A Trojan Horse for Sociology? : Preferences versus Evolution and Morality

This document is the Accepted Manuscript version of the following article: Geoffrey M. Hodgson, ‘A Trojan Horse for Sociology? Preferences versus Evolution and Morality’, Review of Behavioral Economics, Vol. 2 (1-2): 93-112. The Version of Record is available online at DOI: http://dx.doi.org/10.1561/105.00000021. © 2015 G. M. Hodgson. Published by Now Publishers Inc.Herbert Gintis and Dirk Helbing have developed a highly impressive, over-arching theoretical framework, using rational choice theory, general equilibrium theory, and game theory. They extend this to cover “moral, social and other-regarding values,” plus social norms, culture, and institutions. While accepting the value of their contribution, I argue that there is a tension within their work between their depiction of the rational choice framework as a general “expression” of behavior and searching for explanations of, and detailed motivations for, particular phenomena such as punishment, altruism or moral sentiments. There is also a danger of over-generalization where a framework is stretched to cover every possible behavior. Indeed, rational choice theory with “other-regarding” preferences is strictly unfalsifiable. Furthermore, because “other regarding” agents are also depicted as maximizing their own utility, this framework cannot encompass adequate notions of altruism or morality. Instead we should follow Darwin in seeking to explain the evolution of morality as a distinctly human motivation. The article concludes with a discussion of the implications of the Gintis-Helbing arguments for the future of sociology as a separate discipline.Peer reviewedFinal Accepted Versio

The Future of Work in the Twenty-First Century

This is an accepted manuscript of an article published by Taylor and Francis in Journal of Economic Issues, on 2 March 2016, available online at: http://www.tandfonline.com/doi/full/10.1080/00213624.2016.1148469The institutional nature of work has changed dramatically in over the last 300 years and there is no reason to assume that change will cease in the twenty-first century. This article criticizes the theoretical basis for some previous confident predictions, including de-skilling (Marx), and massive reductions in the extent of the working day (Keynes). It is argued here that further increases in the complexity and knowledge-intensity of work under capitalism are likely, although not inevitable. Some implications of growing complexity, for work and the employment contract, are considered. Raising the question of possible asymmetries between labor and capital, their role in generating future increases in inequality is addressed. On the other hand, growing complexity may lead to radical changes in the employment contract and its evolution into a form of quasi-self-employment. But in an increasingly knowledge-intensive system, those with inadequate training or skills may be left behind. Compensatory policy measures such as a guaranteed basic income and wealth redistribution remain on the agenda.Peer reviewe

Conceptualizing Capitalism – A Summary

This document is the accepted manuscript version of the following article: Geoffrey M. Hodgson, 'Conceptualizing capitalism: A summary', Competition & Change, Vol. 20 (1): 37-52, February 2016. The final, definitive version is available online at: https://doi.org/10.1177/1024529415611264. Published by SAGE Publishing.This essay summarizes key parts of the book Conceptualizing Capitalism (Hodgson 2015a). It briefly explains why institutions must be central to a definition of capitalism, and what is the nature and role of such a definition. It dates the rise of capitalism in England to the development of financial institutions in the eighteenth century, particularly concerning the institutional conditions for the use of property as collateral and the buying and selling of debt. It considers why economists and others have often downplayed the role of particular financial institutions. This provides a lead to the question of inequalities of wealth and income, and how they are generated within capitalism. In addition, while capitalism is a market system it inevitably has missing markets, leaving open a crucial role for the state.Peer reviewedFinal Accepted Versio

Karl Polanyi on Economy and Society: : A Critical Analysis of Core Concepts

This is an Accepted Manuscript of an article published by Taylor & Francis in Review of Social Economy on 2 January 2017, available online: http://www.tandfonline.com/doi/full/10.1080/00346764.2016.1171385.This journal highlights the social aspects of economic activity. Yet the nature of the ‘social’ and the ‘economic’ are more problematic than often assumed. This article probes Karl Polanyi’s depiction of the relationship between the ‘social’ and the ‘economic’ and the notion of ‘embeddedness.’ In his Great Transformation (1944) Polanyi associated the ‘economic’ with motives of material gain, while ‘social’ referred to norms of reciprocity and redistribution: his distinction underlined different kinds of motivation. But in a 1957 essay he addressed different kinds of institutions that engender different motives. Polanyi (1944) argued that after 1800 Britain was transformed into a market-oriented ‘economic’ system, based on greed and material gain. He also believed that an effective market system would be ‘self-adjusting’ and free of political interference, despite his important additional claim that the state was involved in its creation. Some of Polanyi’s core concepts and arguments are contradictory and problematic, and need to be reconsidered.Peer reviewedFinal Accepted Versio

