“The market cannot be usefully understood as separate from society” : Social Economics, Social Economists and the Real World – by Wilfred Dolfsma
April 28, 2015
Author Articles, Economics and Finance
Social Economics understands the economy as value-laden – laden with values not just of a ‘bourgeois’ kind, such as prudence and thrift. The values of prudence and thrift are values that are consistent with a view of the market as an means for actors of all stripes to maximize whatever it is that they want to maximize. But, Dr Wilfred Dolfsma explains, social economics acknowledges that there are more values than these that imbue the economy with meaning.
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Values such as care and fairness are not just values that may be found in families, closely-knit communities, or that are discussed among only some philosophically-minded people as their working week ends and they enjoy a glass of wine.
While social economics does not tend to favour any particular set of values over others (values are discussed equally well over a glass of wine as over a pint of beer or a smoothie), social economists are concerned about inclusiveness. Values in support of inclusion of the disfavoured, allowing people to take part in the economy as a practice through which we can provide for ourselves and those we love, are still a broad set of values.
In this respect, the market is no different from any other social practice: all are value-laden, and practices are laden with a plurality of values. Indeed, even when adopting an academic mind, one that is trained to abstract, applying Ockam’s Razor, a social economist would emphasize that any single social practice must be understood as part of a larger social setting. Even such a multifaceted practice as the market cannot be usefully understood as separate from society.
The early economists have always understood this to be the case. For a plurality of reasons, one among these being a streak of physics-envy, economists have abstraction to an extreme in the name of academic rigour. Many economists have looked at the market as fully separate, oddly in line with Marxists. While precision has certainly increased, relevance has definitely not. Rather the opposite.
Fortunately,
this is realized by many, and not just by economists, and so social
economics has come into even more favourable light. Just as the first
edition of the Elgar Companion to Social Economics,
in 2008, offering cutting edge thought on core themes in social
economics, the economic crisis hit much of the globe. To social
economists this crisis did not come as a surprise – even though there is
not a single social economists who will claim to have predicted the
crisis’ occurrence to the day. Social economists are much too well aware
of the complexity of the economy, and perhaps because of it too they
are too modest too.Not being afraid to go against the grain of contemporary economics that still separates the positive from the normative in science, and shuns the latter, social economists have developed a comprehensive approach to judging the current state-of-affairs of a setting. Is it duly serving the needs of all, and how can it be improved upon, tentatively? While recommendations will be provided with due care and caution, there is not the active resistance to stepping in to policy debates. Social economists want to change all society for the better, and particularly for those who are in danger of being excluded (and not just change in favour of some, for instance those who can cough up high speakers’ or consultants’ fees).
Social economists thus discuss high theory, connecting from what many will understand as economics-proper, but relate to domains in the social science that some might believe is beyond the scope of economics, even to domains that squarely no longer are economics. If a proper understanding of a problem demands that this be done, social economists should not and do not shy away from it. Social economists also do not shy away from philosophical discussions, continuously determining if its premises are in need of further strengthening. Never, however, is social economics involved in theory-for-theory’s sake, A’-C’ modelling exercises that only very few fellow economists can understand. Depth and rigour in analysis can never be an excuse for arcane academic work. Contributions to the Elgar Companion to Social Economcs, 2nd Edition, are indications of this.
Dr Wilfred Dolfsma
is a member of the University of Groningen School of Economics and
Business. He is Editor-in-Chief, with Robert McMaster, of the Review of Social economy and Editor, with John Davis, of Elgar Companion to Social Economics, 2nd Edition. Cheltenham, 2015