The concept of a “merit good” the ethical dimension in economic theory and the history of economic thought or the transformation of economics into socio-economics

The purpose of this paper is to defend the concept of a “merit good” and to expand its application. This is achieved by using a Kantian philosophical argument applied to the writings of foundational economists such as Adam Smith and Henry Simons (and Walter Eucken in the German literature). As a result the concept of a “merit good” is used to classify and argue for a number of governmental tasks such as the institutional arrangements to make a free market economy work, work efficiently and work in a humane way. Methodologically, this paper connects—as the work of Joseph A. Schumpeter already has—economic theory, the history of economic thought and institutional economics and thereby demonstrates that economics is necessarily about socio-economics.     

Public goods: An ideal concept

I see the concept of ‘a public good’ as an ideal concept defined by a pair of related characteristics: an opportunity for gain for a collectivity because of nonrivalness in consumption, where the opportunity for gain is difficult to finance because of the nonexclusion possibility. Even at that ideal level, it is impossible to present a solution able to fully realize the opportunity for gain.Given the difficulty of finding a satisfactory solution even at the ideal level, it would be surprising if an analysis of concrete instantiations of public goods would be simple. I will show that economists use at least thirteen concepts to point to economic problems related to public goods. This is more than opponents of the concept ‘public good,’ Malkin and Wildavsky, accuse the economic profession of using.I will reject the conclusion of Malkin and Wildavsky that the concept of a public good is a social construct and thus a purely culturally relative concept. I will concede, nevertheless, that in trying to realize some of the gains presented by goods having public goods aspects, social and cultural preferences play an important role. My conclusion, which justifies the ideal concept ‘public good’, implies that there is potentially a legitimate governmental role in dealing with public goods. Recognizing the socio-political dimension of economics means that one recognizes that the economic reality is complex. It does not justify, however, scepticism about concepts.     

Self-interest and the theory of action

The concept of self-interest remains underdeveloped in sociology although central to economics. Recent methodological and social trends render sociological indifference to the concept untenable. The term has enjoyed historical predominance in the West since the sixteenth century. While it is seen in modern economics as a singular motivating force, Adam Smith regarded self-interest in economic action as necessarily moderated by sympathy. In addition to its problematic economic conceptualization self-interest has an experiential basis in unequal power relations. An alternative to the concept of self-interest is presented by Amartya Sen in his account of commitment; its inconsistencies, however, render Sen's statement unsatisfactory. Differences between present and future interests indicate that the distinction between self-interested and other-interested action is not sustainable.     

Clarification? Yes! Standarization? No. Or: What Kind of Cooperation for the Sociology of Culture?

Christian Smith’s paper “The Incoherence of ‘Culture’ in American Sociology” is a valuable provocation that can prompt us to reflect on the role of concepts and on the role of agreement on the definition of concepts in scientific research. In this comment paper, I raise questions about Smith’s empirical expectation that sociologists should agree on a concept of culture based on debates in the sociology of science. I also suggest that in terms of the future agenda for the sociology of culture, we should distinguish between dialogue and clarification on the one hand, which I agree is needed, and standardization on the other hand, which seems incompatible with open-minded empirical research. Rather than work on agreement on what culture is, we might work on clarifying relevant distinctions among dimensions of culture.     

ECONOMIC REGULATION IN MERCANTILE EENGLAND: HECKSCHER REVISITED

The gradual evolution to free enterprise in England, which became quite pronounced about the time of Adam Smith, is explained in this paper in terms of institutional changes in the rent-seeking society of mercantile England. In this explanation the role of ideas and influential writers is seen as subsidiary to the role of real economic and institutional forces in producing historical outcomes. Moreover, a major feature of our rent-seeking interpretation is that the poor design and competition for control of the mercantile regulatory process unintentionally helped bring about the institutional changes which made rent seeking and economic regulation by the central government less feasible.
"a part of that force which always intends evil 4und always creates good"— Goethe, Faust.     

