New book emphasizes the ties between social economics and law

LawSE Over the last half-century, the economic approach to law (or “law and economics”) has become the most successful instance of “economic imperialism,” the extension of the neoclassical economic paradigm to other fields of study. Given the shortcomings of that paradigm, however, law-and-economics misses much of the complexity of human choice and the ethical nature of the law that cannot be captured in terms of utility and efficiency alone. Social economics, on the other hand, emphasizes the importance of ethical values to economic theory, practice, and policy, but to date it has engaged very little with the law. Perhaps this is due to an antipathy to the economic imperialism of mainstream law-and-economics. After all, social economists tend to be methodological pluralists that respect the contributions and insights of other disciplines. But we do not have to “co-opt” the law in order to apply social economics thinking to problems involving the law or to incorporate legal aspects of the economy and society into our work. By its very nature, law is a social enterprise concerned with values such as justice, dignity, and equality, as well as efficiency—which is how social economists conceive of the economy itself. The economy and the law work together within a society to influence economic behavior and outcomes, and social economists need to acknowledge this interrelationship if we hope to understand the broader nature of the social economy we study.

In 1993, Steven Medema published his classic article “Is There Life beyond Efficiency? Elements of a Social Law and Economics” in the Review of Social Economy, in which he laid out various ways in which social economics could contribute to the economic analysis of law. In the 20 years since his article appeared, however, few have picked up his baton, much less run with it. Law and Social Economics: Essays in Ethical Values for Theory, Practice, and Policy is an attempt to rectify this situation and renew social economists’ engagement with the law. Drawn from papers presented at meetings of the Association for Social Economics (at the Allied Social Science Association meetings) and the Law and Society Association, the essays contained in this volume explore several areas in which social economics and law can inform and enrich each other. Divided into theory and applications, the ten chapters in this volume, written by an international assortment of scholars from economics, philosophy, and law, employ a wide variety of approaches and methods to show how a more ethically nuanced approach to economics and the law can illuminate both and open up new avenues for studying social-economic behavior, policy, and outcomes in all their ethical and legal complexity.

On behalf on the contributors, I hope this volume inspires social economists to engage with the law in their work, introduces legal scholars to the unique advantages social economics can provide, and leads to greater cooperation between the two in the future.

This post was adapted from editor Mark D. White's introduction to Law and Social Economics. For more information on this title, see its page at Palgrave Macmillan.


Me jan 2015Mark D. White is Chair and Professor in the Department of Philosophy at the College of Staten Island/CUNY, where he teaches courses in philosophy, law, and economics. He is the author of four books and over 50 journal articles and book chapters, and edited or co-edited over a dozen volumes. He is the series editor of “Perspectives from Social Economics” for Palgrave Macmillan and “On Ethics and Economics” for Rowman & Littlefield International, and he served as president of the Association for Social Economics in 2014. He can be found on Twitter as @profmdwhite.


Lascaux, "Crowding Out Trust in the Informal Monetary Relationships: The Curious Case of the Hawala System"

ForumTrust, along with other influential norms of cooperation, has been traditionally viewed as an important coordination mechanism stabilizing expectations of the participants in the informal economic exchanges. Drawing on the example of the informal value transfer system called hawala, this paper, however, shows that the role of safeguard against opportunism in the informal monetary settings is much more reliably performed by the instruments of social control. Norms of control embedded in community beliefs and common social practices among the hawala members entirely replace trusting attitudes, rendering them superfluous for the purpose of protecting financial interests of clients and intermediaries in this informal system of monetary exchanges.

Alexander Lascaux, "Crowding Out Trust in the Informal Monetary Relationships: The Curious Case of the Hawala System." Forum for Social Economics, 44/1 (2015), pp. 87-107.


Elsner & Schwardt, "From Emergent Cooperation to Contextual Trust, and to General Trust: Overlapping Meso-Sized Interaction Arenas and Cooperation Platforms as a Foundation of Pro-Social Behavior"

ForumWe identify and elaborate some critical factors and mechanisms that foster the emergence of cooperative behavioral patterns. Through institutionalization, which solves social dilemmas through habituation, these factors and mechanisms provide the foundation of contingent cooperation and contextual trust in specific interaction ‘arenas’ and ‘meso’-sized ‘platforms’ (and related carrier groups) in these. This, then, may in turn support the emergence of general trust in the whole population, i.e., across all specific arenas and platforms. The emergence of institutions of cooperation may gain traction more easily in smaller arenas. This, and the transfer, spillover, or generalization to other arenas and platforms, is by no means determined, and the analytical foundation we offer permits to account for the different levels of cooperation, general trust, and socioeconomic performance observable in real-world economies (varieties of capitalisms). Directions of future research, as well as a policy focus, are provided as well.

