abbreviated version of Closing Plenary given to the World Congress of the Association of Social Economics, and Cairncross Lecture, University of Glasgow, June 2012. An expanded version is available at http://www.soas.ac.uk/economics/research/workingpapers/

¹ The American Economic Association (AEA) has formed an ad hoc committee on Ethical Standards for Economists, chaired by Bob Solow.

² For Greenspan, “those of us who have looked to the self-interest of lending institutions to protect shareholders' equity, myself included, are in a state of shocked disbelief”, New York Times, 23 October 2008. Or, as he puts it to the US Congress, “The whole intellectual edifice collapsed in the summer of last year”, http://house.resource.org/110/org.c-span.281958-1.pdf

³ See Fine (2012) for the most recent account, in which the above-mentioned 10 Cs were expanded from original 8. For the application of the latter to identity, see Fine (2009a, 2009b).

⁴ It is, of course, a sad truth that most heterodoxy is read by those who have less need of it and ignored by those who have most need of it.

⁵ But see Fine (1997) for the entitlement approach as embodying unresolved tensions between micro- and macro-analysis that have been reproduced throughout the famine literature.

⁶ See also Martins (2011) for the notion that Sen incorporates a surplus approach derived from the Cambridge and classical traditions. This, however, begs the questions of the multiplicities of Cambridge, surplus and classical political economy traditions, let alone the other unavoidable influences on or adopted by Sen himself that are not derived from these traditions whether by virtue of his personal trajectory (from India, for example) or his gargantuan scholarship across economics, philosophy and more.

⁷ Thereby, uncritically accepting himself the priority of the dualism between production and consumption despite otherwise appealing to surplus theory.