Public Relations in a Democratic Society: Value and Values

Each of the articles in this special issue merit attention based solely on the authors' contributions to alternative ways of doing and understanding public relations. More important, as a body of work, the authors expand on Schudson's (1997) provocative article about the role of conversation in a democratic society. In this review, I summarize the strengths of each article, discuss the focus on activist publics, highlight concepts new to the study of public relations, and suggest avenues for further thought based on the ideas presented in this issue. I conclude with the proposal that in a democratic society, public relations should facilitate making profoundly uncomfortable conversations more comfortable.     

Symbolic Interactionism and I

This is a story of my involvement with symbolic interactionism and its influence on my thinking. The process included the following phases or stages: (1) an early foundation from Florian Znaniecki, David Hume, and Adam Smith; (2) participation in “the second Chicago school,” especially with Blumer, Hughes, and colleagues; (3) contact with an expanded circle of symbolic interactionists, working on various theories and concepts in many contexts, often united by the Society for the Study of Symbolic Interaction; (4) attempts at understanding and conceptualizing the interweave of my own work in several areas with my personal experiences; (5) use and development of four basic concepts: social roles, sentiments, identities, and self‐concept.     

THE METRICS OF STYLE: ADAM SMITH TEACHES EFFICIENT RHETORIC

Does style matter for economic writing? Several stylistic characteristics of ninety-seven AEA presidential addresses, including word length, sentence length and percent of sentences in the passive voice, were computed and used to explain citations to these economists' work. Avoidance of the passive is an old stylistic norm given by Adam Smith. Word length and sentence length serve as modern stylistic norms. Only the percent passive matters to explain citations. Perhaps not coincidentally, while writing clarity in our data set has declined over time when measured by the new norm, it has improved when measured by the old norm.     

Smith's Sentiments (1759) and Wright's Passions (1601): the beginnings of sociology

Treatments of sources of Adam Smith's sociological theory of the self and associated ideas in The Theory of Moral Sentiments typically refer to classical antecedents or the work of his teacher Francis Hutcheson or his contemporary David Hume. During the seventeenth century, however, many books on the passions were published in London that arguably constitute an important but neglected source of Smith's treatment of moral sentiments. These works are largely forgotten today but at the time were widely read. They are not philosophical, partly devotional and predominantly psychological. Although Smith does not refer to these works his argument resembles theirs in many places. The importance of the seventeenth-century books on the passions, apart from their role in the history of psychology, is their bearing on contemporary economic practices. In this paper the connections between Smith and one of these books, Thomas Wright's The Passions of the Minde in Generall, are indicated.     

Cultural heritage as multi-dimensional,multi-value and multi-attribute economic good: toward a new framework for economic analysis and valuation

The purpose of the paper is to review critical issues concerning the economic dimensions of cultural heritage, in order to show that—tangible and intangible—“cultural economic” goods and services, as provided by cultural institutions, may be analysed and valued in a multi-dimensional, multi-attribute and multi-value socio-economic environment. On this multi-dimensional and multi-attribute setting, a conceptual framework for analysing cultural services and cultural capital is established. The paper is speculative in nature, suggesting new prospective for evaluation and empirical inquiry. The work is divided in three parts. The first part begins by surveying the literature on merit goods, re-examining how different paradigms, neo-classic and more unconventional, have dealt with the issue, and assessing why, and to what extent, merit good is a proper economic notion. The second part focuses on the role merit good theory should play in cultural economics, and specifically how it is possible to integrate the merit good and the mixed good theoretical and conceptual framework. Cultural resources are to be defined ideally as joint merit-mixed good, on a multi-dimensional scenario. Cultural capital offers and “produces” services and functions, providing private, public and merit good elements of benefit (value). The multi-dimensional framework also entails a multi-paradigmatic perspective, bringing together neo-classic and non-neo-classic elements. The last section summarises and concludes that such an established conceptual framework indicates and supports new routes for economic valuation and policy making concerning the cultural field and cultural institutions. Disaggregating cultural activities into many services and functions allows the analysis to focus on single components of “benefit” supplied by cultural institutions and demanded by users. Valuing culture as a non-holistic resource might help economic analysis and decision-making processes. The main emerging results are: (i) the notion of merit good is relevant for cultural economics and cultural policy, and it represents a relevant ideal “metaphor” and an important dimension of value associated to “cultural functions”; (ii) the inclusion of merit good theory gives the possibility to define cultural stock and services as a compelling case of multi-dimensional categorisation of private, public, mixed and collective services, where different theoretical perspectives are integrated with each other as far as possible; (iii) being intrinsically placed in a dynamic and uncertain setting, merit good theory demonstrates to be, in theoretical and policy term, the necessary a priori for the theory and policy of mixed good provision, both at macro and microeconomic level. Policies motivated by the merit good issue should aim at providing the necessary collective tangible and intangible investments on which long run effects of cultural policies rely; (iv) special effort should be devoted to the study of “demands” associated to cultural goods, emphasising the role of valuation analysis, supported by the conceptual framework here developed. The work intends to constitute a point of reference for future research, generating some controversy and stimulating further contributions.     

