Marcela Miozzo and Vivien Walsh
- Published in print:
- 2006
- Published Online:
- May 2007
- ISBN:
- 9780199259236
- eISBN:
- 9780191717901
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199259236.003.0001
- Subject:
- Economics and Finance, Economic Systems
This chapter developes on the relation between innovation and economic development, drawing on the work of Schumpeter and Marx. The chapter is organized as follows. The first section discusses the ...
More
This chapter developes on the relation between innovation and economic development, drawing on the work of Schumpeter and Marx. The chapter is organized as follows. The first section discusses the limitations of mainstream economics in dealing with innovation. The second section presents an alternative view of the relation between innovation and economic development. The third section discusses long-term fluctuations in economic development. The fourth section examines the limitations of the most popular indices of competitiveness. The final section explores the concept of competitiveness.Less
This chapter developes on the relation between innovation and economic development, drawing on the work of Schumpeter and Marx. The chapter is organized as follows. The first section discusses the limitations of mainstream economics in dealing with innovation. The second section presents an alternative view of the relation between innovation and economic development. The third section discusses long-term fluctuations in economic development. The fourth section examines the limitations of the most popular indices of competitiveness. The final section explores the concept of competitiveness.
Bart Nooteboom
- Published in print:
- 2001
- Published Online:
- October 2011
- ISBN:
- 9780199241002
- eISBN:
- 9780191696886
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199241002.003.0003
- Subject:
- Business and Management, Innovation, Organization Studies
Economics literature has mostly treated learning only in a very limited sense of increasing efficiency on the basis of experience or obtaining information from others. Most mainstream economics is ...
More
Economics literature has mostly treated learning only in a very limited sense of increasing efficiency on the basis of experience or obtaining information from others. Most mainstream economics is unfit to deal with the issue of learning in the sense of innovation and discovery. More useful are non-mainstream or non-standard branches of economics: Austrian/Schumpeterian economics, the resource-competence view of firms, evolutionary economics, and institutional economics. This chapter focuses on the first two.Less
Economics literature has mostly treated learning only in a very limited sense of increasing efficiency on the basis of experience or obtaining information from others. Most mainstream economics is unfit to deal with the issue of learning in the sense of innovation and discovery. More useful are non-mainstream or non-standard branches of economics: Austrian/Schumpeterian economics, the resource-competence view of firms, evolutionary economics, and institutional economics. This chapter focuses on the first two.
Ewald Engelen, Ismail Ertürk, Julie Froud, Sukhdev Johal, Adam Leaver, Michael Moran, Adriana Nilsson, and Karel Williams
- Published in print:
- 2011
- Published Online:
- January 2012
- ISBN:
- 9780199589081
- eISBN:
- 9780191731150
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199589081.003.0005
- Subject:
- Business and Management, Finance, Accounting, and Banking, Political Economy
This chapter is concerned with the question how banking could generate (unsustainable) returns of 15–25 per cent on equity before the crisis? Our answer is that in wholesale banking, small return per ...
More
This chapter is concerned with the question how banking could generate (unsustainable) returns of 15–25 per cent on equity before the crisis? Our answer is that in wholesale banking, small return per asset were beefed up through leverage while bonuses and profits were multiplied through the construction of ever more fragile latticeworks that were the result of bricolage and regulatory arbitrage. In retail banking, profitability was much less impressive and resulted mainly from cross selling and ramping up of transactions. These transformations were related to the emergence of a banking business model that was driven by shareholder value. A further aim of this chapter is to show how mainstream economics failed to understand banking and how the heterodox economists that got it right were right for the wrong reasons. The message is that finance and banking were not so much out of control as beyond control.Less
This chapter is concerned with the question how banking could generate (unsustainable) returns of 15–25 per cent on equity before the crisis? Our answer is that in wholesale banking, small return per asset were beefed up through leverage while bonuses and profits were multiplied through the construction of ever more fragile latticeworks that were the result of bricolage and regulatory arbitrage. In retail banking, profitability was much less impressive and resulted mainly from cross selling and ramping up of transactions. These transformations were related to the emergence of a banking business model that was driven by shareholder value. A further aim of this chapter is to show how mainstream economics failed to understand banking and how the heterodox economists that got it right were right for the wrong reasons. The message is that finance and banking were not so much out of control as beyond control.
Mia de Kuijper
- Published in print:
- 2009
- Published Online:
- February 2010
- ISBN:
- 9780195171631
- eISBN:
- 9780199871353
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780195171631.003.0005
- Subject:
- Economics and Finance, Macro- and Monetary Economics
The second face of transparency, namely the inevitable trend toward the rise in the interdependence of decision making that comes with perfect information, is causing old economic models to fail. ...
