The economics of ageing and the political economy of old age

Economic discussion of ageing has been largely neoclassical in approach. Ageing has become a specialism within population economics, which is itself a specialism within the neoclassical mainstream. An alternative view has come from authors in sociology and social policy, who have produced their own 'political economy of old age'. In contrast with neoclassical individualism, sociological depictions of ageing have stressed the social construction of old age and the structured dependency of the elderly. Non-neoclassical economists have had little to say about ageing, despite some relevant work in the early days of Keynesianism. This paper argues that a combination of structural ideas from sociology and disequilibrium ideas from Keynesian and non-neoclassical economics can provide a suitable framework for the economics of ageing

External capabilities and the limits to social policy

This chapter discusses the nature of external capabilities and how they bear upon social policy. Alternative definitions of external capabilities are compared and a simplified version suggested. It is argued that the issues surrounding external capabilities can be resolved only if the capability approach loses its individualistic slant by according higher status to social context. A layered, non-reductionist social theory would be helpful here, and a layered scheme for the capability approach is suggested. Such a scheme can show up the narrowness of traditional social policy and its muted impact on external capabilities. Despite endeavouring to fight poverty, social policy cannot guarantee the benign external conditions under which a person’s lifetime opportunities will flourish

Strategic pluralism and monism in heterodox economics

Pluralism is frequently supported by heterodox economists, but their rationale for it is not always transparent. It could be advocated for strategic reasons, as a response to the institutional power of orthodoxy, or for fundamental reasons, as a program for how economics should best be done. This paper evaluates strategic pluralism, compares it with the alternative of strategic monism, and relates both strategies to long-term objectives

Age, health and medical expenditure

Ageing populations in developed countries have placed increasing demands on health care services and drawn attention to how age is related to medical expenditure. The effect of ageing on health involves a mixture of biological and social factors that ideally requires an interdisciplinary approach if it is to be properly understood. Expenditure decisions connected to age add further complexity by raising difficult ethical problems. The current paper aims to bring out the intricacy of the age-medical expenditure relation and highlight the biological, social and ethical background that has often been overlooked in the economic literature

Factor shares, business cycles and the distributive loop

This paper looks at how factor shares vary over the business cycle and how their movements fit into Kaleckian analysis. Heterodox accounts of factor-share movements include both profit-squeeze arguments (procyclical wage share) and underconsumption arguments (counter-cyclical wage share). Empirical evidence gives no decisive support for either account: factor shares may be procyclical and counter-cyclical at different stages of the business cycle. If factor shares vary in such a complex way, then Kaleckian models cannot have a stable distributive curve. The economy instead follows a distributive loop, with different adjustment paths during an upswing and downswing

Economic flexibility : a structural analysis

Economic flexibility is much discussed in the academic literature but has no agreed definition. In neoclassical economics, a flexible economy can be secured only by removing structural rigidities that block relative price movements and hamper the operation of markets – social structures are seen as a threat to flexibility. The current chapter criticises this neoclassical view and proposes a structural approach that acknowledges the importance of social structures for adjustments in all economic arrangements, including markets. If structures take varied forms that may enhance as well as restrict human agency, then they are readily compatible with flexibility

Dependence and population ageing

Population ageing has often been summarised through rising old-age dependence ratios. Age is therefore perceived as a source of dependence, which supposedly causes economic problems. While these perceptions seem intuitive, they are open to query and may be misleading. The current chapter looks at how we define dependence, how it relates to ageing, and whether it should be regarded as bad for the economy

Population growth : a comparison of evolutionary views

Economists are divided about population growth: the pessimism of neo-Malthusians contrasts strongly with the optimism of cornucopians. Despite their differences, both schools of thought reject economic orthodoxy and prefer evolutionary forms of theory. Their interpretations of evolution are different: the neo-Malthusians appeal to the entropy law, whereas the cornucopians emphasise human creativity expressed through markets. This paper argues that both schools are right to adopt an evolutionary outlook, but that they are too restrictive in their conception of evolution. A more complete evolutionary view, which allows properly for social institutions, could give a more balanced account of population growth

Dualism, duality and the complexity of economic institutions

Dualism - the division of an object of study into separate, paired elements - is widespread in economic and social theorising: key examples are the divisions between agency and structure, the individual and society, mind and body, values and facts, and knowledge and practice. In recent years, dualism has been criticised as exaggerating conceptual divisions and promoting an oversimplified, reductive outlook. A possible alternative to dualism is the notion of duality, whereby the two elements are interdependent and no longer separate or opposed, although they remain conceptually distinct. This paper argues that duality, if handled carefully, can provide a superior framework to dualism for dealing with the complexity of economic and social institutions

Capabilities, culture and social structure

Sen's capability approach has a culturally specific side, with capabilities influenced by social structures and institutions. Although Sen acknowledges this, he expresses his theory in individualistic terms and makes little allowance for culture or social structure. The present paper draws from recent social theory to discuss how the capability approach could be developed to give an explicit treatment of cultural and structural matters. Capabilities depend not only on entitlements but on institutional roles and personal relations: these can be represented openly if capabilities are disaggregated into individual, social and structural capacities. The three layers interact, and a full analysis of capabilities should consider them all. A stratified method implies that raising entitlements will not on its own be enough to enhance capabilities and that cultural and structural changes will be needed