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Neoinstitutionalism of the North et al Form is Not Part of Metaeconomics

 

Three recent books (McCloskey 2021, 2022; McCloskey and Carden 2020) point to the need to move to a Humanomics (as does Metaeconomics, see esp. Chapter 7 Financial Policy: Tempering Excessive Greed in Lynne 2020; also see Lynne and Czap 2023 for the latest details about Dual Interest Theory in Metaeconomics).  Humanomics is "an economics with the humans and their ethics left in (McCloskey and Carden 2020, p. 176)."  Agreed, by a MetaEcon here.   McCloskey (2022) also points to how moving to a Humanomics means moving Beyond Positivism, Behavioralism, and Neoinstitutionalism.  Going Beyond Positivism (only science) to science & ethics: Agreed.  Going Beyond Behavioralism (Pavlovian-dogs, all)  which  sees only incentives to feed the self-interest without ethical reflection: Agreed. And on going Beyond Neoinstitutionalism, absolutely agreed, by a MetaEcon.  But, it needs elaboration.  Hang on, here we go.   

 

Because McCloskey (2022) points to the problems with Neoinstitutionalism, and refers to it as arising out of Neoinstitutional Economics, some clarification is needed.  In particular, Metaeconomics works to integrate Neoclassical & Neoinstitutional Economics, but  the latter is not the New Institutional Economics, not the neoinstitutional economics, and not the Neoinstitutionalism associated with Douglass North and Daron Acemoglu as identified in  McCloskey (2022).   A MetaEcon also wishes to move beyond it, too, while embracing the good and reasoned Neoinstitutional Economics  recognized in Metaeconomics (see especially Table 2.1 in Lynne 2020). 

 

From Lynne (2020, p. 374).  “Metaeconomics is ... not the same as (does not integrate with) ... the New Institutional Economics (e.g., Coase 1960; North 1990; Williamson 1975). New Institutional Economics sees Self-interest driving the evolution of institutions." It is the neoinstitutionalism coming out of this frame about which both McCloskey (2022) and this MetaEcon, well, we see the problem.

 

So, what is going on here?  Well, the good and reasoned Neoinstitutional Economics recognized in Metaeconomics  is better characterized as an integrated Institutional & Behavioral Economics, and, it arises primarily out of the shared other-interest, not primarily the self-interest as claimed by North et al. The Agricultural Economists have recognized the integration for decades, see IBES Section.  It is the old Institutional Economics integrated with modern Behavioral Economics. As was the original “old” Institutional Economics, good Neoinstitutional Economics is mainly about the shared other-interest, which also then means it is largely about the ethic(s) working to temper the primal self-interest: Good Institutions, and good Neoinstitutional Economics,  reflect the ethic that works for everyone and  temper self-interest. 

 

Make sense? If not, let me know what does make sense, such that changes can be made in future editions.

 

 

References

 

Coase, Ronald H. "The Problem of Social Cost." The Journal of Law and Economics III (October 1960): 1-44.

Lynne, Gary D. Metaeconomics:  Tempering Excessive Greed. Palgrave Advances in Behavioral Economics. Edited by John Tomer. New York: Palgrave Macmillan, 2020.

Lynne, Gary D. and Czap, Natalia V. "Towards a Dual Interest Theory in Metaeconomics." Journal of Interdisciplinary Economics,  July (2023): 1-19.

McCloskey, Deirdre Nansen and Carden, Art. Leave Me Alone and I'll Make You Rich: How the Bourgeois Deal Enriched the World.  Chicago:  The University of Chicago Press, 2020.  

McCloskey, Deidre Nansen. Bettering Humanomics:  A New, and Old, Approach to Economic Science. Chicago: The University of Chicago Press, 2021.

McCloskey, Deidre Nansen. Beyond Positivism, Behavioralism, and Neoinstitutionalism in Economics. Chicago: The University of Chicago Press, 2022.

North, Douglas. Institutions, Institutional Change, and Economic Performance. New York: Cambridge University Press, 1990.

Williamson, Oliver E. Markets and Hierarchies.  New York: Free Press, 1975.

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