More
The second face of transparency, namely the inevitable trend toward the rise in the interdependence of decision making that comes with perfect information, is causing old economic models to fail. Perfect information does not lead to perfect markets, as many real-world observations and practical examples can confirm. In order to make sense of a pile of conflicting theories and observations, the author realized that she had to start with investigating what the actual consequences of perfect information might be. Why and how, e.g., could extraordinary profits be feasible even in the face of perfect information? In so doing, the book really asked whether it was economic theory itself that needed to be rethought. This chapter explains that there is indeed a serious flaw at the heart of mainstream classical economics. Economic theory does need to be rethought in the light of perfect information and the interdependent decision making that it causes.Less
The second face of transparency, namely the inevitable trend toward the rise in the interdependence of decision making that comes with perfect information, is causing old economic models to fail. Perfect information does not lead to perfect markets, as many real-world observations and practical examples can confirm. In order to make sense of a pile of conflicting theories and observations, the author realized that she had to start with investigating what the actual consequences of perfect information might be. Why and how, e.g., could extraordinary profits be feasible even in the face of perfect information? In so doing, the book really asked whether it was economic theory itself that needed to be rethought. This chapter explains that there is indeed a serious flaw at the heart of mainstream classical economics. Economic theory does need to be rethought in the light of perfect information and the interdependent decision making that it causes.
William B. Bonvillian and Peter L. Singer
- Published in print:
- 2018
- Published Online:
- September 2018
- ISBN:
- 9780262037037
- eISBN:
- 9780262343398
- Item type:
- chapter
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262037037.003.0004
- Subject:
- Political Science, Public Policy
This chapter examines manufacturing in the early foundations of economics before moving into a relatively short, but admittedly complex, application of both economics and trade theory to the ...
More
This chapter examines manufacturing in the early foundations of economics before moving into a relatively short, but admittedly complex, application of both economics and trade theory to the manufacturing sector. The review focuses first on growth theory, including New Growth Theory and its efforts to better model growth. Because these models remain imperfect, manufacturing's role is still not adequately understood. The discussion then turns to trade theory. New Trade Theory has led to a focus on the innovative and competitive capabilities of firms; the weaknesses of smaller firms in developing innovation capability have affected the manufacturing sector overall. However, these developments in growth, productivity, and trade theory and their application to manufacturing have been largely missed by mainstream economics. The analysis then turns to a discussion of some of the shortcomings of mainstream economics as it has applied to manufacturing.Less
This chapter examines manufacturing in the early foundations of economics before moving into a relatively short, but admittedly complex, application of both economics and trade theory to the manufacturing sector. The review focuses first on growth theory, including New Growth Theory and its efforts to better model growth. Because these models remain imperfect, manufacturing's role is still not adequately understood. The discussion then turns to trade theory. New Trade Theory has led to a focus on the innovative and competitive capabilities of firms; the weaknesses of smaller firms in developing innovation capability have affected the manufacturing sector overall. However, these developments in growth, productivity, and trade theory and their application to manufacturing have been largely missed by mainstream economics. The analysis then turns to a discussion of some of the shortcomings of mainstream economics as it has applied to manufacturing.
Bruce Caldwell
- Published in print:
- 2003
- Published Online:
- February 2013
- ISBN:
- 9780226091914
- eISBN:
- 9780226091921
- Item type:
- book
- Publisher:
- University of Chicago Press
- DOI:
- 10.7208/chicago/9780226091921.001.0001
- Subject:
- Economics and Finance, Economic History
Friedrich A. Hayek is regarded as one of the preeminent economic theorists of the twentieth century, as much for his work outside of economics as for his work within it. During a career spanning ...
