On Marx's theory of agricultural rent: A reply to Ben Fine

This article criticizes both the 'Marxist' and 'sociological' conceptualizations of money to be found in the recent debate between Fine, Lapavitsas and Zelizer in Economy and Society . They neglect important contributions to the theory of money, especially the 'credit' and 'state' theories of money in the social sciences. These emphasize, as did Keynes, the central theoretical importance of money of account . These approaches were banished from orthodox economics and lost to sociology in the post- Methodenstreit division of intellectual labour in the social sciences. Marxist economics has never properly addressed this monetary analysis. Although neglected, it is not obscure and informs the more widely known post-Keynesian theory of money. This article argues that these heterodox theories of money are essentially sociological in that they involve the conceptualization of money as abstract value constituted by the social relation of the 'promise to pay'.     

Neoinstitutionalism: Still no intellectual hegemony?

Despite its greater realism, neoinstitutionalism has not been able to rival neoliberal approaches in the minds of many public‐policy communities. This article suggests four reasons why this is the case: the way that neoliberalism appears to be rooted in the strong paradigms of neoclassical economics, the related simple appeal of marketization as a solution to policy problems, the dominance of short‐term calculation in financial markets as the apparently most successful form of economic activity, and the role of corporate actors as public‐policy insiders. It is argued that an essential solution to the problem is a rapprochement between neoinstitutionalism and neoclassical economics, which is itself not necessarily wedded to neoliberalism.     

Further reflections on the ontology of money: responses to Lapavitsas and Dodd

Abstract

The debate on the nature of money, its origins and conditions of existence has been recently taken further in separate articles in Economy and Society by Lapavitsas and Dodd. Both criticize Ingham's elaboration of Keynes's contention that the money of account is the primary concept in a theory of money. Lapavitisas reiterates and extends his Marxist analysis of money's origins as a universal equivalent in commodity exchange. This fails to explain the existence of a money of account, without which genuinely market exchange cannot take place. Dodd's claim to furnish a much-needed analytical refinement in the analysis of money, used to criticize Ingham's position, is shown to be based on a re-statement of an established and widely accepted distinction in monetary theory.     

Critical theory and the capitalist state

This article is an overview of Michel Callon's contribution to the reformulation of economic sociology and anthropology. It contextualizes Callon's concepts within science and technology studies, and indicates the main lines of influence on his thinking about economic processes. Callon's work also opens up a number of debates and challenges to current perspectives within economic sociology. Finally, the article considers the way in which Callon's perspective reconfigures both the relation of politics and economics, and the nature of politics itself.     

Financial derivatives and the theory of money

Abstract

Financial derivatives are used and counted as money, but it is unclear exactly what sort of money they are. This article explores the monetary role of financial derivatives in securing the global financial system. It finds that derivatives commensurate the values of different forms of financial assets, and, in the process, they facilitate continuity across different forms of money. In this role they are a form of commodity money, but very different from conventional understandings of commodity money. In developing this idea, the paper engages recent debates in Economy and Society about the nature of money. In particular, it takes issue with Ingham's state theory of money, which cannot adequately engage exchange rate volatility and extra-national roles of money, and Lapavitsas’ approach to a Marxist theory of money, which relegates commodity money to a historical abstraction.     

Can markets be expected to prevent themselves from self‐destruction?

Even if competitive markets have shown themselves to be the most efficient organizational form for creating economic efficiency, the question of how they can avoid destructive influence from agents with opportunistic motives remains unresolved. Different institutional approaches have argued that to be efficient, markets need to be embedded in a set of formal and informal institutions. Because such institutions will in the long run make all market agents better off, they are labeled efficient institutions. Contrary to what is argued in neoclassical economics, it is unlikely that such institutions will be created endogenously by market agents because the institutions are to be understood as genuine public goods. Moreover, if such institutions have been established, we should expect market agents to face a collective action problem when sustaining them, leading to the destruction of the institutions. The conclusion is that if left to themselves, markets should be understood as inherently self‐destructive.     

