The institutional context of rationality

In the last three decades, mainstream economics has been influenced by authors associated with new institutional economics and new behavioral economics. The dispute over rationality as an assumption of economic theories is becoming particularly evident and is taking new forms. The aim of this article is to examine the connections between the institutional and behavioral approaches as well as between researchers’ ideas as to what rationality is and their beliefs regarding an optimal economic system. It will demonstrate that so-called behavioral and institutional economists have more in common than not. Institutions play a key role in the arguments of behavioural economists, whereas the argument of institutional economists is almost always based on the issue of human cognitive abilities and emotions. What directly links the two trends is the attention given to the rationality of actions that an individual takes as a premise of economic choices and as an assumption of economic theories. Differences in views relate to the understanding of rationality and exist within the framework of behavioral economics itself. At the core of the dispute is the distinction between two concepts of rationality: constructivist and ecological. This distinction serves as a starting point for the second matter discussed in the article. The author argues that the concept of constructivist rationality is related to the vision of the top-down creation of social order, while the proponents of the ecological approach to rationality stress the importance of market institutions. Interestingly, from the perspective of cognitive psychology and the heuristics of Daniel Kahneman, it can be presumed that the convictions of a scholar about the “ideal system” can influence his or her arguments on the essence of human rationality.Publication of English-language versions of the volumes of the “Annales. Ethics in Economic Life” financed through contract no. 501/1/P-DUN/2017 from the funds of the Ministry of Science and Higher Education devoted to the promotion of scholarship

Failure of the market, state and economics from the perspective of the financial crisis

The debate between the advocates of market and interventionist solutions, primarily based on pitting the market against regulation, has escalated as a result of the financial crisis. The objective of the paper is not only to analyze the advantages and drawbacks of alternative regulatory mechanisms in the light of the global economic downturn, but also to evaluate the modern economy from this perspective. The paper focuses on three hypotheses. 1. It is illegitimate to pit the market against regulation. 2. The crisis resulted from the violation of the principles of classical liberalism, which was precipitated both by inadequate policies and by modern economic methodology. 3. Critical analysis of the methodology and logic of the development of 20th century economic thought reveals the existence of a systemic failure of the dominant doctrines in mainstream economics.Spór między zwolennikami rozwiązań rynkowych i interwencjonistycznych, oparty zazwyczaj na przeciwstawianiu rynku i regulacji, uległ zaostrzeniu wskutek kryzysu finansowego. Celem artykułu jest nie tylko analiza zalet i zagrożeń alternatywnych mechanizmów regulacji z perspektywy kryzysu w gospodarce światowej, ale także próba oceny z tej perspektywy współczesnej ekonomii. Rozważania skoncentrowane są wokół trzech hipotez. Po pierwsze, błędne jest przeciwstawianie systemu rynkowego i regulacji. Po drugie, u podstaw kryzysu leży pogwałcenie zasad klasycznego liberalizmu, które ma źródła zarówno w polityce, jak i metodologii współczesnej ekonomii. Po trzecie, krytyczna analiza metodologii i logiki rozwoju myśli ekonomicznej w XX wieku może uzasadniać tezę o systematycznym błędzie doktryn, który zdominowały główny nurt ekonomii

The Coase theorem and idea of transaction costs – their significance for the development of economics

Ronald Coase drew the attention of main stream economists to the significance of social coordination in the economic system. The key role was played here by much-disputed political conclusions drawn from Coase's idea as well as by his famous theorem and the zero transaction costs theory. The study focuses on the division of labor as a starting point for analysis of zero transaction costs. From this vantage point, the best example of the world of zero transaction costs is Robinson Crusoe's island. However, very often the concept of zero transaction costs is associated with the assumption of perfect information. If we stretch this assumption to its logical limits, then there is no market mechanism and all impediments related to the central planning system disappear. This interpretation is in line with the Hayekian interpretation of the market as a mechanism for acquiring knowledge.Ronald Coase skierował uwagę ekonomistów głównego nurtu na znaczenie społecznej koordynacji w systemie ekonomicznym. Kluczową rolę odegrały tu zarówno kontrowersyjne wnioski polityczne wyprowadzane z idei Coase'a, jak i słynny teoremat i koncepcja zerowych kosztów transakcji. W artykule uwaga skoncentrowana jest na podziale pracy jako punkcie wyjścia do analizy zerowych kosztów transakcji. Z tego punktu widzenia najlepszym przykładem świata zerowych kosztów transakcji jest wyspa Robinsona. Najczęściej jednak koncepcja zerowych kosztów transakcji wiązana jest z założeniem doskonałej informacji. Jeżeli założenie to doprowadzamy do jego logicznych granic nie ma mechanizmu rynkowego oraz znikają wszelkie trudności systemu centralnego planowania. Ta interpretacja jest zbieżna z hayekowską interpretacją rynku jako mechanizmu odkrywania wiedzy

Czy ekonomia behawioralna odpowiada na wyzwania współczesności?