More
Friedrich A. Hayek is regarded as one of the preeminent economic theorists of the twentieth century, as much for his work outside of economics as for his work within it. During a career spanning several decades, he made contributions in fields as diverse as psychology, political philosophy, the history of ideas, and the methodology of the social sciences. This book offers us an intellectual biography of this pivotal social theorist. The book begins by providing the necessary background for understanding Hayek's thought, tracing the emergence, in fin-de-siècle Vienna, of the Austrian school of economics—a distinctive analysis forged in the midst of contending schools of thought. The second part of the book follows the path by which Hayek, beginning from the standard Austrian assumptions, gradually developed his unique perspective on not only economics but a broad range of social phenomena. The third part offers both an assessment of Hayek's arguments and, in an epilogue, an estimation of how Hayek's insights can help us to clarify and reexamine changes in the field of economics during the twentieth century. As Hayek's ideas matured, he became increasingly critical of developments within mainstream economics: his works grew increasingly contrarian and evolved in striking—and sometimes seemingly contradictory—ways. The book's analysis situates Hayek in a broader intellectual context, unpacking the often difficult turns in his thinking, and showing how his economic ideas came to inform his ideas on the other social sciences.Less
Friedrich A. Hayek is regarded as one of the preeminent economic theorists of the twentieth century, as much for his work outside of economics as for his work within it. During a career spanning several decades, he made contributions in fields as diverse as psychology, political philosophy, the history of ideas, and the methodology of the social sciences. This book offers us an intellectual biography of this pivotal social theorist. The book begins by providing the necessary background for understanding Hayek's thought, tracing the emergence, in fin-de-siècle Vienna, of the Austrian school of economics—a distinctive analysis forged in the midst of contending schools of thought. The second part of the book follows the path by which Hayek, beginning from the standard Austrian assumptions, gradually developed his unique perspective on not only economics but a broad range of social phenomena. The third part offers both an assessment of Hayek's arguments and, in an epilogue, an estimation of how Hayek's insights can help us to clarify and reexamine changes in the field of economics during the twentieth century. As Hayek's ideas matured, he became increasingly critical of developments within mainstream economics: his works grew increasingly contrarian and evolved in striking—and sometimes seemingly contradictory—ways. The book's analysis situates Hayek in a broader intellectual context, unpacking the often difficult turns in his thinking, and showing how his economic ideas came to inform his ideas on the other social sciences.
Willian B. Bonvillian and Peter L. Singer
- Published in print:
- 2018
- Published Online:
- September 2018
- ISBN:
- 9780262037037
- eISBN:
- 9780262343398
- Item type:
- book
- Publisher:
- The MIT Press
- DOI:
- 10.7551/mitpress/9780262037037.001.0001
- Subject:
- Political Science, Public Policy
The United States lost almost one-third of its manufacturing jobs between 2000 and 2010. As higher-paying manufacturing jobs are replaced by lower-paying service jobs, income inequality has been ...
More
The United States lost almost one-third of its manufacturing jobs between 2000 and 2010. As higher-paying manufacturing jobs are replaced by lower-paying service jobs, income inequality has been approaching third world levels. In particular, between 1990 and 2013, the median income of men without high school diplomas fell by an astonishing 20 percent, and that of men with high school diplomas fell by a painful 13 percent. Innovation has been left largely to software and IT startups, and increasingly U.S. firms operate on a system of “innovate here/produce there,” leaving the manufacturing sector behind. This book explores how to rethink innovation and revitalize America's declining manufacturing sector. It argues that advanced manufacturing, which employs such innovative technologies as 3-D printing, advanced material, photonics, and robotics in the production process, is the key. The book discusses transformative new production paradigms that could drive up efficiency and drive down costs. It describes the new processes and business models that must accompany them, and explores alternative funding methods for startups that must manufacture. The book examines the varied attitudes of mainstream economics toward manufacturing, the post-Great Recession policy focus on advanced manufacturing, and lessons from the new advanced manufacturing institutes. Finally, it considers the problem of “startup scale-up,” possible new models for training workers, and the role of manufacturing in addressing “secular stagnation” in innovation, growth, the middle classes, productivity rates, and related investment.Less
The United States lost almost one-third of its manufacturing jobs between 2000 and 2010. As higher-paying manufacturing jobs are replaced by lower-paying service jobs, income inequality has been approaching third world levels. In particular, between 1990 and 2013, the median income of men without high school diplomas fell by an astonishing 20 percent, and that of men with high school diplomas fell by a painful 13 percent. Innovation has been left largely to software and IT startups, and increasingly U.S. firms operate on a system of “innovate here/produce there,” leaving the manufacturing sector behind. This book explores how to rethink innovation and revitalize America's declining manufacturing sector. It argues that advanced manufacturing, which employs such innovative technologies as 3-D printing, advanced material, photonics, and robotics in the production process, is the key. The book discusses transformative new production paradigms that could drive up efficiency and drive down costs. It describes the new processes and business models that must accompany them, and explores alternative funding methods for startups that must manufacture. The book examines the varied attitudes of mainstream economics toward manufacturing, the post-Great Recession policy focus on advanced manufacturing, and lessons from the new advanced manufacturing institutes. Finally, it considers the problem of “startup scale-up,” possible new models for training workers, and the role of manufacturing in addressing “secular stagnation” in innovation, growth, the middle classes, productivity rates, and related investment.
Grzegorz W. Kolodko
- Published in print:
- 2012
- Published Online:
- November 2015
- ISBN:
- 9780231150699
- eISBN:
- 9780231521567
- Item type:
- chapter
- Publisher:
- Columbia University Press
- DOI:
- 10.7312/columbia/9780231150699.003.0006
- Subject:
- Economics and Finance, International
This chapter talks about the concept of “neoliberalism,” which some authors erroneously identify with “classical mainstream economics,” and its relationship with the idea of “social market economy.” ...
