Walras' Unfortunate Legacy

What I argue in this paper is that the direction economics ,and particularly theoretical economics, took in the 20th century was to a great extent due to Walras' influence. This was not so much the result of his own results but rather a reflection of his vision. He was convinced that economics should have “sound mathematical foundations” and his concern for this is reflected in his correspondence with his contemporaries such as Poincaré. However, his specific vision of the nature of equilibrium became the benchmark for modern economic theory and led us to the Arrow-Debreu model which is characterised by its lack of institutional features, and the lack of any proof of stability under adjustment, as later to be shown by Sonnenschein, Mantel and Debreu. Above all there is no place in this framework for out of equilibrium dynamics. Whilst Walras is to be lauded for his insistence on the interdepence of markets, we should also be aware that he set us on a path towards economic models which, while admirably internally consistent, seem to be unable to match the empirical evidence. I fear that Walras would not have been unhappy with this outcome.Walras; mathematical foundations; equilibrium; Arrow-Debreu model; interdependence of markets

Adaptive Regulation in the Amoral Bazaar

Twelfth Oliver Schreiner Memorial Lecture,delivered on 20 October 2010 at the School of Law, University of the Witwatersrand, Johannesburg, South Africa. Many gradual changes in science, law and society are crystallizing to shape a significant transformation in administrative law. The doctrinal framework within which Justice Schreiner himself attempted to modernize how law should regulate government and private economic activity seems from our vantage point to be quite antiquated. In explaining why, my examples will come from the world of financial services, but they could easily be found anywhere in the area of law and regulation. First I will outline the basic premises of prevailing doctrine and its growing shortcomings. Then I will describe developments in our understanding of the social ecologies through which law and regulation is transfused. I will consider some of the implications for the way in which we need to think about future regulation in order to be more effective in this complex world. We are moving from a framework of directive regulation to one that has to become much more adaptive. While my talk will focus on understanding markets as evolutionary social ecologies, and the consequences this has for administrative law and regulation, it is also important that these amoral bazaars be grounded on a foundation of moral aspiraton and integrity. I will therefore conclude with a reminder that we ignore at our peril the urgent responsibility of redeveloping a moral framework within which markets should operate

Money and the Monetization of Credit

The relationship between money and credit is discussed in terms of network linkage. Fiat money is the only instrument with the universal recognition of its issuer. Near monies such as bank money and money substitutes such as gasoline credit cards can be classified in terms of their network links. This leads to a way of considering the velocity of money.Credit, fiat money, networks, trust, velocity

Reclaiming Virtue Ethics for Economics

Virtue ethics is an important strand of moral philosophy which normative economists have largely neglected. It underpins influential critiques of the market (as a domain in which instrumental motivation corrodes virtue) and of economics (as justifying such motivation). We explain and respond to this critique. Using the methods of virtue ethics and with reference to the writings of major economists, we propose an understanding of the ‘telos’ (purpose) of markets as cooperation for mutual benefit, and identify traits that thereby count as virtues for market participants. We conclude that the market need not be seen as a virtue-free zone

Ordering Things: The Irish State Administration Database

New theoretical approaches to the state have posed challenges for the comparative analysis of the organizational features of states. The analysis of state bodies and state agencies has largely been confined to the sub-discipline of public administration, and has been resistant to the systematic classification that has made progress possible in other areas of comparative politics. This article argues that there is much to be gained by reconceptualizing state bodies in a comparative context. This paper profiles the classification system underlying the construction of the Irish State Administration Database (ISAD) (Hardiman et al., 2011). This paper sets out a new approach to conceptualizing the organizational and functional features of states. ISAD not only provides a valuable research resource for work on the Irish state, but can also provide a framework for building a comparative research agenda.

Neuroeconomics: Using Neuroscience to Make Economic Predictions

Neuroeconomics seeks to ground economic theory in detailed neural mechanisms which are expressed mathematically and make behavioural predictions. One finding is that simple kinds of economising for life-and-death decisions (food, sex and danger) do occur in the brain as rational theories assume. Another set of findings appears to support the neural basis of constructs posited in behavioural economics, such as a preference for immediacy and nonlinear weighting of small and large probabilities. A third direction shows how understanding neural circuitry permits predictions and causal experiments which show state-dependence of revealed preference – except that states are biological and neural variables