Author: Dennis Venter
Abstract:
At the heart of the renewed criticism against neoclassical economics is the idea that it is incompatible with the dynamic type of economic coordination that emerges in the real world. Its focus is limited to what its accepted methodology can measure while all else is deemed constant or exogenous. It is in this need for a new approach to economics that this paper finds its aim. The emergence of the aforementioned economic coordination is explained by considering an expanded version of the history of economic thought, starting with nomadic society and including experiences beyond the Western narrative. This provides an expansive sketch of the complex development of economic thought. This sketch is complimented by a framework inspired by Spiral Dynamics to highlight the rich dynamics present within. It is then analysed with Integral Theory’s Four-Quadrants which allows the identification of three specific variables which evolve and interact to drive dynamic change in any economy. The variables are defined as perspective (i), environment (P), and needs (N). Affordance Theory is applied to further explain how the three interact: In our environment (P), affordances are said to represent latent possibilities independent of the individual’s ability to recognise them, they become active given the “physical capabilities of the actors... their goals, beliefs and past experiences”. Similarly, needs (N) in a hierarchy imply that they are latent in the human psyche where the satisfaction of one need affects a change in perspective which is an activation of the next need. The conclusion brings the three variables together into a new definition of economics, which is also expressed in the form of a “function” E=f(NP). This paper thus expands familiar economic concepts by grounding them in ecology and psychology, making these concepts compatible with the dynamic economic coordination that emerges in the real world. This allows the focus to be placed on three, well-defined, drivers of change rather than on the transitory phenomena resulting from change.
Key words: Institutional economics, economic pluralism, emergence, integral economics, social complexity
JEL codes: A2, B0, O0, P5, Y2, Z1
REFERENCES
Allison, M 2008 ‘Starbuck closing 73% of branches in Australia’, The Seattle Times, July 29 2008. Page 3.
Backhouse, R. 2001. ‘How and Why should we Write the History of Twentieth-Century Economics’, Journal of the history of economic thought. June 2001 23(02):243-251.
Roger E. Backhouse & Philippe Fontaine, 2010. "Introduction: History of Economics as History of Social Science," History of Political Economy, Duke University Press, vol. 42(5), pages 1-21.
Beck, D; Cowan, C, 8 May 1996. Spiral Dynamics: Mastering Values, Leadership, and Change. Blackwell Publishing. Chichester.
Chemero A, 2003 An outline of a theory of affordances. Ecological Psychology. doi: 10.1207/S15326969ECO1502_5
Chemero A, 2009 Radical embodied cognitive science, MIT Press, Cambridge.
Chemero A, 2013 Radical embodied cognitive science, Review of General Psychology doi: 10.1037/a0032923
deRoover, R,. 1958, ‘The Concept of the Just Price: Theory and Economic Policy’, The Journal of Economic History. Vol.18, No.4 (Dec.,1958), pp. 418-434. Published by Cambridge University Press.
Dow, S 2009. ‘History of Thought and Methodology in Pluralist Economics Education’, October 2009 Sheila Dow, A Pluralist Handbook for Economics Education, London: Routledge, 2009, pp. 43-53.
Fullbrook, E 2008 ‘Pluralist Economics’. 2008 - philpapers.org. Palgrave Macmillan
Gibson, J. 1979 ‘The Theory of Affordances: The Ecological Approach to Visual Perception’, Houghton Mifflin, Boston.
Gordon, D 1965 ‘The Role of the history of economic thought in the understanding of modern Economic theory’. The American Economic Review Vol.55, No.½ (Mar. 1, 1965) pp. 119-127.
Graves, C, 1970. ‘Levels of Existence: An Open System Theory of Values’, Journal of Humanistic Psychology. 10(2): 131-155
Heft 2003 Affordances, Dynamic Experience, and the Challenge of Reification Ecological psychology, 15(2), 149–180
Keynes, J.M. 1936 The General Theory of Employment, Interest and Money, The Macmillan Company, London.
Reed, E 1996, Encountering the World: Toward an Ecological Psychology. Oxford University Press, New-York.
Rockwell, T 2005 Neither brain nor ghost: A non dualist alternative to mind-brain identity theory Chapter 10: Dewey and the Dynamic Alternative.
Sahlins, M 1972 The Original Affluent Society. Extract from Stone Age economics by Marshall Sahlins. 1972 Aldine Atherton Inc. Chicago, Illinois.
Natsoulas, T 2004 ‘To see things is to perceive what they afford: James J. Gibson’s concept of affordance’ The journal of mind and behaviour Vol. 25 No.4 pp. 323-347 Published by Institute of Mind and Behaviour, Inc.
OECD 2019 Organisation for Economic Cooperation and Development. SG/NAEC(2019)3 12 Sept 2019. Beyond growth: Towards a new economic approach. 17-18 Sept 2019, OECD Conference Centre.
Dawkins, R, 1976, The selfish gene. Oxford University press, Oxford University.
Smith, A 1776, An Enquiry into the nature and causes of the Wealth of Nations, W. Strahan and T. Cadell, London.
Solow, R. (1985). Economic History and Economics. The American Economic Review, 75(2), 328-331.
IEDAE (2016) Dynamic Theory of Needs Supply and Progress. May 12 2016, Available online <https://youtu.be/ids3CyA5EKQ>
Weeks, J 1989, A critique of neoclassical macroeconomics. St. Martins Press. New York
Wilber, K 1996, A brief history of everything. Boston and London: Shambhala pp.200-285.
Williams, J, McNeill, J, ‘The current crisis in neoclassical economics and the case for an economic analysis based on sustainable development’, U21 Global Working Paper, 2005.
Cite this paper as:
Venter, D 2016 The Need for a Dynamic Approach to Economics, IEDA
DOI
Pending
