Journal of Economic Issues

Volume 31, March 1997

Journal of Economic Issues

Volume 31, March 1997

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Covaleski, Mark A.; Dirsmith, Mark W. and Samuel, Sajay

A Strategic Deconstruction of John R. Commons's Regulatory Discourse

Within the institutional economics literature, increasing research attention has been directed toward understanding the rhetorical constitution of economics. This article contributes to this understanding through a strategic deconstruction of the discourse of John R. Commons in which he sought to establish an approach to regulation of electric utilities in the State of Wisconsin. Two rhetorical strategies are used: the "formalist voice" and the "expertise voice," to deal with the necessary, though arbitrary inclusion of both objectivity and subjectivity within the regulatory milieu. Commons' "reflective voice," wherein he recognizes the paradoxes inherent in regulation, is examined. J. Econ. Issues March, 1997, pp. 1-27, University of Wisconsin, Madison, Wisconsin, U.S.A.; Pennsylvania State University, State College, Pennsylvania, U.S.A.; Bucknell University, Lewisburg, Pennsylvania, U.S.A.

Haight, Alan Day

Padded Prowess: A Veblenian Interpretation of the Long Hours of Salaried Workers

Veblen emphasized the influence of early hunting on our modern notions of status. This paper adds a distinction between hunters who return bearing game and hunters who return without a visible product: the former can enhance status by understating work effort, while the latter must adopt a posture of conspicuous exhaustion. Such status ploys may contribute to the male-female wage gap. Illustrations are drawn from Arthur Miller's classic drama Death of a Salesman, and from athletic contests. Veblenian status ploys rooted in barbarian traditions often conflict with the Protestant work ethic and the American disdain for aristocracy. J. Econ. Issues, March, 1997, pp. 29-38, Bowling Green State University, Bowling Green, Ohio, U.S.A.

Moschandreas, Maria

The Role of Opportunism in Transaction Cost Economics

Examines critically the nature of, and the pervasive influence exercised by, opportunism within transaction cost economics (TCE). It attempts to show that a TCE failure to account for diversity in human motivation coupled with theoretical inconsistencies in the use of opportunism leads to biases in organizational design which can render hierarchical structures inefficient. Inefficiencies may result from a failure to recognize that institutional design can affect behavior, and from the lack of mechanisms safeguarding against subordinate exploitation. The analysis lends support to the view that imputing a transactions cost efficiency rationale to observed organizational structures may lack credibility. J. Econ. Issues, March, 1997, pp. 39-57, Middlesex University, London, England.

Hunt, Shelby D.

Resource-Advantage Theory: An evolutionary Theory of Competitive Firm Behavior?

A new resource-advantage theory, formulated in the marketing, management, and socioeconomics literatures, fuses marketing's heterogeneous demand theory with management's resource-based theory of the firm. This article argues that resource-advantage theory is an evolutionary account of rivalrous firm behavior in that it is a phylogenetic, non-consummatory theory of competitive firm behavior. Both firms and resources are heritable, durable units of selection, and competition among firms is the selection process that results in the survival of the "locally fitter," not the "universally fittest." Resource-advantage theory conceptualizes resources and resource creation in ways that are congruent with current institutional theory. J. Econ. Issues, March, 1997, pp. 59-77, Texas Tech University, Lubbock, Texas, U.S.A.

Jin, Dengjian and Haynes, Kingsley E.

Economic Transition at the Edge of Order and Chaos: China's Dualist and Leading Sectoral Approach

China's experiences in economic transition from a planned to a market economy are summarized, compared to those of Russia, and re-examined through the perspective of complexity theory of evolutionary (institutional) economics. In contrast to the conventional "big bang"/"gradualist" dichotomy, a dualist and leading sectoral approach is proposed to interpret China's break through the gridlock of interconnectedness of the old planning system. This approach overcomes the problem of discrepancy in the pace of transition among components of the socio-economic system. The paper also addresses the importance of positive feedback and positive-sum principles for successful economic transition. J. Econ. Issues, March, 1997, pp. 79-101, George Mason University, Fairfax, Virginia, U.S.A.

O-Hara, Phillip Anthony

A New Measure of Macroeconomic Performance and Institutional Change: The Index of Community, Warranted Knowledge and Participation

Develops a new measure called the Index of Community, Warranted Knowledge, and Participation (ICWP). The first section explores the relevant theory. The second examines P.D. Bush's micro-model as applied to the system of production. The third extends the Bush model to the macroeconomy to examine capitalist reproduction over time. J. Econ. Issues, March, 1997, pp. 103-128, Curtin University of Technology, Perth, Australia.