More
This chapter talks about the concept of “neoliberalism,” which some authors erroneously identify with “classical mainstream economics,” and its relationship with the idea of “social market economy.” The neoliberal trend in economics maintains the supremacy of the free market and private enterprise over the state and social policy, and will soon lead to neoliberal policies that limit the role of the state in the economy. Neoliberalism in itself is seen not as a utopia, but as an effective method of protecting group interests at the cost of the interests of others. The chapter explains how economic liberalization was incorrectly presented as identical to the shift to a market economy, and that it is the combination of government with the market that will continue to change the world. The key element here is the coexistence in time and space of globalization and neoliberalism.Less
This chapter talks about the concept of “neoliberalism,” which some authors erroneously identify with “classical mainstream economics,” and its relationship with the idea of “social market economy.” The neoliberal trend in economics maintains the supremacy of the free market and private enterprise over the state and social policy, and will soon lead to neoliberal policies that limit the role of the state in the economy. Neoliberalism in itself is seen not as a utopia, but as an effective method of protecting group interests at the cost of the interests of others. The chapter explains how economic liberalization was incorrectly presented as identical to the shift to a market economy, and that it is the combination of government with the market that will continue to change the world. The key element here is the coexistence in time and space of globalization and neoliberalism.
Peter A. Corning
- Published in print:
- 2005
- Published Online:
- February 2013
- ISBN:
- 9780226116136
- eISBN:
- 9780226116334
- Item type:
- chapter
- Publisher:
- University of Chicago Press
- DOI:
- 10.7208/chicago/9780226116334.003.0011
- Subject:
- Biology, Evolutionary Biology / Genetics
This chapter argues that bioeconomics challenges the theoretical foundations of mainstream economics. It explains that bioeconomics is based on the ground-zero premise of life sciences which states ...
More
This chapter argues that bioeconomics challenges the theoretical foundations of mainstream economics. It explains that bioeconomics is based on the ground-zero premise of life sciences which states that survival and reproduction constitute the basic, continuing, inescapable problem for all living organisms, and argues that economic performance should be measured in these terms and not in relation to economic growth or other conventional economic measures. In effect, bioeconomics provides an alternative set of account books for assessing the performance of an economy, including especially the outcomes.Less
This chapter argues that bioeconomics challenges the theoretical foundations of mainstream economics. It explains that bioeconomics is based on the ground-zero premise of life sciences which states that survival and reproduction constitute the basic, continuing, inescapable problem for all living organisms, and argues that economic performance should be measured in these terms and not in relation to economic growth or other conventional economic measures. In effect, bioeconomics provides an alternative set of account books for assessing the performance of an economy, including especially the outcomes.
Daniel K. Finn
- Published in print:
- 2014
- Published Online:
- April 2014
- ISBN:
- 9780199370993
- eISBN:
- 9780199374212
- Item type:
- chapter
- Publisher:
- Oxford University Press
- DOI:
- 10.1093/acprof:oso/9780199370993.003.0010
- Subject:
- Religion, Religion and Society, Religious Studies
This chapter employs the insights of critical realist sociology to develop an understanding of the market as a social structure. In mainstream economics, harms caused to distant others are understood ...
More
This chapter employs the insights of critical realist sociology to develop an understanding of the market as a social structure. In mainstream economics, harms caused to distant others are understood as unintended consequences generated by an abstract market whose internal workings go unexamined. A critical realist understanding of the market sees it as a long chain of relationships among preexisting social positions: consumer/clerk, clerk/department store, store/wholesaler, wholesaler/Asian factory owner, owner/manager, manager/seamstress, etc. These relationships among positions have causal impact on persons entering into those positions by generating enablements, restrictions, and incentives. Prices are one of the primary ways in which the social structure of the market exercises coercive power. In most cases, that coercion plays a positive role in channelling market behavior toward more efficient outcomes. But when very fundamental interests of the poor and powerless are threatened, economic compulsion occurs, this coercive power becomes morally objectionable, and the character of the market needs to change.Less
This chapter employs the insights of critical realist sociology to develop an understanding of the market as a social structure. In mainstream economics, harms caused to distant others are understood as unintended consequences generated by an abstract market whose internal workings go unexamined. A critical realist understanding of the market sees it as a long chain of relationships among preexisting social positions: consumer/clerk, clerk/department store, store/wholesaler, wholesaler/Asian factory owner, owner/manager, manager/seamstress, etc. These relationships among positions have causal impact on persons entering into those positions by generating enablements, restrictions, and incentives. Prices are one of the primary ways in which the social structure of the market exercises coercive power. In most cases, that coercion plays a positive role in channelling market behavior toward more efficient outcomes. But when very fundamental interests of the poor and powerless are threatened, economic compulsion occurs, this coercive power becomes morally objectionable, and the character of the market needs to change.