Toward a dual motive metaeconomic theory

In light of recent findings in neuroscience and experimental economics research, as well as new understandings about Adam Smith and Darwin, the paper seeks a new synthesis in a “metaeconomic” theory that recognizes dual motives. The “meta” suggests the need to go beyond and transcend microeconomic theory while still retaining its main features. New findings suggest it is human nature to not only have the tendency to pursue self-interest but to also condition that pursuit with the sentiments, as Smith suggested. In modern terms, this means to condition the egoistic–hedonistic tendency with the empathetic–altruistic tendency. This also means individuals seek the survival of not only self but also the group, as Darwin understood it. Metaeconomics recognizes the inherent conflict in doing both simultaneously. The economic goal shifts to maximizing peace of mind both within and among individuals rather than maximizing one of the interests. Value emerges on a higher plane.     

Immigration and the evolution of economic theory

This is a review of "the limited and scant contributions made to immigration theory in the context of the evolution of economic thought over a protracted historical time span." The economic theories considered include those of the mercantilists, Adam Smith, the classical economists, and J. M. Keynes. (SUMMARY IN FRE AND SPA)     

Economics students need not be greedy: Fairness and the ultimatum game

Following Adam Smith, conventional economics gives self-interest the primary role of all economic behavior. However, past experiments with the ultimatum game often produce outcomes inconsistent with this orthodox conception of ‘economic man.’ In our replication of the ultimatum experiment, students at a small, liberal arts college do not allocate monetary rewards in a self-interested manner, but rather their choices conform with the social norm of ‘fairness’ (i.e., a 50/50 split). Contrary to past research, we find that economic majors are less motivated by self-interest than other students.     

Latin American debt,the IMF,and Adam Smith: A proposal for ethical reform

We examine the role of the IMF orthodox paradigm, and the value system upon which it rests, in the Latin American debt crisis. We conclude that the IMF orthodoxy is an inappropriate basis for international transactions because of the a priori utilitarian value assumptions on which it is based. Furthermore, those value premises have hardened into a narrow and inflexible ideology—similar in nature, if not in content, to Marxist ideology—which has been imposed on indebted Latin American countries. We recommend a value system based on the writings of Adam Smith to replace the value system inherent in the IMF orthodoxy. This value system stresses the inestimable value of all individuals, and we argue that governments and economic institutions must never diminish the happiness of innocent people. We conclude the article with some specific recommendations for reform at the IMF to bring its policies more in line with the moral ideals of Adam Smith.     

