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ABSTRACT
We argue that in a core–periphery economic world economics imperialism as advanced by the postwar Chicago School and economic imperialism led by the economies of the north are two sides of the same coin. We first review the parallelism between postwar capitalism’s core–periphery expansion of the north into the south and the Chicago theory of economics imperialism. We then distinguish four forms of relationships between different disciplines, and using Rodrik’s augmented global capitalism trilemma argue Chicago adopts his Golden Straitjacket pathway, both for north–south capitalist expansion and core mainstream economics’ orientation toward other social science disciplines. The paper then uses Ricardo’s classic theory of rising rents to argue the Golden Straitjacket pathway is self-undermining for both, because it produces costly rising inframarginal rents in the north economies associated with financialization and in Chicago economics associated with its defense against other disciplines’ reverse imperialisms. We conclude that long-term forces operating on global economic development and the evolution of the social sciences suggest an alternative pathway for both that would produce a more pluralistic world economy and a more pluralistic economics.
Acknowledgements
We would like to use this opportunity to acknowledge and thank the reviewers who reviewed this article and aided in its publication.
Disclosure Statement
No potential conflict of interest was reported by the author(s).
Notes
1 We include Portugal as an example, instead of relying upon the more conventional and therefore obvious illustration provided by Latin American countries only, for two reasons: to show that Europe, especially in the economic periphery, is not immune to economic imperialism — often thought to only apply to the developing world — and because economic imperialism in the developing world has created models for its wider application.
2 After criticizing other traditional definitions of economics emphasizing the market process, Becker argued that what distinguishes economics is ‘not its subject matter but its approach,’ which he identified with utility maximizing behavior, market equilibrium, and stable preferences. He asserted the ‘economic approach is uniquely powerful because it can integrate a wide range of human behavior,’ and is not restricted in application to material goods or even markets (Becker Citation1976, p. 5).
3 Regarding economics’ ‘natural’ endowments, Demsetz comments: ‘Economics may be judged the more successful social science because it has explained phenomena within its traditional boundaries better than the other social sciences have explained phenomena within their respective traditional boundaries. The primacy of economics may be established in this sense even if economics never influenced the other social sciences’ (Citation1997, p. 2).
4 Here we follow Ambrosino, Cedrini, and Davis (Citation2021) and recommend the fuller treatment of disciplinary relationships it provides.
5 The trilemma derives from the small open economies Mundell-Fleming model; see Obstfeld and Taylor Citation1998.
6 Mass politics essentially means democracy: that is, policy space, for nation states, or cross-national political democracy, when political power is transferred to international institutions (such as the United Nations, or the European Union).
7 In the third edition of the Principles he also speculated that the introduction of machinery in production might replace labor and reduce its higher cost associated with the higher price of agricultural produce.
8 As a principle of corporate governance, shareholder value maximization is very much a Chicago product that was famously advanced and defended by Milton Friedman in what came to be known as the ‘Friedman Doctrine’ regarding the ‘social’ responsibility of business (Friedman Citation1970). Friedman also argued that firms’ attention to anything other than profits, such as community and stakeholder interests, led to totalitarianism (Friedman Citation1962).
9 This was a problem that according Keynes that affected the world leading capital exporter, Britain, in the early 1920s.
10 The influence and challenge produced by Daniel Kahneman and Amos Tversky’s heuristics and biases program is well known, but symbolically important is that recent Nobel Prize winner Richard Thaler long had a presence at the University of Chicago in the Business School, a research presence rival to the Chicago Department of Economics.
11 See in particular the Symposium ‘Has it been fifty years already? The demise of Bretton Woods’, hosted by the Review of Political Economy in 2021 (vol. 33, n. 4), with articles by Matias Vernengo and Barry Eichengreen.