The Programming Approach And The Demise Of Economics: Volume II: Selected Testimonies On The Epistemological ’Overturning’ Of Economic Theory And Policy

484 Pages·2019·3.594 MB·English

by  Franco Archibugi

FRANCO ARCHIBUGI
THE PROGRAMMING
APPROACH AND
THE DEMISE
OF ECONOMICS
Volume II: Selected Testimonies on
the Epistemological ‘Overturning’
of Economic Theory and Policy
The Programming Approach and the Demise
of Economics
Franco Archibugi
The Programming
Approach and the
Demise of Economics
Volume II
Selected Testimonies
on the Epistemological ‘Overturning’
of Economic Theory and Policy
Franco Archibugi
Rome, Italy
ISBN 978-3-319-78059-7 ISBN 978-3-319-78060-3 (eBook)
https://doi.org/10.1007/978-3-319-78060-3
Library of Congress Control Number: 2018945553
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Preface
to the Second Volume of the Trilogy
on the Programming Approach
This is the second volume of a Trilogy of books concerning the
Programming approach, a totally different and alternative approach, with
respect to the traditional approach that is practised, with a continuous
sense of failure and guilt—in Economics—by most authors, who have
the ‘invisible hand’ as the basis of their discipline and who have also con-
stituted the history of the discipline.1
So, in this volume, I considered it useful and interesting to offer readers
a selection and synthesis of some authors, economists, and others from
other social sciences, (some well known, others less so), who—even not
achieving the same systematic clarity, advances and explicit vision of the
authors examined and relocated on the scene in Vol. I—deserve to be con-
sidered. This is a preparatory support, in some way, to that critical con-
science (without particular radical theoretical effects, but full of innovative
effects) of contemporary Economics thinking, which—even if acknowl-
edged as ‘mainstream’—would intend the adoption of the Programming
Approach.
In this sense, in this volume of this work (edited in the form of a
Trilogy), I have selected and gathered from the vast world of Economics
and social research, those testimonies which—in my opinion—have man-
ifested, in an interesting way, attention and arguments towards the over-
turning of the determinist into the programming approach, without yet
drawing from it any explicit and useful conclusions.
v
vi Franco Archibugi The Programming Approach and the Demise...
Testimonies Contrasting with ‘Mainstream’
Economics
It is a question of a selection of examples of critical scholars that oppose
the ‘positivist’ approach, in a new and brilliant way, often through a radi-
cal critique, drawing attention to, in any case, the insufficiencies of the
traditional approach, even if not completely aware of the contributions of
Frisch’s followers, and of the series of proposals from the scholars evoked
in Vol. I who have provided strong arguments for the concept of the
epistemological overturning, which is the main focus of this book.
It is my conviction that many of the economists taken into consider-
ation in this volume of this trilogy have perceived how the positivistic
approach has trapped economic thinking within a system of generic
a-prioristic postulates; and therefore within limited, debatable, concep-
tual and behavioural ‘rationalism’. A ‘rationalism’, furthermore, that
influences the same economists (and other social scientists of the time) by
the evolving habits, customs, uses and ‘modernities’ of their epoch. It is,
however, a ‘rationalism’ itself ‘evolutionist’ and ready at any moment to
be outdated, demanding to be permanently ‘scrapped’ and renewed.
In which direction? This is another question.
Since, in a simple vision of differentiated evolutive stages, we need to
arrange these stages chronologically, we must update what happened
before, and at the next stage, update again from the previous stage.
This determines a series of unparallel situations mutually influential,
but in different and asymmetric ways. The asymmetry is greater when
between different stages there are increasing interdependencies and forms
of communication which produce an integrative process among stages
that have anthropological and ideological characteristics.
This occurs in some directions with slow changes or developments—more
in the most advanced countries (economically but also in other cultural, tech-
nical, human/social), or anthropological-ideological- sociological- sensibility,
and less in later developed countries in the twentieth century, which nearly
disappeared in the early twenty-first century. There is an accompanying pro-
portionally parallel sequences of events in each country towards a minimum
standard unified model of progress, so as to facilitate an acceptable imperative
of management for planetary interests.
Franco Archibugi Preface to the Second Volume of the Trilogy on the vii
The Influence of Technical-Scientific Discovery
on Economic Development Policy
There are many factors in this trend. (1) Far from being universal, inde-
pendent of any geographical, religious, racial, environmental, linguistic,
limiting factor. (2) I do not believe that we can forget that economics,
when it first began (in the eighteenth century) as a reflection (or ‘science’,
or discipline) and when somebody looked to building a kind of rational
