economic essays with some blanks quastions ( REVIEW _ MIDTERM)

451_lecture_3_.pdf

Home >Business & Finance homework help >Economics homework help >economic essays with some blanks quastions ( REVIEW _ MIDTERM)

Institutional Economic Theory

Economics 451

University of Missouri-Kansas City

Knowledge Foundational Approach

Building Blocks Continuous and unidirectional Science as SCIENCE

Pragmatic/Institutional Approach Peircian Cable Cumulative but not unidirectional Evolutionary Process of Inquiry

Inquiry Behaving - emerge out of problematic situation

Valuation What is a situation? What is knowledge – terminus of inquiry

•  How do we acquire it? •  How many teeth in the mouth of a horse? •  Clarence Darrow story. •  Knowledge and Action-- inseparable •  Nature of Theory and practice – properly done also inseparable

• Evolutionary Process

• Darwin -- Importance of ocean islands is that it reduces confusion of task to simpler proposition – assumed marooned-

•  consider this in relation to the analysis of the island civilizations examined by Diamond • evidence of past connection with nearest continent

• Finches on the Galapagos – had great variety of beaks – nowhere but on the islands – must have evolved there.

• The Grand synthesis •  Evolution by natural selection •  Genetics

Knowing–Doing–Valuing –>Behavior

From Veblen - Why is Economics Not an Evolutionary Science The reason for the Austrian failure seems to lie in a faulty conception of human nature, -- faulty for the present purpose, however adequate it may be for any other. In all the received formulations of economic theory, whether at the hands of English economists or those of the Continent, the human material with which the inquiry is concerned is conceived in hedonistic terms; that is to say, in terms of a passive and substantially inert and immutably given human nature. The psychological and anthropological preconceptions of the economists have been those which were accepted by the psychological and social sciences some generations ago. The hedonistic conception of man is that of a lightning calculator of pleasures and pains who oscillates like a homogeneous globule of desire of happiness under the impulse of stimuli that shift him about the area, but leave him intact. He has neither antecedent nor consequent. He is an isolated definitive human datum, in stable equilibrium except for the buffets of the impinging forces that displace him in one direction or another. Self-imposed in elemental space, he spins symmetrically about his own spiritual axis until the parallelogram of forces bears down upon him, whereupon he follows the line of the resultant. When the force of the impact is spent, he comes to rest, a self-contained globule of desire as before.

The activity is itself the substantial fact of the process, and the desires under whose guidance the action takes place are circumstances of temperament which determine the specific direction in which the activity will unfold itself in the given case. These circumstances of temperament are ultimate and definitive for the individual who acts under them, so far as regards his attitude as agent in the particular action in which he is engaged. But, in the view of the science, they are elements of the existing frame of mind of the agent, and are the outcome of his antecedents and his life up to the point at which he stands. They are the products of his hereditary traits and his past experience, cumulatively wrought out under a given body of traditions conventionalities, and material circumstances; and they afford the point of departure for the next step in the process.

The economic life history of the individual is a cumulative process of adaptation of means to ends that cumulatively change as the process goes on, both the agent and his environment being at any point the outcome of the last process. His methods of life today are enforced upon him by his habits of life carried over from yesterday and by the circumstances left as the mechanical residue of the life of yesterday.

But what does all this signify? If we are getting restless under the taxonomy of a monocotyledonous wage doctrine and a cryptogamic theory of interest, with involute, loculicidal, tomentous and moniliform variants, what is the cytoplasm, centrosome, or karyokinetic process to which we may turn, and in which we may find surcease from the metaphysics of normality and controlling principles? What are we going to do about it? The question is rather, What are we doing about it? There is the economic life process still in great measure awaiting theoretical formulation. The active material in which the economic process goes on is the human material of the industrial community. For the purpose of economic science the process of cumulative change that is to be accounted for is the sequence of change in the methods of doing things, -- the methods of dealing with the material means of life.

Taxonomy the science of classification, esp. in relation to principles or laws Monocotyledon ‑ a plant that produces seed with only one cotyledon and by endogenous growth cotyledon ‑ the primary leaf of the embryo of plants loculicidal ‑ dissect longitudinally so as to bisect each loculus loculus ‑ a receptacle, coffin, recess in an ancient tomb or catacomb. involute ‑ curled inwardly, spirally, like a sea shell evolute ‑ uncurled, unfolding Cryptogamic ‑ an old division of plants comprising those with out true flowers or seeds, as ferns, mosses, thallophytes tomentous covered with densely matted hair moniliform ‑ jointed at regular intervals so as to resemble a string of beads ‑‑ like some insects cytoplasm ‑ the living substance or protoplasm of a cell, exclusive of the nucleus. centrosome ‑ minute protoplasmic body regarded as the active center of cell division karyokinetic ‑ the series of active changes that take place when the nucleus of a living cell is in the process of division, combining, resulting in motion

Teleology – primacy of – working toward an end.