Birecree, Adrienne M. and Konzelmann, Suzanne

A Comparative Analysis of Cases of Conflictual Labor Relations in the Corn Processing, Steel, Paper and Coal Industries

In recent decades firms in a number of major U.S. industries have pursued relatively aggressive and adversarial strategies that precipitate labor-management conflict. This has happened even as labor-management cooperation has received widespread attention as a strategy for promoting organizational economic performance. This paper examines the determinants of aggressive approaches to labor relations at the industry level, by comparing case studies of notably aggressive firms in the corn processing, steel, paper, and bituminous coal industries. It also evaluates the effects of such strategies on firm performance in both the short and long-term. J. Econ Issues, March, 1997, pp. 129-144, Radford University, Radford, Virginia, U.S.A. ; Indiana University at South Bend, South Bend, Indiana, U.S.A.

Stern, David I.

Polarities The Capital Theory Approach to Sustainability: A Critical Appraisal

Among the most prominent approaches to sustainability theory is the capital theory approach (CTA) which is based on maintenance of a capital stock. CTA concepts are now informing policy even though there are a number of difficulties of application in a theoretically valid manner. Internal difficulties with the CTA are reviewed as are criticisms from outside the neoclassical normative framework. The compatibility of sustainability, as originally conceived, the institutionalist instrumental valuation and the clash between CTA and the latter approach are discussed and alternative approaches examined. These approaches accept the open-ended and multi-dimensional nature of sustainability that reduces the coherence and applicability of CTA. J. Econ. Issues, March, 1997, pp. 145-173, Australian National University, Canberra, Australia

Spotton, Brenda

Financial Instability Reconsidered: Orthodox Theories versus Historical Facts

Histories of three high-profile episodes of financial crisis: the 1720 French "Mississippi Bubble," the 1825 British episode and the 1929 American debacle are summarized. The paper concludes that orthodox theories fail to explain critical turning points. The stylized facts that emerge from the historic episodes appear to be consistent with the institutional assumptions of earlier theorists--namely, John Maynard Keynes, Joseph Schumpeter and Irving Fisher--and with the modern heterodox theorists who have continued in their tradition. J. Econ. Issues, March, 1997, pp. 175-195, York University-Atkinson College, North York, Ontario, Canada

Brooks, Arthur C.

Toward a Demand-Side Cure for Cost Disease in the Performing Arts

The inability of the performing arts sector to enjoy increases in labor productivity exposes it to the possibility of cost disease--continuously rising costs relative to revenues. While many economic studies of this problem have centered on the supply side, very little work has been done on the demand side. This paper seeks to begin this task. First, it separates a "Veblenian" approach to increasing demand, in which the luxury status of the performing arts is enhanced, from a "Marshallian" one, in which the number of people exposed to the performing arts is maximized. Which approach is currently most widely used, and which might be better, are the concluding questions. J. Econ. Issues March, 1997, pp. 197-207, The Rand Corporation, Santa Monica, California, U.S.A.

Gedeon, Shirley J.

The Modern Free Banking School: A Review

The modern free banking school (MFB) argues that a central bank is not an economic necessity, but a political creation that weakens the discipline that competition imposes on banks. Competition limits the total issue of inside money (notes, demand deposits, possibly electronic money) to just the amount that the public wants to hold. This article shows that the MFB argument is flawed because it fails to distinguish between liquidity preference and money demand, thereby leaving itself without an adequate theory of how the market attend to financial fragility and respond to economic crisis. J. Econ. Issues, March, 1997, pp. 209-222, University of Vermont, Burlington, Vermont, U.S.A.

Boyd, David W.

From "Mom and Pop" to Wal-Mart: The Impact of the Consumer Goods Pricing Act of 1975 on the Retail Sector in the United States

In the retail sector in the United States over the past 40 years there has been a shift away from smaller, higher-service "mom and pop" retail proprietorships towards larger, warehouse-like, mass merchandisers. This retail migration is in part due to the passage of the Consumer Goods Pricing Act of 1975, which effectively outlawed the manufacturer practice of resale price maintenance. The legislation encouraged retail free-riding and eroded property rights in retail services, leading to the demise of many small, service-oriented retailers, thus paving the way for growth of mass-merchandisers. J. Econ. Issues, March, 1997, pp. 223-232, Denison University, Granville, Ohio, U.S.A.

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Last Updated on: Monday, May 5, 1997