Historically, critics of capitalism have had a great deal to say about the defects and social ills that afflict capitalist society and correspondingly little to say about how alternative institutional arrangements might solve these problems. One can only speculate about why this has been so. One reason might be a simple matter of priorities. Bertolt Brecht once said that when a man's house is on fire, one does not inquire too closely into alternative arrangements for shelter. The analogy between capitalism (...) and a burning house may seem overwrought today, but in the dark days of the Depression of the 1930s it probably seemed more apt. Another explanation for the scant attention paid to alternatives to capitalism has to do with both the factual and ideological beliefs of capitalism's critics. If one believes that the existing order would be destroyed by a mass movement, that new institutions would be constructed by the people in a democratic spirit, and that furthermore all of this would be a good thing, it would be unwise and counterproductive to try to spell out exactly where history is headed. After all, a genuine mass movement has little use for self-proclaimed prophets of history. Finally, men and women of modest intellectual pretensions might be humbled by the prospects of trying to spell out in any detail social institutions that should exist or might exist but are not as yet found anywhere in the world. (shrink)

Where economists previously viewed the market as arising from a ‘spontaneous order’, antithetical to design, they now design markets to achieve specific purposes. This paper reconstructs how this change in what markets are and can do came about and considers some consequences. Two decisive developments in economic theory are identified: first, Hurwicz’s view of institutions as mechanisms, which should be designed to align incentives with social goals; and second, the notion of marketplaces – consisting of infrastructure and algorithms – which (...) should be designed to exhibit stable properties. These developments have empowered economists to create marketplaces for specific purposes, by designing appropriate algorithms. I argue that this power to create marketplaces requires a shift in ethical reasoning, from whether markets should reach into certain spheres of life, to how market algorithms should be designed. I exemplify this shift, focusing on bias, and arguing that transparency should become a goal of market design. (shrink)

The paradox of Gandhi being treated as an ivory-tower idealist despite being one of the most successful political leaders of the twentieth century, can be traced to his using a method to understand social processes that is fundamentally different from the dominant tendency to reduce reality to an underlying system. The fact that his method did not fit into the ideological systems that dominated the twentieth century contributed to it being ignored. This paper seeks to revisit the Gandhian method by (...) first identifying the limitations of viewing democracies entirely in terms of systems. It then goes on to explore Gandhi's alternative view of reality as a mass of actions. It finally uses this philosophical method to understand a rather violent example of identity politics, namely the destruction of the Babri Masjid in the Indian town of Ayodhya. (shrink)

There are three intentions (aims) of this paper. First, to focus the attention of readers to three not so well known and least frequently quoted by economists of Mises’s books, namely his 1957 Theory and History: An Interpretation of Social and Economic Evolution, and two closely related The Ultimate Foundation of Economic Science: An Essay on Method (1962), and Epistemological Problems of Economics (1933/1960). The second aim is to outline Mises’s legacy, presented in the form of eleven dimensions of Mises’s (...) Intellectual Universe. The eleven dimensions of Mises’s system are: Economics as science, praxeology, and human action; Methodological dualism; Judgments of value and subjectivism; Individualism; Rationalism and human action; Consumer; Cooperation and competition; Thymology; Mathematics in economics; Predictions; and Historical analysis. Third, to present the main issues related to Mises’s concept of rationalism. There is no mention of Ludwig von Mises’s concept of rationality in a great number of books and papers dealing with the understanding of the rationality of human beings. The concept of rationality proposed by Ludwig von Mises is neglected by modern researchers and economists of different schools, but especially by mainstream economists. A good example of neglecting Mises’s ideas on rationality is the latest book by Nassim Taleb, Skin in the Game: Hidden Asymmetries in Daily Life. Although Taleb’s proposition of understanding rationality and irrationality is very close to the concept of Mises, he does not refer to Mises’s work at all. No single word on Mises in that book! (shrink)

This book offers a distinctive treatment of Hayek's ideas as a "research program". It presents a detailed account of aspects of Hayek's intellectual development and of problems that arise within his work, and then offers some broad suggestions as to ways in which the program initiated in his work might be developed further. The book discusses how Popper and Lakatos' ideas about "research programs" might be applied within political theory. There then follows a distinctive presentation of Hayek's intellectual development up (...) to The Road to Serfdom, together with critical engagement with his later ideas. The discussion draws on a full range of his writings, makes use of some neglected earlier work on social theory and law, and also draws on archival material. This book should appeal to anyone with an interest in Hayek's work, as well as to those with a concern for twentieth century intellectual history. (shrink)

I have been writing and publishing in economics for 50 years and much of my work has been debated and criticised. But I think that this is the first time that someone has honoured me by a full-scale article criticising an unpublished working paper. I am very grateful to Lynne Chester for bringing the questions I raise to a wider audience. The working paper that she criticizes went through several versions, of which the 12 July 2017 draft that Lynne downloaded (...) from the World Interdisciplinary Network for Institutional Research (WINIR) website is not the final version. In addition, the working paper has now expanded into a book entitled Is There a Future for Heterodox Economics? (Hodgson, 2019). Lynne's criticisms help me to attempt to make the text clearer and deal with some misunderstandings that have arisen... (shrink)