Between the Gift and the Market: The Economy of Regard..

'The great transformation' from customary exchange to impersonal markets is incomplete. Reciprocal exchange pervades modern societies. it takes the form of 'gifts,' reciprocated without certainty. Reciprocity is driven by the pursuit of 'regard'. Money is avoided in regard exchanges, because it is impersonal. Instead, regard signals are embodied in goods, in services, or in time (attention). The personalization of gifts authenticates the signal. Reciprocal exchange persists in family formation, in intergenerational transfers, in labor markets, in agriculture, the professions, in marketing, entrepreneurship, and also in corruption and crime. Reciprocal exchange is constrained by the time and psychic energy, but is likely to persist as a preferred source of regard.

A warrant for pain: caveat emptor vs. the duty of care in American medicine, c. 1970-2010

Bad ethics can make for bad economic outcomes. Bad ethics are defined hedonically as the infliction of pain on others for private advantage. The infliction of pain is often justified by ‘Just World Theories’, which state that everyone gets what they deserve. Market liberalism (and its theoretical underpinning in neoclassical economics) is one theory of this kind. As an example, the micro and macro underperformance of the American health system c. 1970-2010 is explained in terms of the shift in policy norms from the fiduciary norm "first do no harm" to the neo-liberal market norm of "let the buyer beware" (caveat emptor) since the 1970s

Economic history at Oxford, 1860–2020

Economic history is a distinctive empirical strand of economics, which has been studied and taught at Oxford since the 1860s. Innovation has been provided by a succession of able scholars, and continuity by a stable syllabus in both modern history and social studies. Enduring themes are household welfare, production and exchange, agriculture and population, history of economic thought, government and the economy, and the determinants of economic growth. In the last three decades, the focus has shifted from undergraduate teaching to taught Master’s courses and doctoral research, and from British history to a more international perspective. The discipline began by splitting away from economics but the two approaches are converging again

Economic Welfare Measurements and Human Well-Being.

GDP per head is not only an economic indicator, but is widely used as a welfare indicator. This use not well founded in economic theory. The paper compares income per head with a three groups of alternative indicators: 'extended national accounts', social indicators, and indicators of subjective well-being. All of these methods indicate a decline in the welfare productivity of GDP goods over time

Markets and Public Goods: Integrity, Trust, and Climate Change

Public goods are an anomaly in neoclassical economics, a form of ‘market failure’. They exist outside the efficient and equitable optimality of market exchange. It can be shown however that competitive markets are only efficient in short product cycles. Long-term objectives require social support. Corruption arises from the consequent private public interaction. Integrity, the absence of corruption, is a public good. Corruption has risen since the 1980s with privatization and outsourcing. How did European governments become honest in the first place? In the century after the 1770s, they moved from regarding public office as a form of private property to a conception of serving the public good. This integrity revolution was facilitated by Weberian bureaucracies, selected by academic merit and committed to impartiality by long-term incentives. The neoliberal revolution of the 1980s regarded bureaucracies as obstructive and slow. It admired the business corporation with its opaque procedures and charismatic leadership. Concurrently economics moved from neoclassical harmony theory to an asymmetric information model of ‘opportunism with guile’, providing doctrinal legitimacy for corruption. Corporate advertising is deliberately deceptive, and undermines the public good of trustworthiness. Digital platforms, powered by advertising, have subverted public discourse. Misinformation and disinformation have become prime risk factors for current societies. The practical operation of markets undermines the public goods of integrity and trustworthiness. The public good of a habitable climate cannot be achieved by market methods. For long-term payoffs, ‘free markets’ are a harmful delusion, inefficient, corrupt, impossible to achieve, and not sustainable

Why has the Public Sector Grown so Large in Market Societies? The Political Economy of Prudence in the UK, c. 1870-2000.