Some Limitations of the Socialist Calculation Debate

This document is the Accepted Manuscript version of the following article: Geoffrey M. Hodgson, ‘ Some limitations of the Socialist Calculation Debate’, Schmollers Jahrbuch, Vol. 136 (1): 33-57, March 2016. The Version of Record is available online at DOI: https://doi.org/10.3790/schm.136.1.33. Published by Duncker & Humblot.One of the most important debates in the history of economics is known as the ‘socialist calculation debate’. It was initiated in 1920 by the Austrian school economist Ludwig von Mises and continued by Friedrich Hayek, who forcibly criticised the schemes for socialist planning developed by Oskar Lange, Henry Dickenson and others. But the earlier critique of socialism by the German historical school economist Albert Schäffle has been largely overlooked. Furthermore, the rightful emphasis on the role of information and knowledge in the Austrian case, ironically suggests some limits on property and markets, as well as endorsing their continuing importance. This essay points to the neglect of the detailed character of institutions on both sides of the debate. Not only were adequate notions of property and exchange absent from the general equilibrium theory used by the socialists in their attempted justifications of planning, but they were also threadbare on the Austrian side. Hence, ironically, the Austrian defence of capitalism was inadequate.Peer reviewe

Much of the “Economics of Property Rights” Devalues Property and Legal Rights

This article has been published in a revised form in Journal of Institutional Economics, https://doi.org/10.1017/S1744137414000630. This version is free to view and download for private research and study only. Not for re-distribution, re-sale or use in derivative works. © Millennium Economics Ltd 2015Legal theorists and other commentators have long established a distinction between property and possession. According to this usage adopted here, possession refers to control of a resource, but property involves legally sanctioned rights. Strikingly, prominent foundational accounts of the ‘economics of property rights’ concentrate on possession, downplaying the issue of legitimate legal rights (Von Mises [1932] 1981, Alchian 1965, 1977, Barzel 1994, 1997, 2002). Some authors in this genre make a distinction between ‘economic rights’ and ‘legal rights’ where the former are more to do with possession or the capacity to control. They argue that ‘economic rights’ are primary and more relevant for understanding behaviour. But it is argued here that legal factors – involving recognition of authority and perceived justice or morality – have also to be brought into the picture to understand human motivation in modern societies, even in the economic sphere. As other authors including Hernando De Soto (2000) have pointed out, the neglect of the legal infrastructure that buttresses property has deleterious implications, including a failure to understand the role of property in supporting collateralized loans for innovation and economic development.Peer reviewedFinal Accepted Versio

Globalisation won’t do away with variations in capitalism

Different capitalisms aren't gravitating towards one only type: permanent divergence is possible, writes Geoffrey M. Hodgso

How Veblenian Evolutionary Thinking Transcends Methodological Individualism and Methodological Collectivism

The Veblenian evolutionary approach adopts some key philosophical and other principles from Darwinism. Among these is an insistence that every event has a cause. Hence, in particular, human intentionality is caused. This does not mean the neglect of human intentionality but the acceptance that it is caused, even if explanations of such causes are elusive. This essay explores the application of these and other Darwinian principles to economics by Veblen, more than a hundred years ago. It shows that these principles are incompatible with both methodological individualism and methodological collectivism, as conventionally defined.L’approche évolutionniste veblennienne adopte certains des principes clés - philosophiques et autres - du darwinisme. Parmi ceux-ci on trouve l’insistance sur le fait que chaque événement a une cause. L’intentionnalité humaine, notamment, est actionnée par une cause. Ceci ne signifie pas un manque d’attention envers l’intentionnalité humaine, mais l’acceptation de ce qu’elle résulte d’une cause, même si les explications de telles causes demeurent vagues. Cet essai explore l’application à l’économie de ces principes, ainsi que d’autres principes darwiniens, par Veblen, il y a plus de cent ans, et montre que ces principes sont incompatibles à la fois avec l’individualisme méthodologique et avec le collectivisme méthodologique tels qu’ils sont conventionnellement définis

Prospects for institutional research

Prospects for institutional researc

Instituciones, recesiones y recuperación en las economías en transición

This article analyses the 1989-2005 economic growth in the transitional economies in Europe and Central Asia, and signals factors that help to explain the differences in outcome. An econometric analysis finds prominent indices of property rights, corruption, economic freedom, tax incidence and civil liberties as statistically insignificant in this regard. Statistically significant variables include the degree of ethnic fractionalization and an index of democracy, both of which were negatively correlated with GDP growth. Overall, the analysis here shows the need for effective national institutions that can enforce legal and general rules of the economic game, reap positive benefits for democracy, and overcome the negative economic legacy of ethnic divisions.institutions, recessions, transitional economies, ethnic fractionalization, index of democracy