The long-term protection of biological diversity—lessons from market ethics

Economic markets are not morally free zones. Contrary to popular misconceptions, market functioning rests on the ethical principles of fairness and voluntariness. This ethical foundation can be traced back at least to moral philosopher Adam Smith, one of the founders of modern economics. In the inconspicuous form of microeconomic axioms, these moral foundations are preserved. Thus, virtually all “neo-classic” economic concepts presuppose a market ethics of fairness and voluntariness. In a world of pervasive uncertainty on the long-term development of the human-environment interaction, the protection of the global life-support systems is an important test case for the scope of the ethical content of market ethics. We review risk protection strategies in the face of this uncertainty that are (i) based on the insurance effect of biological diversity, and (ii) that employ a safe minimum standard (SMS). Because the fairness principle of market ethics requires that economic agents who cause “external” costs must, at least, compensate those who are burdened with these costs, the interests of future generations have to be included in responsible economic decision-making. The market and market ethics approach is applied to the analysis of a SMS for biological diversity, and to the inherent problems of such an approach. At the microeconomic level of individual decision-making, an unconditional protection is supported by market ethics neither for the putative interests of future generations nor for biological diversity: Poor people who struggle to cover their basic needs cannot not be required to care for biological diversity. In all other cases, the protection of biological diversity in favour of future generations is supported—if costs are not “unacceptably high”. At which cost level this point is approached, market ethics is not designed to decide.     

A refundable tax credit for children: Self-interest-based and morally based arguments

This paper argues that children are a special subgroup of society in that they represent an opportunity gain for the whole society. Self-interested individuals acting atomistically are not motivated to contribute optimally, if they contribute at all, to the realization of this social opportunity. Neo-classical economic theory handles societal opportunities as public goods, giving the government a positive role. But, it can be argued that financing of a public good by means of general taxation, violates the public good argument. Such a financing method requires, in addition to the public goods argument, a moral or merit good argument. This paper attempts to provide such an argument. It will also be argued that the current method of providing child support in the U.S. is defective.     

Smith and Rawls share a room: stability and medians

We consider one-to-one, one-sided matching (roommate) problems in which agents can either be matched as pairs or remain single. We introduce a so-called bi-choice graph for each pair of stable matchings and characterize its structure. Exploiting this structure we obtain as a corollary the “lone wolf” theorem and a decomposability result. The latter result together with transitivity of blocking leads to an elementary proof of the so-called stable median matching theorem, showing how the often incompatible concepts of stability (represented by the political economist Adam Smith) and fairness (represented by the political philosopher John Rawls) can be reconciled for roommate problems. Finally, we extend our results to two-sided matching problems.     

The Systems Theory Concept of Disability: one is not born a disabled person, one is observed to be one

The article aims at the theoretical development of the concept of disability, with particular reference to its integration with social systems theory. The concept of disability is discussed by suggesting that the predominant models within disability research cannot communicate with each other because they represent different observation points, all of them describing disability from within a specific system. It is the thesis of this article that the distinction between individual and society, which constitute the basis of the well-known scheme of observed differences between impairment, disability and 'handicap', is a distinction based on nai¨ve realism and obscures the problems within disability research. In line with a long tradition within sociology, social system theory rejects the belief that our concepts are representations of reality: the categories and concepts we use are distinctions that are system specific. It is through those distinctions that the phenomenon is observed. This implies that observations are not absolute but relative to the observer's perspective.     

Situated Learning and Cognition: Theoretical Learning and Cognition

The aim of this article is to analyze how schoolchildren's thinking and concept formation generated in classroom teaching can relate to daily life situations. Situated thinking and learning and theoretical thinking and learning are discussed as learning forms that can accomplish this integration. According to Vygotsky, subject-matter concepts are transformed into personal concepts through children's ability to use them in daily life. The relation between skill and content has to be presupposed in this transformation of subject-matter concepts into everyday concepts, because everyday or daily-life concepts are learned through and interwoven with practical activities in cooperation with other people. The analyses are based on distinctions between (a) societal and personal knowledge, (b) subject-matter and everyday concepts, (c) subject-matter methods and content, and (d) thinking as related to subject-matter methods and concepts as related to subject-matter content. For the personal aspect of knowledge, everyday concepts are located within the life setting of a person; therefore, the relation between subject-matter concepts and personal concepts is often much weaker for immigrants and refugees coming to a new country than for children with generations of ancestors in a society. A project with Puerto Rican children is sketched to discuss how classroom teaching can relate subject-matter knowledge of social science with children' s everyday concepts and thereby enhance the children's theoretical concepts and thinking.