Following are the contents (with abstracts) of the latest issue of Forum for Social Economics (41/2-3, July-October 2012).
Economic Development, State, Policy, and Social Well-Being – Welcoming the Forum's Double Issue 2–3/2012, Wolfram Elsner
Economic Policy Alternatives, Social Security, the Living Wage, and Social Well-Being
A New Economic Strategy for the USA: A Framework of Alternative Development Notions, Nikolaos Karagiannis and Zagros Madjd-Sadjadi
This paper seeks to provide a new economic strategy for the United States while considering a range of development-related impediments to the country’s recent economic performance. It is argued here that strategic industrial policy needs to come to the center stage if local production growth, competency upgrading, and competitiveness improvement are to be aggressively pursued. The first section outlines the present context of the US economy by discussing economic and socio-cultural aspects. The second main section frames an alternative development paradigm for the United States. Policy recommendations are discussed in the third section. Some brief conclusions end the paper.
The Living Wage, Economic Efficiency, and Socio-Economic Wellbeing in a Competitive Market Economy, Morris Altman
Conventional economic wisdom views a Living Wage as costly in term of economic efficiency and competitiveness. I argue, based on x-efficiency theory, that higher wages need not cause any economic harm and can, on the contrary, generate higher levels of material wellbeing. Higher wages can be expected to induce x-efficiency and technological change cost offsets. In this context, an effective living wage, one that is above some subsistence minimum, can have a net efficiency effect on the economy. Therefore, a living wage greater than the wage rate generated by the free market cannot be predicted to generate economic harm. With the institutional parameters in place to realize a living wage, the economic pie can be expected to grow to accommodate the living wage.
On the Pro-Social Security Rhetoric, Rojhat B. Avsar
We propose to reframe Social Security to offer a coherent anti-privatization rhetoric that has not been fully provided in the contemporary literature. The dissatisfaction that motivated this study centers on the observation that the prevalent anti-privatization rhetoric exposes the drawbacks of Private Retirement Accounts (PRAs), but this rhetoric itself doesn't satisfactorily explain why the current Social Security system is more desirable. In reframing Social Security, we will follow a two-stage strategy. First, we will articulate the desirability of Social Security grounded in the function it serves in a way PRAs are not suited for serving: being a social income insurance scheme whose provision inherently favors the least fortunate in a Rawlsian fashion. Second, we will concentrate how Social Security provides this non-market choice by drawing on the unique resources not entirely available to the market.
Merit Goods and Basic Paradigms of State Activity
Does Libertarian Paternalism Reconcile Merit Goods Theory with Mainstream Economics?, Stefan Mann and Miriam Gairing
In the wake of Musgrave's move to question the absolute hegemony of individual preferences for normative economics in the 1950's by propounding the existence of merit goods, a recent book by Thaler and Sunstein is now making a similar claim under the label of ‘libertarian paternalism’. This paper tackles the question of why the framework of libertarian paternalism has received a so much more friendly reception among economists than the theory of merit goods. The main reason is a better foundation, not only for the conditions under which paternalism may be justified but also for the tools that should be applied, utilizing transaction cost theory.
Globalization and State: Four Paradigmatic Views, Kavous Ardalan
Any adequate analysis of globalization and state necessarily requires fundamental understanding of the worldviews underlying the views expressed with respect to the nature and role of globalization and state. This paper is based on the premise that any worldview can be associated with one of the four basic paradigms: functionalist, interpretive, radical humanist, and radical structuralist. It argues that any view expressed with respect to globalization and state is based on one of the four paradigms or worldviews. It, therefore, discusses four views with respect to the nature and role of globalization and state which correspond to the four broad worldviews. The paper emphasizes that the four views expressed are equally scientific and informative; they look at the nature and role of globalization and state from a certain paradigmatic viewpoint. Emphasizing this example in the area of globalization and state, the paper concludes that there are opportunities for each paradigm to benefit from contributions coming from the other three paradigms.
Comprehensive Heterodox Methodological Critique, and Experimental Economics
Guy Routh's Heterodox Critique of Economic Methodology, Robert W. Dimand and Robert H. Koehn
Guy Routh was an outstandingly incisive and severe critic of mainstream economic theory's abstraction, class bias, and empirical irrelevance. Routh's The Origin of Economic Ideas (1975 1989), with such chapter titles as “The Preposterous Origins” and “From Propaganda to Dogma”, was described by Robert Heilbroner as “irreverent, original, controversial, and delightful” while J. K. Galbraith expressed his “utmost enjoyment” and “utmost approval” of the book. Routh's trenchant critique of mainstream theorizing and his vision of an empirically-grounded alternative have been largely forgotten since his death in 1993, but deserve the attention of heterodox and especially of institutionalist and social economists.
Competition for Power and Altruism, Luigi Bosco
The paper analyzes the trade-off between power and altruism by using an experimental framework which involved a group of experimental agents, undergraduate students of the University of Siena. The results show that the introduction into the experimental structure of a tournament for the power appreciably altered the behaviour of agents. More specifically the degree of altruism, measured by the dictator offers, significantly decreased when the agents were able to trade altruism for power. The results were more clear-cut and robust in the case of the dictator game, but also in the case of the ultimatum game the introduction of the tournament for power altered the behavior of subjects. A significant gender effect emerged.