Remaking New Zealand's Economic Policy: Institutional Elites as Radical Innovators 1984–1993

During the mid-1980s and early 1990s the New Zealand economy moved from being one of the most regulated outside the former communist bloc to among the most liberal in the OECD. Largely unheralded and begun by an ostensibly social democratic Labour government, changes included the floating of the exchange rate; extensive liberalization of financial, capital and other markets; lowering of trade protection; fiscal restraint and monetary disinflation; changes to the machinery of government; corporatization and then sale of state assets; and changes to industrial relations frameworks (Castles, Gerritsen and Vowles 1996). Known as Rogernomics after Minister of Finance Roger Douglas, these economic policies were heavily derivative of neoclassical economic theories, such as the New Classical and Chicago schools, public choice and new institutional economics (Boston et al. 1996, ch. 2; Goldfinch 1997). This article explains how such radical economic restructuring occurred through the influence of a select group of strategically located institutional elites.     

Common cents: situating money in time and place

This article addresses the issue of how the market and the non-market are to be understood especially by concentrating on the theory of money. For mainstream economics, the market is simply an institution facilitating exchange, money being the key instrument for alleviating the inefficiencies of barter. In contrast, recent work in other social sciences, such as that by Zelizer, distinguishes among markets, and various roles of money, depending on cultural and social content. While being sympathetic to such an approach, we claim that the commodity is a better analytical starting point than the market. Based on Marx's work, we then show what commodities have in common and establish a common essence for money as generalized purchasing power. This is a peculiarly bland essence that allows money to undertake the variety of social roles identified by Zelizer.     

Track 1/Track 2 symbiosis in Asia-Pacific regionalism

Abstract

This paper addresses the question of how Track 2 international policy networks contribute to economic security. If we accept a neoclassical economic interpretation that economic security is best achieved by trade and capital liberalization, then Track 2, or non-formal research and policy networks, are able to help enhance economic security by providing Track 1 or the formal, inter-governmental organizations with novel ideas and approaches on how best to advance regional economic liberalization. As well as providing institutional memories for regional cooperation, Track 2 networks also serve as test-beds for new ideas in emerging issue areas. This was clear in the aftermath of the Asian financial crisis when a number of Track 2 networks grappled with the inter-linkages between economics and security as well as provided expertise on how states can best cope with globalised financial markets and the free flow of capital. By discussing each of the Track 2 networks and how they respectively interact with Track 1 processes, the paper provides a detailed account of the regional governance architecture in the Asia-Pacific region more broadly, and its contribution to economic security.     

Callonistics: a disentanglement

A critical response is offered to the special issue of Economy and Society devoted to Michel Callon's economics. The continuing weaknesses of his approach, as adopted and adapted from actor-network theory and the study of science and technology, are highlighted, together with the weaknesses of the economics itself. In addition, the latter is shown to conform heavily with recent developments within and around mainstream economics. The conclusion that capitalism does not exist, and so does not need a political economy, is argued both to disarm social theory in face of the current, virulent assault from economics imperialism and to waste the opportunity to offer an alternative economics of its own.     

POLICY IMPLICATIONS OF SOCIO-ECONOMICS*

Avariety of efforts are currently underway to develop alternatives to the neoclassical paradigm and neoclassical analysis of economic behavior. Here, the author seeks not to argue which approach is most productive, but to demonstrate the useful policy implications of adding key noneconomic (so- cial, psychological and political) variables to a paradigm that attempts to model economic behavior. This co-deterministic paradigm is called socio- economics. The article discusses the different and often insightful policy analysis that results from employing a socio-economic set of variables in four major areas: (1) allowing for shifting preferences; (2) including institu- tional contexts and influences within which individual transactions take place; (3) recognizing the effects of political as well as economic power differences; and (4) combining macro and structural policies.     