The public sector allocates 40 percent of expenditure in Britain. Why do affluent consumers acquire so much welfare outside the market? If choice is affected by myopic bias, optimisation is costly, consumer choice is fallible, and collective consumption provides a ‘commitment device’. For a century after 1870, collective investment gave superior payoffs, and collective consumption grew faster than the economy. Public/ private standoffs were resolved against entrepreneurs. By the 1970s, prudential saturation set in, as public investment soared. Rising incomes, new goods, and falling prices shifted consumer preferences towards market provision, and crowded out the public sector. This shift supported investor capture of government, privatisation and de-regulation. Consumer expenditure increased, while prudential investment declined sharply. In consequence, Victorian-style public/private standoffs have emerged again, with prudential crises in pensions, education, health, communications, and transport. These will need to be resolved once again by means of political competition

The economy of obligation: incomplete contracts and the cost of the welfare state

Western governments typically pay out some 30 percent of GDP for social purposes. This is financed by taxation on a pay-as-you-go (PAYGO) basis. How efficient are these transfers, and can market or other mechanisms do it better? The problem arises since no individual stands alone. During the life cycle there are several periods of unavoidable dependency, in which there is no earning and little to bargain with: motherhood, infancy, childhood, education, illness, disability, unemployment, old age. The problem is how to transfer resources from ‘producers’ to ‘dependants’ over the life cycle. The market solution is for individuals to accumulate financial assets and to transfer them over the life cycle by means of long-term contracts with financial intermediaries

The Social Value of Dark Energy

Astrophysics is a social enterprise exemplified here by the Dark Energy Survey (DES) which completed its fieldwork in 2019 after 16 years of preparation and observation, while data analysis continues. Society funds astrophysics on a grand scale. For human capital and for governance the discipline draws on a self-governing "republic of science", while the funds were provided by philanthropists in the past, and by governments today. The benefits accrue initially to scientists themselves, in the form of a rewarding vocation. For the social benefit it is tempting to apply formal cost benefit analysis, but that approach ignores the option value of science and imposes questionable assumptions from welfare economics. Astrophysics generates some useful spinoffs, offers attractive careers, appeals to the popular imagination, speaks to metaphysical cravings and constitutes a good in itself. The rise of AI also suggests a role in exploring future habitats for intelligence and cognition.Comment: 33 pages, 1 figur

Self-interest, Sympathy and the Invisible Hand: From Adam Smith to Market Liberalism

Abstract Adam Smith rejected Mandeville's invisible-hand doctrine of 'private vices, publick benefits'. In The Theory of Moral Sentiments his model of the 'impartial spectator' is driven not by sympathy for other people, but by their approbation. The innate capacity for sympathy makes approbation credible. Approbation needs to be authenticated, and in Smith's model authentication relies on innate virtue, which is not realistic. An alternative model of 'regard' makes use of signalling and is more pragmatic. Modern versions of the invisible hand in rational choice theory and neoliberalism are shown to be radical departures from the ethical legacy of Enlightenment and utilitarian economics, and are not consistent with Adam Smith's own position. Since the 1980s, public policy in English-speaking countries has been guided by two doctrines. The first is selfishness (or more grandly, 'rational choice'), namely that people are motivated primarily by selfregarding interests which they pursue in market exchange. The second is that the primacy of self-regard is good. Adam Smith's 'invisible hand' ensures that market exchange is socially efficient. Wherever possible, therefore, production, distribution, and exchange should be transacted in markets, and should respond to prices. I call these doctrines 'market liberalism'. There is however a long-standing question as to whether Adam Smith's notion of the invisible hand can be reconciled with his ethical motive of 'sympathy' in the Theory of Moral Sentiments Despite their venerable lineage and normative centrality, we do not know whether the doctrines of self-interest and market efficiency are true. Their core premises are insecure. It has never been proven that they are always more efficient than other arrangements; it is not even easy to define what such efficiency would consist of. As for self-interest, it is either an a priori axiom, or a psychological speculation. In reality, choices are not always intended to maximise economic advantage. Financial motivations are often crowded out by intrinsic ones, such as obligation, compassion, and public spirit. As for aggregate efficiency, those who buy and sell for their own advantage have no incentive to seek it, and it has never been proven that efficiency happens by itself. The doctrines of selfishness and of market efficiency are sometimes presented as hard-nosed conceptions of immutable reality. It is supposedly not the business of economists to make mora

CHARLES FEINSTEIN (1932–2005), AND BRITISH HISTORICAL NATIONAL ACCOUNTS

The Meade and Stone approach to national accounting (first published for the UK in 1941) eventually provided the template for the United System of National Accounts. Feinstein’s historical national accounts for the UK developed out of this project and built on its earlier contributions. He was the foremost constructor of historical accounts in the UK, and shared with other national accounting pioneers a pragmatic approach and a bias against neo-classical general equilibrium. He made important contributions to growth accounting and the measurement of standards of living, and also left his mark as a teacher and as an academic leader. His commitment to racial equality in South Africa preceded his academic career, and continued after his formal retirement