READING 10 - The Constitution of Economic Policy

This first reading is written by James M. Buchanan Jr. and talks about the
Constitution of Economic Policy, following Knut Wicksell’s (a leading Swedish
economist of the Stockholm school) idea that the science of public finance should
keep political conditions evidently in mind. “Instead of expecting guidance from a
doctrine of taxation that is based on the political philosophy of by-gone ages, it
should instead endeavor to unlock the mysteries of the spirit of progress and
development”.
Firstly, I clearly agree with the following clear, elementary and self-evident
idea of Wicksell’s message, where it says, “If utility is zero for each individual
member of the community, the total utility for the community cannot be other than
zero.” – Topic II. Methodological Individualism. It is very simple to see why. To work
as a society, we need to evaluate everybody’s needs, because society is the
aggregate of all people living together in a more or less ordered community. As so, if
no one is happy, the community cannot be happy. By the meanings of happiness, it
also applies utility, which is the want satisfying power of any commodity or capacity
of a commodity to give satisfaction.
On the other hand, I do not agree with Wicksell’s following statement “It would
seem to be a blatant injustice if someone should be forced to contribute toward the
costs of some activity which does not further his interests or may even be
diametrically opposed to them. “– Topic IV. Politics as exchange.
By defending this opinion, Wicksell in not taking into consideration the society
as a whole. It is impossible for a society to work without the contribution of all of us.
As so, if we want to be “helped” in the areas that mater to us, we will need to also
contribute to other areas that are not that meaningful for us, however, important for
the others. Taxation has a lot of benefits as for examples it raises revenue for the
government which can be used as investment into the economy, pay off national
debt, pay its workers and even provide street lighting. And it also re-distributes
income as it usually takes more from the rich and less from the poor and afterwards
it is bequeathed to the unemployed as welfare benefits.

READING 11 - An Introduction to Postmodernism, for Economics

This second reading talks about an introduction to Postmodernism, for

economics. Firstly, I think it is important to state what Postmodernism is, which, by
definition, is an intellectual stance or a mode of discourse that rejects the possibility
of reliable knowledge and denies the existence of a universal, stable reality.
One idea that I specifically liked was one regarding the challenge to
Samuelsonian progress, that states that “modernism is not only an exhausted
project, but a destructive one”. – page 4.
 The first point pointed out is that modernism is an exhausted project, which I
do agree, since, has it is stated in the Theoretical Criminology from Modernity to
Post-Modernism, that “for many commentators we are currently in the early stage of
a whole new structure and are experiencing a transformation out of modernity. Our
current problems are viewed as radically new and we can no longer talk of ourselves
as moderns or of the need to carry out the projects of modernity”.
Regarding the other point, that is, modernism is a destructive project, I also do
agree with it. As it is said in the paper, “a form of damage is its silencing of
theoretical disagreement under the rubric of the unity of science and “correct”
scientific protocols. Furthermore, the vision has kept in place the fetishism of the
unified rational subject, the bottom line of “prediction,” the reliance on mathematical
“rigor,” and much else that has given economics its specifically “modern” character”.
On the other hand, I do not agree with the concept that sees postmodernism
as a particular world-historical phase – page 5. Like the author, I also refute the
following statement “capitalism has morphed within the past half century into a
distinct socioeconomic phase captured by the concept of “late capitalism” ”and,
secondly, that “ “postmodernism” as a noneconomic phenomenon illustrates the
existence of such a phase, or that postmodernism refers to a historical rupture in the
global economy”.

READING 12 - Hyman Minsky's Theory of Capitalist Development

This last reading talks about the theory of Capitalist Development, created by
Hyman Minsky, who was an American economist, professor of economics at
Washington University in St. Louis, and a distinguished scholar at the Levy
Economics Institute of Bard College. Minsky aim was to always take a more humane
economy as a first step to pursue a better society.
The main idea that I share my opinion with, is the following statement: “While
standard economic theory emphasizes exchange, Minsky's recognition of historical
time caused him to emphasize that production precedes exchange and that finance
precedes production” – page 3, where I can identify myself with Minsky recognition
here stated. Of course, when we take historical time into consideration, production
precedes exchange since we cannot trade anything without having the product itself
produced/generated. Moreover, production is preceded by finance, as it is
impossible to produce something without having resources like machineries, raw
material and even labor first. All of these resources require obviously finance first.
However, the idea stated by Ferri and Minsky that “Society is an "evolutionary
beast," changing in response to endogenous factors, not an equilibrium seeking and
sustaining system” – page 2, goes against the General Equilibrium Theory that
attempts to explain the behavior of supply, demand, and prices in a whole economy
with several or many interacting markets, by seeking to prove that the interaction of
demand and supply will result in an overall general equilibrium. This theory is used in
many economic models.