Schumpeter's economic theory and the dynamic accounting view of the firm: neglected pages from the Theory of Economic Development

Abstract

The first English translation of some of Schumpeter's (1926) pages of the Theory of Economic Development is presented. These neglected pages are remarkable because they significantly add to Schumpeter's masterpiece on a number of issues concerned with accounting, law and economics of the firm. They show that Schumpeter considered understanding the firm, together with innovation, as important scientific problems. Schumpeter doubts the explanatory value of proprietary entrepreneurship and provides an early justification of the dynamic entity view of business activity generated by the firm as a becoming concern. He discusses its implications for understanding issues of economic organization and corporate governance, and suggests some theoretical insights concerning business capital and money under conditions of real dynamics and complexity. The doors opened by Schumpeter indicate that money and accounting are fundamentally coupled as complementary institutions in framing and shaping the economic and monetary process of the firm as an enterprise entity.     

Brief lives: economic life and political life in the history of economic thought

This paper considers the relationship between economic life and political life as it has been articulated in four contexts in the history of economics: the ancient, the mercantilist, the classical and the neoclassical. It examines the changing ways in which these aspects of behaviour have been seen to be related, and how that relationship has taken on different forms in different epochs of economic thought. The analysis seeks to reveal some of the remaining questions that arise in the question of the relationship between economic man and political man.     

The big,bad wolf and the rational market: portfolio insurance,the 1987 crash and the performativity of economics

This article distinguishes two meanings of the performativity of economics, a thesis advanced by Michel Callon: ‘generic’ performativity, according to which markets and other economic relations are not to be taken as given, but as performed by economic practices; and ‘Austinian’ performativity, in which economics brings into being the relationships it describes. The two versions of performativity are explored by means of an examination of the history of portfolio insurance (a financial-market technique based on the economics of option pricing), of the 1987 stock market crash, and of subsequent efforts to diagnose the causes of the crash and to redesign the market to avoid future catastrophe. The article emphasizes the extent to which the financial markets of high modernity are designed entities, and argues that the question of their design is always a political question, even if it is seldom recognized as such.     

Performing the economy,performing science: from neoclassical to supply chain models in the agrifood sector

Abstract

Callon and Hilgartner, respectively, have argued that the economy and technoscience are performed and that neoclassical economics (NE) and scientific reports should be interpreted as performances. Building on that theme, it is argued here that the ongoing transformations collectively known as globalization signal a new way of thinking about and performing both economics and technoscience: supply chain management (SCM). A comparison of SCM with NE models reveals shifts in both the theoretical focus of its proponents and the reactions of critics. Recent developments in the agrifood sector are used to illustrate the argument.     

Marin: a Pascalian diversion

Discussion of industrial democracy in Britain has been notably untheoretical, especially with respect to economic theory. There is economic literature on the issue, but it is very much dominated by neoclassical theories of the firm. This essay attempts to assess the arguments of that neo-classicism. Part of this involves some discussion of the basis of the hegemony of that type of economics within theories of the firm, which requires some discussion of the history of the theory of the firm. The conclusion is that whilst neo-classicism is not to be dismissed, an adequate theorisation of the economics of industrial democracy cannot be based on neo-classical premises about the structure and conduct of firms.     

Performance Indicators in Academia: An X‐Efficiency Approach?

This article utilises three different perspectives to evaluate the uses of performance indicators in Australian higher education: federalism, neoclassical economics and X-efficiency theory. The introduction of performance indicators by the Commonwealth government is associated with providing the most efficient path for the allocation and distribution of scarce resources in higher education (neoclassical economics), increasing its control over the universities (federalism theory), and applying pressure to them and in turn their academic members to increase their effort levels (X-efficiency theory). X-efficiency theory is proposed as a possible model to support and inform efforts to better understand and improve the operation of performance indicators.     

Religious market structure and democratic performance: Clientelism

Is there a connection between government intervention in religious competition and partisan clientelism in democratic systems? Drawing on the economics of religion, we argue that alongside commonly examined population-level religious processes (religious diversity), state-level religious processes (government regulation of competition in the religious market) affect institutional performance in electoral democracies. Linking comparative indicators of religion-state relations with measures of partisan clientelism, statistical analysis suggests that uncompetitive religious markets, such as those where a dominant religion is sponsored by the state, create incentives, infrastructures and opportunities that favour clientelism. The study emphasises the importance of light-touch regulation of religion not merely as a normative principle narrowly related to religious freedom, but also as a potential remedy that can enhance the quality of political institutions.