Types of Teleological “Systems” a. Telenomic Processes - Development (individual development – ontogeny --life cycle). Guided by a program existence of some end point which is foreseen in regulating development. If breed like specie, get like offspring. b. Telematic Processes -- Especially related to physical objects – a definite end is reached as a result of physical laws. But no goal seeking is involved. A river is inexorably flowing toward a river and to a sea. c. Adapted Systems -- adaptive & evolutionary – not end-directed, e.g., Heart, kidneys -- evolved -- A major achievement of Darwin is to have shown that these evolved by natural selection d. Cosmic teleology -- all things are guided toward a specific end—no, or almost no, scientist accepts this view

Behavior – Human Nature

Standard Approach Rational Maximizer

Institutional Approach Control of Perception

Behavior Theory – The nature of Human Nature A valid way of thinking about economics derives from a valid conception of human nature. What constitutes a valid conception of human nature? Rationality – irrationality – what constitutes these Economic Man and the Standard Perspective Human Nature – what everybody thinks

• human nature is such that . . . . . • It is only human nature to . . . . . • You can’t change human nature . . . .

The traditional view – assumptions about human behavior • hedonism • lack of evolution • rationality – in the form of economic man – calculator of pleasure and pain • determined or shaped by motives – profit motive

• The contemporary-- traditional view

Human nature, at bottom, is based on self-interest and greed. Richard Posner has stated the position in its most stark form. Suppose we were to give humans an acid bath. What would be left? Greed and self-interest is Posner’s reply. What can we make of this •  one reaction may be to dismiss it as simplistic nonsense not deserving of attention • Another possibility is understand that significant numbers of people, including many social scientists (economists especially) agree with Posner, so a more complete response is called for.

Veblen’s synthesis

•  Evolution by natural selection

•  Concept of Culture – anthropology

Veblen’s point of view – cumulative causation – instincts –

habits

Where to start – a genuine inquiry proceeds with some antecedent presumption and facts.

Control theory – A use later on in consumption theory

Veblen on Instincts

Veblen -- The Instinct of Workmanship

Not Tropismatic

–

Functional Workmanship Ownership irrational Progressive Parental Bent Predation Past -binding Instrumental Idle Curiosity Vested Interest Ceremonial Technological

Institutional View – assumptions about human nature/behavior

• humans have a natural (biological) existence

• nature of the species

• genetic structure etc – relationship of head and hands

• human reproduction is bi-sexual – requiring two genders

• human infants require physiological care for an extended period in the early stages of life (unlike fish for example and many other species)

• human children, without the production of which there would be no more humans, usually are nurtured within a group of other humans (family, tribe, community etc.) for an extended period , often several years.

Assertion – hypothesis – proposition -- Most people adopt the cultural habits and behaviors of the group they associate with, especially early in life, e.g., most children adopt the religion, language, social customs, etc of their parents, family, community. Language contains cultural relationships – conceptualizations, -- cognitions If all behavior is traced to self-interest, by someone saying that all behavior is self-interest, i.e., I gave money to my mother because I felt guilty, therefore it was for my own self-interest, not hers, that the money exchanged, or other e.g., ad infinitium

• Primacy of individuality – start with the “basic nature of man” to explain the antics of man • Primacy of culture – start with the “particulars” of a culture • Humanness is unique in nature and cannot be explained by biology. • Each generation is different, man is a function of its inputs, programming.

• Even a super genetic race could not resolve its tax problems in a maternity ward. (Dewey on adult/child response to problems)

The Concept of Culture – What is a culture ‑ how has the concept evolved Society– is the organized aggregate of individuals who follow a given way of life. Culture – is a way of life Civilization – used in various languages – has been confusing Civility – to civilize Cultivation– Neolithic civilization From Germany – used in modern sense by Gustov Klemm in 1843 From whom Tylor got it and introduced it into English in 1871 Voltaire put aside King lists, dynasties and battles and sought to locate what is essential in history, mainly culture—as it manifests itself in customs, beliefs and forms of government. Its absence helps explain deficiencies in social theory Counters the view that social conditions evolve due to external forces cannot explain changes in society.

Leslie White, The Science of Culture

White writes, "Man is unique: he is the only living species that has a culture. By culture we mean an extrasomatic, temporal continuum of things and events dependent upon symboling. Specifically and concretely, culture consists of tools, implements, utensils, clothing, ornaments, customs, institutions, beliefs, rituals, games, works of art, language, etc. All peoples in all times and places have possessed culture; no other species has or has had culture. In the course of the evolution of primates man appeared when the ability to symbol had been developed and become capable of expression. We thus define man in terms of the ability to symbol and the consequent ability to produce culture."

White's definition clearly is a tongue twister. Yet the terms once defined do clarify the concept of culture.

