The Design of Free-Market Economies in a Post-Neoclassical World

The ‘Washington Consensus’ supporting competitive frames and market solutions in economics and law was shown inadequate to address social problems in non-U.S. settings. So would diversity and dynamics suggest theories in need of adjustment to other realities such as culture, increasing returns and market power. Reform must account for an economics of falling cost, ecological limits and complementarity in our relations. Such shall open new applications for economics and law. In this paper a theory of planning horizons is introduced and then employed to raise some meaningful questions about the neoclassical view with respect to its substitution, decreasing returns and independence assumptions. Suppositions of complementarity, increasing returns and interdependence suggest that competition is inefficient by upholding a myopic culture resistant to change. Growth – though long believed to rise from markets and competitive values – may not derive from these sources. Instead, as civilizations advance, shifting from material wants to higher-order intangible output, they evolve from market tradeoffs (substitution and scarcity) into realms of common need (complementarity and abundance). If so, then neoclassical arguments shall no longer apply to any advanced information economy also restrained by its ecology. Indeed, this paper opens standard theory into a more general framework constructing ‘horizon effects’ into a case for cooperation – as more efficient than competition for all long-term problems of growth. The case is made that competition is keeping us stupid and immature, rewarding a myopic culture at the expense of learning and trust, therefore retarding economic growth instead of encouraging it as believed. The policy implications of horizonal theory are explored, with respect to regulatory aims and economic concerns. Such an approach emphasizes strict constraints against entry barriers, ecological harm, market power abuse and ethical lapses. Social cohesion – not competition – is sought as a means to extend horizons and thereby increase efficiency, equity and ecological health. The overriding importance of horizon effects for regulatory assessment dominates other orthodox standards in economics and law. In sum, much of the reason for the failure of the Washington Consensus stems from myopic concerns central to any horizonal view. Reframing economics along horizonal lines suggests some meaningful insight to how regulations should be designed to keep pace with this approach in economics and law

A theory of planning horizons (1): market design in a post-neoclassical world

The neoclassical case supporting competitive frames and market solutions has failed to promote stable world-wide economic development. Other approaches in economics incorporate social culture, increasing returns, market power, ecological limits and complementarity, yielding broader applications for development theory. In this paper a theory of planning horizons is introduced to raise some meaningful questions about the traditional view with respect to its substitution, decreasing returns and independence assumptions. Suppositions of complementarity, increasing returns and interdependence suggest that competition is inefficient by upholding a myopic culture resistant to learning. Growth – though long believed to rise from markets and competitive values – may not derive from these sources. Instead, as civilizations advance, shifting from material wants to higher-order intangible output, they evolve from market tradeoffs (substitution and scarcity) into realms of common need (complementarity and abundance). The policy implications of horizonal theory are explored, with respect to regulatory aims and economic concerns. Such an approach emphasizes strict constraints against entry barriers, ecological harm, market power abuse and ethical lapses. Social cohesion – not competition – is sought as a means to extend horizons and thereby increase efficiency, equity and ecological health. The overriding importance of horizon effects for regulatory assessment dominates other orthodox standards in economics and law. Reframing economics along horizonal lines suggests some meaningful insight on the proper design of economic systems

What Went So Wrong in Economics

Abstract What went so wrong in economics started in 1939 with ‘The Hicksian Getaway,’ where – after over ten years of debate assuming increasing returns – Hicks asserted decreasing returns as the basis for his competitive frame, dismissing any “useful analysis” of increasing returns. After winning the 1972 Nobel Prize for his 1939 work, Hicks (1977, pp. v-vii) apologized for ‘The Hicksian Getaway,’ calling it “nonsense” and “an indefensible trick that ruined the ‘dynamics’ of Value and Capital.” After a series of failed attempts to integrate time into production theory, in 1958 Armen Alchian proposed a method to do so with nine propositions showing the relation of time to cost, which Julius Margolis (1960) extended into a horizonal theory of price. Jack Hirshleifer (1962) saw Alchian’s (1958) frame as a threat to neoclassical theory, declaring his aim as “rescuing the orthodox cost function.” ‘The Hirshleifer Rescue’ of decreasing returns was seamlessly folded into economics as a ‘proof’ that decreasing returns was “a general and universally valid law” of economics, according to Alchian (1968). The present paper debunks ‘The Hirshleifer Rescue’ to show the case for decreasing returns and competition rests on unfounded assertion, especially for all long-run analyses. The paper explores the implications of an increasing returns economy of complementarity and abundance in networks, with a case for efficient cooperation. The claims in Nicholas Kaldor’s papers are thus extended into an integral theory of planning horizons, as a formalization of Herbert Simon’s notion of bounded rationality. An increasing returns economics is a horizonal economics