Wolfram Elsner & Henning Schwardt, "From Emergent Cooperation to Contextual Trust, and to General Trust: Overlapping Meso-Sized Interaction Arenas and Cooperation Platforms as a Foundation of Pro-Social Behavior." Forum for Social Economics, 44/1 (2015), pp. 69-86.


Piovani & Aydiner-Avsar, "The 2008/09 Economic Crisis: The Impact on Psychological Well-Being in the USA"

ForumThe 2008/09 economic crisis has been the worst crisis of capitalism since the Great Depression. The causes and implications of the so-called “Great Recession” have been widely documented, but the effects of the crisis on psychological well-being have only received limited attention. Using state-level data, this paper aims to assess empirically the impact of the 2008/09 crisis on several indicators of mental health in the USA. The results indicate that unemployment and income levels have a significant and detrimental impact on mental health. This implies that social protection systems—and in particular labor market programs—play a paramount role in reducing the adverse impact of the crisis on mental health.

Chiara Piovani & Nursel Aydiner-Avsar, "The 2008/09 Economic Crisis: The Impact on Psychological Well-Being in the USA." Forum for Social Economics, 44/1 (2015), pp. 18-45.


Beja, Jr., "Empirics on the Long Run Relationship Between Economic Growth and Happiness"

ForumThe paper finds a statistically significant positive but very small long-run relationship between economic growth and happiness. Reading the evidence as such can mean a rejection of the Easterlin Paradox. The trivial size of the estimated relationship nonetheless indicates little economic significance, if at all. The paper, in turn, argues that using economic significance rather than statistical significance in the evaluation of the evidence can actually lead to a confirmation of the Easterlin Paradox.

Edsel L. Beja Jr., "Empirics on the Long Run Relationship Between Economic Growth and Happiness." Forum for Social Economics, 44/1 (2015), pp. 3-17.


Economics After the Crisis, by Irene van Staveren

Irene bookA year after the fall of Lehman Brothers, The Economist's headline proclaimed the end of modern economics. What has happened since? Well... almost nothing.

Mainstream and near-mainstream economic textbooks still sell like before. And INET has supported some initiatives that eliminate the rough sides of neoclassical thought and neoliberal policy advice. Very laudable initiatives, with, for example, Wendy Carlin's work on developing a new undergraduate curriculum CORE. But students of economics are not satisfied with these minor changes, so many years after the start of the financial crisis. Their Rethink Economics petition demands more fundamental changes to textbooks.

As a supporter of every single petition, pamphlet, op-ed, and plea for pluralism in economics before and after the crisis, I decided three years ago that I should practice what I preach. The result is Economics after the Crisis, a pluralist introductory textbook published by Routledge in January 2015. It offers a tool to understand the basics of economics from four theoretical perspectives either for use in the classroom or for self-study alongside a standard course book. The theories are presented in every chapter, micro and macro. And from interdisciplinary and close to real-world experiences to mathematically in an idealized world of perfect markets and agents following the single ethical guide of utility maximization. The book presents social economics, institutional economics, post Keynesian economics, and neoclassical economics and thereby shows that almost no economic concept or tool is theory-neutral. If only this message gets across, the book will have accomplished already more than I could hope for.

The window of opportunity to reform economic teaching is almost shut. Banks pass stress tests in Europe and the US while still being too big to fail. Nobel Prizes are awarded to economists who show no effort at all in rethinking economics. And economic policies ignore the danger of continuously increasing private and public debt, while shifting the consequences of such myopia on disadvantaged groups and whole populations.

If it is not now, we may have to wait for the next crisis to change economic thinking and teaching. I truly hope that the combined efforts of critical economists, activist students, and courageous teachers will help to make the change. We cannot afford to standby any longer.

* * * * *

IreneIrene van Staveren is professor of Pluralist Development Economics at the Institute of Social Studies of Erasmus University Rotterdam, the Netherlands. She was awarded the 2014 Lifetime Achievement Thomas Divine award by the Association of Social Economics.


"Pluralism Now!" petition from the French Association of Political Economy

A message from Bruno Tinel of Université Paris:

The French Association of Political Economy is now launching an international campaign called "Pluralism Now!"

Please sign the petition (there is also some contextual and background information at the link).


