Late Neoclassical Economics: The restoration of theoretical humanism in contemporary economic theory

219 Pages·2016·1.53 MB·English

by  Yahya M. Madra

Late Neoclassical Economics
Several contemporary economic theories revolve around different concepts: market
failures, institutions, transaction costs, information asymmetries, motivational
diversity, cognitive limitations, strategic behaviors, and evolutionary stability.
In recent years, many economists have argued that the increase in circulation
and mobilization of these new and heterogeneous concepts and their associated
methodologies (e.g., experiments, evolutionary modeling, simulations) signify
the death of neoclassical economics.
Late Neoclassical Economics: the restoration of theoretical humanism in
contemporary economic theory draws on the work of Louis Althusser, Michel
Foucault, and the Amherst School, and reconstructs the concept of a self-transparent
and self-conscious human subject (Homo economicus) as the theoretical humanist
core of the neoclassical tradition. Instead of identifying the emergent heterogeneity
as a break from neoclassicism, this book offers a careful genealogy of many of the
new concepts and approaches—including evolutionary game theory, experimental
economics, and behavioral economics—and reads their elaboration as part of the
restoration of the theoretical humanist core of the tradition in response to its drift
towards structuralism.
This book is suitable for those who study political economy, history of economic
thought, and philosophy of economics. The arguments put forward in this text will
also resonate with anyone who is interested in the fate of the neoclassical tradition
and the future of economic theory.
Yahya M. Madra teaches Economics at Boğaziçi University, Istanbul, Turkey.
He has published and co-authored articles on various issues in political economy
in both edited book volumes and journals.
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Richard McIntyre, General Editor
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The restoration of theoretical humanism in contemporary economic theory
Yahya M. Madra
Late Neoclassical Economics
The restoration of theoretical humanism
in contemporary economic theory
Yahya M. Madra
First published 2017
by Routledge
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and by Routledge
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Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2017 Yahya M. Madra
The right of Yahya M. Madra to be identified as author of this work
has been asserted by him in accordance with sections 77 and 78 of the
Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced or
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registered trademarks, and are used only for identification and explanation
without intent to infringe.
British Library Cataloguing in Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging in Publication Data
Names: Madra, Yahya M., author.
Title: Late neoclassical economics: the restoration of theoretical humanism
in contemporary economic theory/Yahya M. Madra.
Description: Abingdon, Oxon; New York, NY: Routledge, 2016.
Identifiers: LCCN 2016002712
Subjects: LCSH: Neoclassical school of economics.
Classification: LCC HB98.2.M33 2016 | DDC 330.15/7--dc23
LC record available at http://lccn.loc.gov/2016002712
ISBN: 978-0-415-73850-7 (hbk)
ISBN: 978-1-315-81725-5 (ebk)
Typeset in Times New Roman
by Deanta Global Publishing Services, Chennai, India
In memory of Stephen A. Resnick, 1938–2013
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Contents
List of illustrations ix
Acknowledgments x
PART I
Introduction 1
1 Introduction: making sense of an emergent
heterogeneity 3
2 Towards an anti-essentialist Marxian critique of
theoretical humanism 26
PART II
Neoclassical economics: under the shadow of structuralism 43
3 Neoclassical economics: shedding “psychologism” 47
4 Theoretical humanism in crisis: the case of
Walrasian economics in the post-war period 64
5 Theoretical humanism in the evolutionary mode:
the case of the Chicago School in the post-war period 77
PART III
Late neoclassical economics: restoration of
theoretical humanism 87
6 Breaking with neoclassicism or restoring
theoretical humanism? 91
7 Market failures and economic institutions: opening
black boxes and introducing meta-markets 107
viii Contents
8 Motivational diversity and cognitive limitations: saving the
human subject from its structuralist destitution 128
9 E quilibrium and efficiency: searching for social
reconciliation in game theoretic contexts 150
PART IV
Conclusion 173
10 Epilogue: the real divide in economics 175
Bibliography 183
Index 199
Illustrations
Figure
9.1 A taxonomic outline 157
Tables
9.1 The invisible hand game 155
9.2 The assurance game 158
9.3 The prisoners’ dilemma game 159
9.4 The hawk and dove game 162
9.5 The disorder game 167