PRESIDENTIAL ADDRESS
April, 2004
HOW DOES ECONOMICS FIT
THE SOCIAL WORLD?
David R. Harvey,
School of Agriculture,
Food & Rural Development
University of Newcastle upon Tyne
OUTLINE
 What’s
 What
 So,
the Problem?
does Economics do?
how should we do Social Science?
 Reconsidering
 Illustrations
Government & Governance
from RELU
– The food chain
– Multifunctional agriculture.
 Conclusions.
THE PROBLEM (1)
The decline & fall of economics
 Falling
student numbers & courses
 Falling
numbers of post-graduate students
 Applied
research opportunities either too pedestrian
or too complex for rigour (& publications)
 Rigour ≠ Relevance
 Management
= the future? But the science?
ECONOMICS RULES OK?
OR ECONOMICS IS MARGINAL?
THE PROBLEM (2):
What’s the use of Economics?
“When the accumulation of wealth is no longer of high social
importance, there will be great changes in the code of morals.
…. All kinds of social customs and economic practices, …
which we now maintain at all costs however distasteful and
unjust they may be in themselves, because they are
tremendously useful in promoting accumulation of capital, we
shall be free, at last to discard.”
(Keynes, 1947)
-> As people become richer, so the intellectual and phenomenal
appeal of simple economics will diminish.
Economics is marginalised,
ironic for a subject which relies on marginal conditions
WHAT DOES ECONOMICS DO?
WHAT DOES ECONOMICS DO?
WHAT DOES ECONOMICS DO?
WHAT DOES ECONOMICS DO?
WHAT DOES ECONOMICS DO?
WHAT DOES ECONOMICS DO?
HOW TO DO SOCIAL SCIENCE?
 “Postmodernism is the antithesis of the Anglo-American



analytical thesis. Out of the resulting dialectical synthesis,
however, an enriched new philosophy of science could
emerge” (Tweeten & Zulaf, 1999)
“There remains a common theme for a science of human
society, and that while much progress has been made in
developing its various facets and aspects, it is still
important to try and tie the parts together - not in search of
a ‘world formula’ but to make sense of the social habitat in
which we live, have lived and are likely to live”.
Dahrendof, 1995
Social Science must believe there to be underlying patterns
to social behaviour so what might the synthesis or common theme look like?
NATURE OF SOCIAL TRUTH?
Philosophers have four major definitions & associated
criteria:




VERACITY - confirmed by facts/experiment CORRESPONDENCE (CONSISTENCY)
VALIDITY - confirmed by rules of logic - COHERENCE
VALUE - confirmed by faith - PERFORMATIVE/PRAGMATIC
as good or bad
VERNACULAR - confirmed by habit & experience EXPEDIENT, as right or wrong (in current contexts)
Social Science Methodological Quarrels are essentially
between these four dimensions of “truth”:


Positivists (Quantitative) concerned with Veracity and
Validity - CLASSICAL SCIENCE - epistemology & ontology
Relativists (Qualitative) concerned with Values and
Vernaculars - POSTMODERN SCIENCE - ethics & morals
THE REAL WORLD?
WHERE DOES OUR DATA COME FROM?
 We generate it through our behaviours
 Which are ultimately founded on:
– Rules (our given outside determinants (g.o.ds)) - as
consistent with our societies (validity)
– Reason - as intelligibly coherent (veracity)
– Faith (our personal beliefs and values)- as worthwhile
(value)
 Or are essentially Habitual - vernacular (to be ultimately
discarded or adapted if fundamentally at odds with rules,
reason or faith)
How do we behave (1)?
We communicate and
interact as social animals
on the basis of our hearts
and minds and our trust in
our neighbours & friends
& we generate social
(informal) contracts,
networks, shared
understandings &trust as a
result
By common CONSENT
How do we behave (2)?
We club together to agree
social rules and rulers,
and generate ‘ocracies
(autocracy, plutocracy,
bureaucracy, theocracy
and (finally?)
democracy (with faith,
rules and reason
adjusted to fit)
By (political)
CONVENTION
How do we behave (3)?
We then need the force of
Law, to enforce and police
at least some of our social
contracts and behaviours
By COERCION (the
fundamental property of
the state)
How do we behave (4)?
And, of course, we
specialise & trade, and
practice economics
Resulting in a system of
CONTRACT
SO WHAT?
FOUR MAJOR
TRANSACTIONS
SYSTEMS:
•CONSENT
•COERCION
•CONVENTION
•CONTRACT
Interact to generate
our social systems
and phenomena
SO WHAT?
FOUR MAJOR
TRANSACTIONS
SYSTEMS:
•CONSENT
•COERCION
•CONVENTION
•CONTRACT
Interact to generate
our social systems
and phenomena
Which is not so
fantastic: Boulding
and others have
been here before,
by a different route.
SO WHAT?
FOUR MAJOR
TRANSACTIONS
SYSTEMS:
•CONSENT
•COERCION
•CONVENTION
•CONTRACT
Interact to generate
our social systems
and phenomena
Which generates our
socially constructed
truths - our observable
social worlds - OUR
GROUND TRUTHS
Our Ground Truths
are socially
constructed.
SO WHAT?
Re-orient, if faith is
not your apex.
It all depends on
circumstance,
context, character and
culture.
Give them any spin
you like, if you can
get away with it.
Just what the postmodern story says.
•EXCEPT:
•Here is a structure, a metaphysic, to ‘explain’ the condition
HOW DOES THIS HELP?
Social Behaviour needs to reconcile private
HOW DOES THIS HELP?
Social Behaviour needs to reconcile private and public lives
HOW DOES THIS HELP?
Social Behaviour needs to reconcile private and public lives:
With Economics being very distinctly limited in its scope.
HOW DOES THIS HELP?
Social Behaviour needs to reconcile private and public lives:
With Economics being very distinctly limited in its scope.
HOW DOES THIS HELP?
Social Behaviour needs to reconcile private and public lives:
With Economics being very distinctly limited in its scope.
HOW DOES THIS HELP?
Social Behaviour needs to reconcile private and public lives:
With Economics being very distinctly limited in its scope.
HOW DOES THIS HELP?
Social Behaviour needs to reconcile private and public lives:
BUT some major institutions are MISSING:
E.g. Management & Marketing
Kay’s Corporate Success depends on:
Competitive Advantage of products: rare,
•
inimitable, non-substitutable, valuable
Distinctive Capabilities of supply chain
•
•
•
•
•
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Strategic assets (patents, raw materials etc.)
Architecture - Charity?
Reputation - Commitment & Care?
Innovative Capacity - Curiosity?
Corporate Success depends on harnessing these
elements into coherent and sustainable whole.
e.g. - the food chain (1)
•
•
Producers Strategic Asset: Location = Originality
But requires: Innovation; Architecture; Reputation
e.g. - the food chain (2)
•
•
•
•
•
But, what about the power of the supermarkets,
especially under free-trade?
Differentiation in food sector = speciality &
bespoke service - not a supermarket
But a Super Market - franchised store space to craft
local/specialist producer-retailer chains, with home
cooking services?
Using the surviving distinctive capabilities of the
supermarket - logistics, data accumulation &
management, billing & inventory control?
Why not?
e.g. - CARE and Multi-functionality
•
•
•
•
•
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•
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[CARE - Conservation,Amenity, Recreation, Environment]
Care markets incomplete
Care products & services originally specific
Care markets do NOT fail - they work
Problem is organisation & exchange of information
between providers and users/enjoyers
Can bureaucracy & central control solve these
problems?
Only if you believe in central planning
Why not use Charitable Trusts?
CONCLUSIONS

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Economics is important,
But primitive - survival of the fittest - and we don’t tell it well.
And we decide, through our remaining transaction systems,
what counts as socially responsible rather than simply
commercially viable.
We need an integrating framework (Dahrendorf’s more
common story) for our social sciences.
This is mine.
WE SHOULD DROP THE AGRI FROM OUR TITLE
AND PRACTICE CULTURAL ECONOMY
If you have a better story or framework, please tell me.
OVER TO YOU