The Extrasomatic Character of Culture White discusses the "extrasomatic" character of culture using the baby as illustrative of the process of "acculturation." Soma" is the Greek term for body. Thus somatic is of or relating to the body; physical or corporal. As such "extrasomatic" means apart from or beyond the physical body. The child is born without culture. It has the capacity to speak, to belief, etc. But the language which it will speak and the beliefs which it will hold to be either sacred or profane is a learned condition. These are transmitted to the child by adults. Still another example ;is the transmission of traits from one isolated culture to another. The contacts of Europe with non-Europeans during the age of discovery. Before that, again with respect to the Europeans, was the transmission of the culture of the East to the West following the contact of the Polos with the Khans of China. To future emphasize the nature of the extrasomatic as-sumption regarding culture White stresses the fact that the English language does not exist independent of those who speak it or listen to it. Yet we treat it as if it had a life of its own independent of those who use it.

Culture as a Nontemporal System:

It is possible to view humankind as a whole as a nontemporal system. That is there is a collection of conditions which in their entirety constitute the culture of humankind or the culture of the sub‑group. The pattern when identified with all humankind is "culture." When the patterns of a specific group are identified it is referred to as "a culture.“ As a final point, obviously even within the pattern of a group there are sub‑cultures. The most evident are those of caste, class and race. "

Note that the concept assumes the existence of a set of conditions or a set of patterns which transcends the individual or any group of individuals. It is an assumption that "cultural patterns" in essence "have a life of their own.“ It requires the active agent of a human being to "set down" the symbols or to transmit and/or receive the symbols. The point is that the "name identification" of the individual is not critical to the transmission process. "Man" in its generic sense has a number of characteristics which qualify him for culture. • Erect posture. • An opposable thumb. • Stereoscopic, chromatic vision. • Gregariousness. • The ability to symbol.

Only a slight difference in the brain makes the difference between being just able to carrying on the symbolic process and not being able to. Symboling ability is illustrated in the capacity of the species to assign a religious significance to water as holy water. A second example is the ability of human kind to trace out extended family relationships.

White divides the components of culture into four categories: ideological, sociological, sentimental or attitudinal, and technological. • The ideological sector: These are the beliefs of the tribe. They extend from the belief that the world is flat to the idea that process is central to the history of human kind, to the idea that symboling is a central aspect of human existance. Even the discussion of the symboling process is dependent upon symboling.

• The sociological component: These are the customs, institutions, rules and patterns of interpersonal behavior. Included are marriage patterns, behavior toward relatives, behavior toward those with whom you work and behavior with strangers.

• Sentiments: The loves and the hates, from relatives to inanimate objects.

• Technology: White does not accept that human kind is the unique tool maker. He rightly points out that other animals not only use tools but invent tools. That which he insists separates the species homo sapien from the rest is "The use of tools in the human species is, on th whole, a cumulative and progressive process; it is this that distinquishes neolitic from paleolithic cultures, and the Age of Coal and Steel from the Middle ages. In the human tool process, one generation may begin where the preceding generation left off."

Technology:

Of the four mentioned categories of culture‑‑ the technological is that which is most basic. White writes: "The technological basis of cultural systems is rather easily demonstrated. All living organisms can maintain themselves as individuals and perpetuate themselves as species only if a certain minimum adjustment to the external world is achieved and maintained. There must be food, protection from the elements, and defense from enemies. These life‑sustaining, life‑perpetuating processes are technological in a broad, but valid, sense; i.e., they are carried on by material, mechanical, biophysical, and biochemical means."

White continues, "It is fairly obvious that the social organization of a people is not only dependent upon their technology but is determined to a great extent, if now wholly, by it. both in form and content. As a matter of fact, a social system might well be defined as the way in which a society makes use of its particular technology in the various life‑sustaining processes: subsistence, protection from the elements, defense from enemies, combating disease, etc.... A hunting people will have one type of social organization as a consequence of this kind of activity, i.e., the use of certain technological implements; an agricultural, pastoral, or industrial people will have another cast to its social system."

The influence of the technology upon the social organization of a particular culture is expressed in two ways. There is the direct effect of the technological instruments upon the behavior of human organisms. Second on the social level the instruments relate to one another in a manner designed to make an integrated coherent, social system possible.

Implications of Concept of Culture for Social Analysis The absence of the concept of culture thwarted the efforts of earlier scholars like Locke, Hume and Rousseau to account for the existence of common activity patterns among societies. Concept of culture is revolutionary because it resolves, at long last, the mystery of humanness, thus completing the secular revolution begun in early times. The concept does three things: • it squares with Darwinism‑ group elaboration & transmission of culture to other members of the group and new generations • it explains diversity of human societies that is greater than the individual differences

• it explains the amazing stability and persistence of this diversity ‑ imposition of sanctions Mores principle Is it just that the Zuni Indians of New Mexico have one set of symbols and the alluts of Alaska another and that is all there is to it. This is the concept of cultural relativism, or so‑called moral agnosticism, nihilism

Real vs Ideal Culture

Standards of behavior vs real behavior B. Malinaskwi Trobriand Islanders ‑ incest taboo‑ they show horror at it and seek ways to thwart supernatural punishment. Trobrinaders ‑ spirit conception of offspring ‑ matrilineal, mothers brother has important social position and it would be subversive for father to be biologically connected.

Forces in Culture: Creative—Permissive—Restrictive