Showing papers by "Erik S. Reinert published in 2006"

Creative Destruction in Economics: Nietzsche, Sombart, Schumpeter

Abstract: This paper argues that the idea of ‘creative destruction’ enters the social sciences by way of Friedrich Nietzsche. The term itself is first used by German economist Werner Sombart, who openly acknowledges the influence of Nietzsche on his own economic theory. The roots of creative destruction are traced back to Indian philosophy, from where the idea entered the German literary and philosophical tradition. Understanding the origins and evolution of this key concept in evolutionary economics helps clarifying the contrasts between today’s standard mainstream economics and the Schumpeterian and evolutionary alternative.

Development and Social Goals: Balancing Aid and Development to Prevent ‘Welfare Colonialism’

Abstract: The current development policy focus on poverty reduction is erroneous. Historically, successful development policy—from the late fi fteenth century until the beginning of the twenty-fi rst—has achieved structural change away from dependence on raw materials and agriculture, adding specialized manufacturing and services subject to increasing returns with a complex division of labour. In contrast, the Millennium Development Goals are heavily biased in favour of palliative economics: alleviating the symptoms of poverty, rather than attacking its real causes. This creates a system of 'welfare colonialism' increasing the dependence of poor countries, thereby hindering, rather than promoting, long-term structural change. JEL classifi cation: F02 (International Economic Order; Economic Integration: General), F13 (Commercial Policy; Protection; Promotion; Trade Negotiations, O10 (Economic Development: General), O19 (International Linkages to Development; Role of International Organizations).

The Economics of Reindeer Herding: Saami Entrepreneurship between Cyclical Sustainability and the Powers of State and Oligopolies.

Abstract: Purpose – This paper attempts to explain the drastic fall in income experienced by Saami reindeer herders in Northern Norway between 1976 and 2000, in spite of increasing government subsidies. Saami herders maintain a legal monopoly as suppliers of reindeer meat, a traditional luxury product in Norway.Design/methodology/approach – This paper shows that a review of the literature is supported by qualitative interviews.Findings – The paper argues that main explanatory variables are to be found in the interaction of a number of factors, mainly: cyclical climatic variation in Northern Norway; a system with fixed prices, independent of the variations in supply, that magnified the effects of the natural cycles; increasingly severe sanitary regulations forcing Saami herders to abandon slaughtering and preparation; and the oligopoly market powers of the non‐Saami actors taking over slaughtering and processing. It is argued that the fall in herders' income resulted from a failure of the Norwegian Department of Agr...

European Integration, Innovations and Uneven Economic Growth: Challenges and Problems of EU 2005

Abstract: At the end of 2005 the process of European integration seems to have reached a serious crisis. The aim of the paper is a preliminary exploration of factors that have lead to the situation. The main emphasis is given to the European Union’s Lisbon Strategy. Although the strategy represents a healthy theoretical shift towards a dual emphasis on innovations as the basic engine of economic growth and on social cohesion in order to mitigate the uneven economic growth that necessarily follows in a dynamically innovative society, the shift also carries several problems of theoretical, contextual and didactical nature. Therefore, the author is in the opinion that the present situation of Europe requires more than the Lisbon Strategy’s list of good intentions focusing around innovations – it needs to bring back economic thinking and economic tools that dominated the period after World War II.

Evolutionary Economics, Classical Development Economics, and the History of Economic Policy: A Plea for Theorizing by Inclusion

Abstract: The author argues that in order to create a qualitative understanding of the factors polarizing the world in growing wealth and growing poverty there is a need to create economics by inclusion, a system where all relevant factors, some of which have been part of the economic discourse for centuries, but also elements (like the different effects of process and product innovations) that are part of evolutionary economics itself, are considered simultaneously. According to the author, this historical/institutional approach to economics would benefit especially the Third World. Moreover, the economics by inclusion should also open the way for policies of inclusion, a system that will put the accent on the wellbeing of the majority and not on the growth of the export sector.

Institutionalism ancient, old and new: A historical perspective on institutions and uneven development

Abstract: This paper argues for an ‘ancient’ institutional school, predating Thorstein Veblen’s ‘old’ institutionalism. In this view, going back as far as the thirteenth century, institutions tended to be seen as specific to a mode of production. Here both institutions and development itself are context-specific and activity-specific. Much clearer than today the arrows of causality of economic development go from the mode of production to the institutional setting, not vice versa. In order to understand development, institutions can also usefully be divided into Hayekian institutions that facilitate equilibrium and Schumpeterian institutions that enable the dynamics of development and structural change.

The Economics of Reindeer Herding: Saami Entrepreneurship between Cyclical Sustainability and the Powers of State and Oligopolies

Abstract: This paper attempts to explain the drastic fall in income experienced by Saami reindeer herders in Northern Norway between 1976 and 2000, in spite of increasing government subsidies. Saami herders maintain a legal monopoly as suppliers of reindeer meat, a traditional luxury product in Norway. This paper shows that a review of the literature is supported by qualitative interviews. The paper argues that main explanatory variables are to be found in the interaction of a number of factors, mainly: cyclical climatic variation in Northern Norway; a system with fixed prices, independent of the variations in supply, that magnified the effects of the natural cycles; increasingly severe sanitary regulations forcing Saami herders to abandon slaughtering and preparation; and the oligopoly market powers of the non-Saami actors taking over slaughtering and processing. It is argued that the fall in herders’ income resulted from a failure of the Norwegian Department of Agriculture to understand key factors distinguishing sub-Arctic herding from sedentary agriculture. Sanitary requirements and the government’s quest for economies of scale in processing contributed to playing the volume of production into the hands of non-Saami oligopolies. In this way the Saami herders lost the meat production that traditionally was at the core of both their culture and their economic livelihood. Originality/value – The paper is relevant for the management of herding and other production systems in areas with cyclical production, and documents the damaging effects on the aboriginal culture resulting from Norway’s exclusive use of modern agricultural science in managing such systems.

An “All too Human” Question: Nietzsche, Die Soziale Frage, and the German Historical School of Economics

Abstract: Although Friedrich Nietzsche seldom is considered for his economic thought, he in fact addressed many of the same problems as the German Historical School in the period, and at times discussed them explicitly. By studying Nietzsche’s political writings in the context of the ongoing debates about Marxism, laissez-faire, and the ‘Social Question’ in Germany and Italy, we hope to shed light on the broad spectrum of resistance against the extremes of communism and liberalism in late-19th century Europe.