Call for papers: ASE at the Southern Economic Association

Call for Submissions for the Southern Economic Association Conference
New Orleans, November 21-23, 2015

The annual conference of the Southern Economic Association will be held at the New Orleans Marriott in New Orleans, LA during November 21-23, 2015 (Saturday-Monday). The Association for Social Economics will host one or two sessions at the Southern meetings this year. Research oriented towards the labor market, health, education, poverty, family structure, and welfare of the general population in the U.S. as well as in any other parts of the world are especially welcome.

Email submissions must include the author's (and co-author's) name, affiliation, address, fax number, phone number and email address. The title of the paper and two JEL code classifications should also be attached with the proposal.

Please submit your proposals to Dr. Aparna Mitra (amitra@ou.edu) by April 1, 2015.


Call for papers: "Rethinking Economics," IIPPE’s Sixth International Conference in Political Economy

“Rethinking Economics: Pluralism, Interdisciplinarity and Activism”

University of Leeds, UK

September 9-11, 2015

Call for Papers – Panel organised by Social Capital Working Group

Social Capital: Re-capturing the Collective Dimensions of the Economy for a More Pluralist and Interdisciplinary Economics

Asimina Christoforou, Athens University of Economics and Business
Luca Andriani, Birkbeck, University of London

Social capital, identified generally as trust, norms and networks, is often studied for the ways it can facilitate cooperation for individual well-being and social welfare. Yet critical views of social capital claim that even though the concept was applied to underscore aspects of collective action, it provided economists and institutions oriented toward the neoclassical tradition with the means to promote individualist and instrumentalist perceptions of social capital that overlook collective dimensions of the economy. Nonetheless, there have been many attempts to re-contextualise and re-operationalise the concept of social capital in order to incorporate its collective aspects on the basis of alternative principles of human behaviour. Generally these attempts support the collaboration of scholars in various disciplines and the application of different approaches and methods, and aspire to restore the pluralist and activist features of the economy and economics.

These collective dimensions, characteristic of social and scholarly discourse (even more so in the social sciences that study human behaviour), can pertain to: the social and institutional embeddedness of the economy; the pluralism of needs, priorities, values and attitudes; the complex processes of participation and coordination, struggle and debate, collaboration and consensus between diverse and conflictual interests in both the public and private spheres; and the combination of multiple meanings and principles, and thus of various disciplines and perspectives of social science research, aiming at a more realistic and holist understanding of the economy.

In this context, we would like to invite contributions that re-address the concept and measures of social capital in a way that enables us to incorporate the complex reality of social relations, as a dynamic space where people interact, define and pursue, individually and collectively, principles and objectives, means and ends for well-being. Such alternative perceptions have the potential not only to helps us rethink the ways we see social relations, but also the way we see the economy and economics.

Thus, we encourage contributions that not only deal with the ontology and methodology of social capital, but also examine how this can become a vehicle to re-capture the collective aspects of the economy and economics. Included are contributions that focus on how networks, organisations, and various collectives can impact the way we perceive the economy and economics and become advocates of pluralism, multiplicity and activism. We welcome works that derive from various social science disciplines and use different units of analysis (individual, regional, country or cross-country level), methodologies and techniques (theoretical, empirical, qualitative and quantitative).

Abstracts (500 words maximum) should be submitted to Asimina Christoforou (asimina.christoforou@gmail.com) and Luca Andriani (luca.andriani@bbk.ac.uk) by March 25, 2015.


Robert Prasch, RIP

From the ASE listserv...

PraschIt is very sad to report that Robert E. Prasch, professor of economics at Middlebury College, has died unexpectedly.

Bob was a heterodox economist, an institutionalist (a past president of the Association for Evolutionary Economics), a post-Keynesian, a social economist, an economic historian, and an historian of economics.  He graduated Phi Beta Kappa from the University of Colorado at Boulder in economics and history, earned a master’s in economics from University of Denver, and earned a Ph.D. in economics from University of California at Berkeley. 

In addition to his over 80 book chapters, reviews, and journal articles, he published How Markets Work: Supply, Demand and the ‘Real World’ in 2008, co-edited Thorstein Veblen and the Revival of Free Market Capitalism with Janet Knoedler and Dell Champlin in 2007, and co-edited Race, Liberalism, and Economics with his wife and Hampshire College philosopher Falguni Sheth and Middlebury colleague David Colander in 2004.  Bob was in the process of finishing two books: “A Wage of Her Own: The Rise and Fall of Progressive Era Minimum Wage Legislation for Women: 1913-1923” and “The Political Economy of Empire.”  After the financial crisis, he regularly lectured at Middlebury on “Why Financial Markets May Not Be Self-Stabilizing.”

Bob was a progressive economist, a pluralist, and an outgoing, kind and generous person.  He will be truly missed.