The case for increasing returns (2): the methods of planning horizons

In neoclassical economics, substitution assumptions support equilibrium models in closed systems shunning interdependence. On these grounds an array of frames show outcomes as stable, efficient, unique and determinate. Heterodox economists say equilibrium models sidestep practical knowledge and the rich reality of economic behavior. Rigor or realism, mainstream or radical, ecological, institutional, socio-cultural: economics invites a wide diversity of assumptions, once short-term models of substitution are opened to question. The answers are blurred by applications; there is clarity in a simplicity shielded from mundane detail. This paper addresses the methodological impact of planning horizons, increasing returns and complementarity, and their proper representation in economic constructions. Horizonal economics can be construed as extending orthodox standards into a realm of time, but for its subtler ramifications. Increasing returns make our relations complementary and not substitutional, loosening the tight deductions from mainstream models of choice.The horizonal extension of our received theory of price applies time to cost and demand curves, showing Marshallian scissors (supply and demand) cut outward and downward with expanded horizons. Static conceptions appear in horizonal groups, suggesting complete theories of price should specify agents’ horizons, with no further radical impact: the trouble emerges with increasing returns and complementarity. Horizons stem from unbounded causality; if all we do ripples outward forever in nature and society, the relevant field of inquiry for economics is interdependent: this is the case for bounded rationality as an analytical limit to economic conceptions. In turn, interdependence suggests a use of network constructs to frame complex systemic cascades, and networks open a door to complementarity and increasing returns in transport and information exchange. The gaping maw of increasing returns and complementarity opens, swallowing down neat traditions such as stability, equilibrium, marginalism, partial analysis, supply and demand depictions of price, etc. The methodological lesson of this shift to network contexts and dynamic complex systems supersedes some of our favored doctrines and the analyses on which they stand. Without decreasing returns and substitution, neoclassical arguments simply do not work. Heterodox approaches – and their intelligent application – are required in this setting. The paper offers a few guidelines to an unexplored domain of fundamental departures

Planning horizons as an ordinal entropic measure of organization

Nicholas Georgescu-Roegen (1971) educated economists on the notion of entropy laws in economics and ecological process. An earlier paper by Kenneth E. Boulding (1962) asked what we might do with a measure of organizational entropy, were one ever devised. The aim of this paper is to propose the notion of planning horizons as a candidate for this role. First, the concept of organizational entropy is discussed and defined within the interdependent domain of ecological economics. Next, the character and contributions of an entropic measure of organization are reviewed, as described in Boulding’s work. Third, the concept of planning horizons – and their relation to economic cohesion, efficiency and well-being – is introduced to show how ‘horizon effects’ (shifts in planning horizons) serve as an ordinal entropic measure of organization in dynamic complex settings of interdependent effects. Last, the promise of planning horizons as a new social research program in ecological economics shall be discussed

Towards expressive modular rule induction for numerical attributes

The Prism family is an alternative set of predictive data mining algorithms to the more established decision tree data mining algorithms. Prism classifiers are more expressive and user friendly compared with decision trees and achieve a similar accuracy compared with that of decision trees and even outperform decision trees in some cases. This is especially the case where there is noise and clashes in the training data. However, Prism algorithms still tend to overfit on noisy data; this has led to the development of pruning methods which have allowed the Prism algorithms to generalise better over the dataset. The work presented in this paper aims to address the problem of overfitting at rule induction stage for numerical attributes by proposing a new numerical rule term structure based on the Gauss Probability Density Distribution. This new rule term structure is not only expected to lead to a more robust classifier, but also lowers the computational requirements as it needs to induce fewer rule terms

