Prelude to Political Economy: A Study of the Social and Political Foundations of Economics
Mainstream economics was founded on many strong assumptions. Institutions and politics were treated as immaterial, government as exogenous, social norms as epiphenomena. As the horizons of economic inquiry have broadened, these assumptions have become hindrance rather than aid. If we want to understand why some economies succeed and some fail, why some governments are effective and others not, why some communities prosper while others stagnate, it is essential to view economics as embedded in politics and society. This is a study of this embeddedness; it argues for an inclusive approach to institutions and the state. Modern economics recognizes that individuals' pursuitof their own selfish ends can result in socially suboptimal outcomes - the "Prisoners Dilemma" being the stark example. It has been suggested that what we need in such an eventuality is third-party intervention, which can take the form of imposing punishment on players. Kaushik Basu objects to this method of wishing third parties out of thin air.
Other editions - View all
Prelude to Political Economy: A Study of the Social and Political ...
Limited preview - 2000
actions actually advice adviser agent allow analysis answer approach argued argument assume assumption behavior beliefs better called Chapter choice choose clear concept consider contracts course definition depends described determinism Dilemma discussed economics economists effect enforce equilibrium example existence expect explain fact follows formal freedom function give given happens Hence human idea important individuals influence instance institutions interesting kind knowledge matter maximize means moral move Nash equilibrium natural never norms Note occurs once outcome payoff person play player political positive possible preference principle problem question rationality reason relation restricted result rules seems sense simply social social norms society speech standard statement strategy Suppose tell theory tion trade true turn units utilitarianism utility violate welfare White write