What’s Wrong with Contemporary Economics?

It is argued that in educating economists we should sacrifice some of the more technical aspects of economics (which can be learned later), in favour of the compulsory inclusion of (a) philosophy, (b) political science and (c) economic history. Three reasons for interdisciplinary studies are given. In the discussion of the place of mathematics in economics fuzziness enters when the symbols a, b, c are identified with individuals, firms, or farms. The identification of the precise symbol with the often ambiguous and fuzzy reality, invites lack of precision and blurs the concepts. If the social sciences, including economics, are regarded as a “soft” technology compared with the “hard” technology of the natural sciences, development studies have been regarded as the soft underbelly of “economic science”. In development economics the important question is: what are the springs of development? We must confess that we cannot answer this question, that we do not know what causes successful development.

Governance

The paper argues against the currently fashionable case for “state minimalism”. It argues for a strong, activist state, though operating on a different basis and in different areas from the many recently failed interventionist states and many developing countries. The paper seeks to rescue alternative perspectives, such as the importance of the “civil society” that cuts across national boundaries. Global participation is examined. “Market-friendly” interventions are welcomed only if they are “people-friendly”. The role of the civil society, the problems of the post-socialist countries and the role of the fashionable slogans privatisation, liberalisation, deregulation and decentralisation are analysed. These are seen to call for many qualifications. The links between democracy, capitalism and development are reviewed. The social capital of trust and reciprocity that is invested in norms and networks of civic life is seen as a vital factor of effective government and economic progress. Should economic reform precede political reform in the countries in transition? Some lessons can be learned for the developing countries from the countries in transition. An analysis of the politics and the political economy of development aid follow. Buffers between donors and recipients are suggested, such as mutual monitoring of each other’s performance by recipients, a council of wise men and women, or a secretariat with genuinely global loyalties. A quiet style in aid-giving is also an option, when potential improvers are rewarded, without the imposition of conditionality. The paper then goes on to a presentation of various theories of the state. A non-maximising theory is recommended. It ends with a set of policy conclusions for governments and for aid agencies.

Human Development: Means and Ends

Sometimes the change in the fashions of thinking about development appears like a comedy of errors, a lurching from one fad to another. Economic growth, employment creation, jobs and justice, redistribution with growth, basic needs, bottom-up development, participatory development, sustainable development, market-friendly development, liberation, liberalisation, human development; thus goes the carousel of the slogans. But this would not be a correct record. There has been an evolution in our thinking about development. Both internal logic and new evidence have led to the revision of our views. Previous and partly discarded approaches have taught us much that is still valuable, and our current approach will surely be subject to criticisms. A brief survey of the evolution of our thinking may be helpful. The discussion started in the 1950s, influenced by Arthur Lewis (1955) and others, who emphasised economic growth as the key to poverty eradication. Even at this early stage, sensible economists and development planners were quite clear (in spite of what is now often said in caricature of past thought) that economic growth is not an end in itself, but a performance test of development. Arthur Lewis defined the purpose of development as widening our range of choice, exactly as the Human Development Reports of the United Nations Development Programme do today. Three justifications were given for the emphasis on growth as the principal performance test. One justification assumed that through market forces–such as the rising demand for labour, rising productivity, rising wages, lower prices of the goods bought by the people–economic growth would spread its benefits widely and speedily, and that these benefits are best achieved through growth. Even in the early days some sceptics said that growth is not necessarily so benign. They maintained that in certain conditions (such as increasing returns, restrictions to entry, monopoly power, unequal distribution of income and assets), growth gives to those who already have; it tends to concentrate income and wealth in the hands of the few.

What’s Wrong with Contemporary Economics?

It is argued that in educating economists we should sacrifice some of the more technical aspects of economics (which can be learned later), in favour of the compulsory inclusion of (a) philosophy, (b) political science and (c) economic history. Three reasons for interdisciplinary studies are given. In the discussion of the place of mathematics in economics fuzziness enters when the symbols a, b, c are identified with individuals, firms, or farms. The identification of the precise symbol with the often ambiguous and fuzzy reality, invites lack of precision and blurs the concepts. If the social sciences, including economics, are regarded as a “soft” technology compared with the “hard” technology of the natural sciences, development studies have been regarded as the soft underbelly of “economic science”. In development economics the important question is: what are the springs of development? We must confess that we cannot answer this question, that we do not know what causes successful development

Pathogenesis of hyperadrenergic orthostatic hypotension: Evidence of disordered venous innervation exclusively in the lower limbs

The pathogenesis of hyperadrenergic orthostatic hypotension was studied in eight patients. Correction of the abnormal orthostatic changes by an inflated pressure suit (MAST) confirmed previous evidence of excessive gravitational pooling of blood in the leg veins. Intravenous L-norepinephrine infusion raised diastolic blood pressure in the same relationship to the infusion-induced increments in plasma norepinephrine concentrations as in normal subjects, indicating normal arteriolar responses. Contractile responses of the veins to infused L-norepinephrine were measured with a linear variable differential transformer (LVDT). The venous responses of hand veins in the patients fell within the 95% confidence limits of the responses of normal hand veins, as did the responses of foot veins in the seven normal subjects. However, foot veins of the patients with hyperadrenergic orthostatic hypotension, and both hand and foot veins of patients with "diffuse" autonomic failure, were supersensitive to norepinephrine, as reflected by a steeper slope of the regression of log (norepinephrine infusion rate) on percentage reduction in venous distensibility, and a significantly lower ED50 (i.e., norepinephrine infusion rate that induced 50% reduction in venous distensibility). The findings suggest anatomical or functional postganglionic denervation of lower limb veins causing excessive gravitational blood pooling with consequent orthostatic hypotension in these patients