Investigation of Nrf2, AhR and ATF4 Activation in Toxicogenomic Databases

Toxicological responses to chemical insult are largely regulated by transcriptionally activated pathways that may be independent, correlated and partially or fully overlapping. Investigating the dynamics of the interactions between stress responsive transcription factors from toxicogenomic data and defining the signature of each of them is an additional step toward a system level understanding of perturbation driven mechanisms. To this end, we investigated the segregation of the genes belonging to the three following transcriptionally regulated pathways: the AhR pathway, the Nrf2 pathway and the ATF4 pathway. Toxicogenomic datasets from three projects (carcinoGENOMICS, Predict-IV and TG-GATEs) obtained in various experimental conditions (in human and rat in vitro liver and kidney models and rat in vivo, with bolus administration and with repeated doses) were combined and consolidated where overlaps between datasets existed. A bioinformatic analysis was performed to refine pathways' signatures and to create chemical activation capacity scores to classify chemicals by their potency and selectivity of activation of each pathway. With some refinement such an approach may improve chemical safety classification and allow biological read across on a pathway level

Application of integrated transcriptomic, proteomic and metabolomic profiling for the delineation of mechanisms of drug induced cell stress

International audience; High content omic techniques in combination with stable human in vitro cell culture systems have the potential to improve on current pre-clinical safety regimes by providing detailed mechanistic information of altered cellular processes. Here we investigated the added benefit of integrating transcriptomics, proteomics and metabolomics together with pharmacokinetics for drug testing regimes. Cultured human renal epithelial cells (RPTEC/TERT1) were exposed to the nephrotoxin Cyclosporine A (CsA) at therapeutic and supratherapeutic concentrations for 14 days. CsA was quantified in supernatants and cellular lysates by LC-MS/MS for kinetic modeling. There was a rapid cellular uptake and accumulation of CsA, with a non-linear relationship between intracellular and applied concentrations. CsA at 15 µM induced mitochondrial disturbances and activation of the Nrf2-oxidative-damage and the unfolded protein-response pathways. All three omic streams provided complementary information, especially pertaining to Nrf2 and ATF4 activation. No stress induction was detected with 5 µM CsA; however, both concentrations resulted in a maximal secretion of cyclophilin B. The study demonstrates for the first time that CsA-induced stress is not directly linked to its primary pharmacology. In addition we demonstrate the power of integrated omics for the elucidation of signaling cascades brought about by compound induced cell stress

Beneficial role of replacing dietary saturated fatty acids by polyunsaturated fatty acids in prevention of sarcopenia: Findings from the NU-AGE cohort:Findings from the nu‐ age cohort

Dietary fat subtypes may play an important role in the regulation of muscle mass and function during ageing. The aim of the present study was to determine the impact of isocaloric macronutrient substitutions, including different fat subtypes, on sarcopenia risk in older men and women, while accounting for physical activity (PA) and metabolic risk. A total of 986 participants, aged 65–79 years, completed a 7‐day food record and wore an accelerometer for a week. A continuous sex‐specific sarcopenia risk score (SRS), including skeletal muscle mass assessed by dual‐energy X‐ray absorptiometry (DXA) and handgrip strength, was derived. The impact of the isocaloric replacement of saturated fatty acids (SFAs) by either mono‐ (MUFAs) or poly‐unsaturated (PUFAs) fatty acids on SRS was determined using regression analysis based on the whole sample and stratified by adherence to a recommended protein intake (1.1 g/BW). Isocaloric reduction of SFAs for the benefit of PUFAs was associated with a lower SRS in the whole population, and in those with a protein intake below 1.1 g/BW, after accounting for age, smoking habits, metabolic disturbances, and adherence to PA guidelines. The present study highlighted the potential of promoting healthy diets with optimised fat subtype distribution in the prevention of sarcopenia in older adults