knowhow in the mind and capacities of the operators in the field of eco-
nomic activities (teachers, colleagues or students, as well as practical oper-
ators and actors in some sectors of the public service), the world was very
different in structure and thought, and the economic research was reflec-
tive of beliefs, values, desires and customs of the human world ‘thinking’
in respect to the natural world, inert and non-thinking of the epoch.
From the epoch when economics arose, the scientific approach to the
natural sciences was achieving very significant progress. Thus, economics
has been influenced by examples of research in the fields of the natural
sciences, and has been easily intended like that based on a situation where
economics was still ‘rough’ and less developed than in its modern form,
and where the available capital on the ‘market’2 (an essential factor of
development) was much more abundant in the private sector than in the
public sector. It was advantaged by pyramidal injustices of the older times
when property, possession and power were continuing to be legitimated
by extreme minorities of the populations.
The private initiative was much less complex, more efficient, and more
productive (the true k factor of the growth rate registered in the 1800s,
two or three centuries after an equilibrium without any growth had been
stabilised for two to three millennia in human history); it was easier and
more ‘productive’ than the public one, which still had not been studied,
measured and evaluated like the private one.
In such a way the modern developed in last century, constituting the
‘original sin’ of economics until today. And this has not helped the natu-
ral consistency trends of modern situations.
Rome, Italy Franco Archibugi
viii Franco Archibugi The Programming Approach and the Demise...
Notes to the Preface to the Second Volume of
the Trilogy
1. In spite of the dissent generated by more pragmatic economists and by
public opinion, less available to accepting the academic sophistry, but
nevertheless predominant (so called ‘mainstream’ economics).
2. This abstract concept of the ‘market’ (the result of the ‘negotiating’ of
goods in local squares in the Middle Ages) has today become almost a
‘metaphysical’ concept, mostly after the dozens of enquiries (by universi-
ties or study centres in the modern ‘free’ market economies of different
countries) on how the so-called ‘market prices’ are actually established in
reality. They revealed that around 80–90% of all prices, of each type and
nature (salaries, capital, goods, services, taxes, interest, public services,
etc.) are no longer ‘market prices’ (unless for sake of expression), but—in
the largely public economies, in the widespread structurally existent
monopolies and monopsonies—are prices fixed by sellers and producers
and so are considered ‘administrative’, vaguely public or under public
control.
Contents
1 The Programming Approach: As Epistemologically Based,
Futuristic Decision and ‘Rational Utopia’ 1
1.1 The Logical Foundations of the Decisional Models 1
1.2 The Epistemological Basis of Economics (According to
Ludwig von Mises) 3
1.2.1 Th e Activistic Basis of Knowledge 4
1.2.2 Th e Logical Structure of the Human Mind
and of History 6
1.3 Programming Versus Forecasting, the Crucial Point of
the Overturning Approach to the Future (According to
Jan Tinbergen) 10
1.4 The ‘Utopia’ Role as Requirement in Economic Theory
(Viewpoints by Bruno de Finetti) 15
1.4.1 R isk of Misleading Conceptualisation 17
1.4.2 C ritique of Over-Simplification in the Abuse
of the Language of Mathematics 19
1.5 E conomic Theory as ‘Fiction’ 20
1.5.1 ‘Four Bridges Towards Reality’ 23
1.5.2 An Impasse 23
1.5.3 Rationality or Time? 25
1.5.4 An ‘Interpretative’ Economic Theory
(According to Bell) 26
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x Franco Archibugi The Programming Approach and the Demise...
1.6 A Pragmatic ‘Realism’ as a Way Out from the Impasse 29
Bibliographical References to Chapter 1 (Vol. II) 34
2 The Programming Approach and the Old, Unresolved
Debate on ‘Decision Theory’ 35
2.1 The Traditional ‘Methodological’ Debate on Economic
Decision and Its Inconclusiveness 36
2.2 How the Descriptive Versus Normative Dichotomy Is
Raised? 36
2.2.1 Th e ‘Logical Confusion’ Concerning ‘Value-
free’ Judgements and ‘Scientific’ Propositions 38
2.2.2 Methodological Judgements Versus Value
Judgements (According to Ernest Nagel) 39
2.2.3 O thers Steady Attempts to Bypass
Controversial Terms (the Max Weber Trial) 43
2.2.4 Last Trial (by Myrdal) 45
2.3 The Descriptive and Normative Approach in Modern
‘Decision Theory’ 49
2.4 A New Trichotomy in Modern Decision Theory, Its
Inner Interactions (and Its Tribulations) 53
2.4.1 Th e Ambiguities of the Dichotomy Between
the ‘Descriptive’ and ‘Normative’ Approaches 54
2.4.2 A gain, the Illogicality of the ‘Realistic’
Validity of Behavioural Projection 60
2.5 Conclusions: The Common Pragmatic Bases of the
Prescriptive and Programming Approaches 63
Bibliographical References to Chapter 2 (Vol. II) 67
3 T he Programming Approach in the Collective Decision
and ‘Action-Centred’ Analysis 69
3.1 Programming and the Knowledge: Action Nexus 69
3.1.1 ‘Positive’ Knowledge and ‘Programming’
Knowledge 70
3.1.2 Th e Damage Done by the ‘Positivist’
Approach 71