This paper briefly reviews select key attainments of behavioral economics. That new school of economics have recently increased the explanatory power of economics by providing it with more realistic psychological foundations. Daniel Kahneman has challenged the assumption that individuals behave in a manner consistent with conventional economic theory. However, from viewpoint of institutional methodology, there are important reasons why behavioral economics should research all human behavior as social embedded and social organized. Referring to the causes of the recent crisis, we present view that behavioral economics must be embedded in an institutional paradigm

Funkcje państwa i rynku z perspektywy kryzysu finansowego

The perennial conflict between the supporters of market solutions and interventionism is based on contrasting the market with regulation. The aim of this article is to analyze the opportunities and threats faced by alternative regulation mechanisms from the perspective of the crisis in the global economy, as well as to give an account of contemporary economics from this angle. The article is focused around three hypotheses. First, development of the modern financial sector has changed functions of market prices. Second, it is a mistake to put the market system and regulation in opposition to each other. Third, the underlying cause of the crisis is the violation of classical rules of rational economy. The last one results both from politics and the methodology of contemporary economics

System naturalnej wolności Adama Smitha

Autorka analizuje ideę wolności w poglądach Adama SmithaPublikacja dofinansowana ze środków przyznanych w ramach dotacji dla Wydziału Prawa i Administracji Uniwersytetu Łódzkiego na rozwój młodych naukowców i doktorantó

Interaction between Formal and Informal Insitutions in the Process of Transformation from a Planned to a Market Economy

Wydrukowano z dostarczonych Wydawnictwu UŁ gotowych materiałówIn the light of new institutional economics and the history of transformation, the nature of social change becomes an issue of primary importance. To explain this phenomenon, the new institutional economics has turned to the theory of interaction between formal and informal institutions. In this article the thesis functions as a tool for interpreting political and economic changes in the countries of Central Europe, the Balkan countries, the Former Soviet Union and in China. Analysis of the Democracy Scores published by Freedom House seems to confirm the dominant presupposition saying that democracy, clarity and observance of social cooperation rules, a high level of social trust, and high moral standards of individua ls favour economic growth. But case of the China transformation shows that i nstitutions that have proved successful in the West does not necessarily provide the best solutions for underdeveloped countries. An optimal transformation policy depends on a given cultural background and political situation. However, despite important differences, some similarities between the transformation processes taking place in different regions and countries are discernible. The common feature of all transformation processes is greed and a lack of responsibility on the part of the ruling elites, which pose the greatest threat to reforms and economic development in the long run

Kapital fizjologiczny jako czynnik wzrostu gospodarczego i dobrobytu społecznego

Wydrukowano z dostarczonych Wydawnictwu UŁ gotowych materiałów.Robert Fogel’s economic history has given not only a new and interesting interpretation of the economic past but also the ground to face the challenges of globalization and demographic development. Idea of physiological capital as factor affecting economic growth follows from Fogel’s hypothesis about synergism between rapid technological changes and improvement in human physiology. His theory of technophysiological evolution is also a source of new view on the measurement of economic growth and social welfare. Fogel has convinced us that successful economic and social policy has to be based on a long-run perspective and that research of economic historians is very important for economists and politicians. From secular trends in physiological capital, one can infer implications for policy in health care and education.Zadanie pt. „Digitalizacja i udostępnienie w Cyfrowym Repozytorium Uniwersytetu Łódzkiego kolekcji czasopism naukowych wydawanych przez Uniwersytet Łódzki” nr 885/P-DUN/2014 zostało dofinansowane ze środków MNiSW w ramach działalności upowszechniającej naukę

Adam’s Smith’s Concept of a Great Society and its Timeliness

The article aims to present the concepts of Adam Smith which are important considering the current disputes over liberalism, as well as the challenge that is the maintenance of the world’s economic order. Firstly, the article analyses the significance of the division of labour which is perceived as a fundamental premise for transitioning from small communities and face-to-face exchanges to the impersonal exchange and the expanded social order in which relations with strangers become meaningful. Secondly, the present work indicates that Smith did not neglect the matter of justice when proclaiming the need for freedom. He believed that efficient functioning of the market depends on the political system and a man’s ethical system, and his criticism of interventionism was not directed against the state as an institution co-creating the social order, but against the act of granting special privileges to certain interest groups. Thirdly, the article refers to the concept of coordination described by Scottish moral philosophers and the so-called Smith Problem. In this context, the article presents arguments against the assumption that John Nash’s theory provided proof of the erroneous nature of Adam Smith’s concepts. Arguments in favour of the timelessness of the economic philosophy of the father of economics are also drawn from Vernon Smith’s experimental economy and the research of evolutionary psychologists

Экономика и социальная инженерия в перспективе глобального кризиса

In opposition to the negative connotations attached to the term ‘social engineering’ in economics, this article tries to call attention to the approach to engineering as a paradigm for scientific research, as recommended by S.L. Goldman. Goldman makes clear that methodological controversy in economics around the concept of rationalism may apply to all sciences. The history of economics and the experiences derived from the most recent crisis confirm Goldman’s standpoint about the need for change in the approach dominant in Western science. Following the approach adopted natural sciences and accepting a rationalistic–positivist view of science, orthodox economists have squandered the potential embedded in the methodological approach defended by heterodox economists. In light of the engineering paradigm, neither the scientist nor the engineer face the dilemma described by G. Mankiw. For the macroeconomist applying the engineering paradigm, practical action, the solving of running problems, observation of tangible reality, and the need to take into account concrete targets and values are all valuable elements of research procedure protecting him against modeling that is isolated from realistic premises.Вопреки отрицательным коннотациям понятия «социальная инженерия» в экономике, автор хочет обратить внимание на рекомендуемый С.Л.Гольдманом подход к инженерии как к парадигме научных исследований. Концепция Гольдмана дает новые аргументы в пользу целесообразности пересмотра подхода к рациональности, а история экономики и опыт последнего кризиса подтверждают тезис Гольдмана о необходимости ревизии преобладающего в западной науке подхода. Ортодоксальные экономисты, следуя за естествознанием и принимая позитивистское представление о науке, утратили возможности, таящиеся в методологическом подходе гетеродоксных экономистов. В свете парадигмы инженерии ни ученый, ни инженер не встает перед дилеммой, описываемой Г. Манкивом. Только практическая деятельность, решение текущих проблем, наблюдение за конкретной действительностью и необходимость учета конкретных целей и ценностей, являются для макроэкономиста, применяющего парадигму инженерии, важными элементами исследовательского поведения, защищающими его от оторванного от реалистических предпосылок моделирования