It Is the Question that Drives Us!

Tyler Cowen asks the question any assessment of modern economics must consider.

Also, Ed Phelps announces the introduction of a new journal, Capitalism and Society.

The Berkeley Electronic Press, together with the members of the Center on Capitalism and Society, Edmund Phelps (Director), Amar Bhidé,  Roman Frydman, Bruce Greenwald,  R. Glenn Hubbard, Janusz Ordover, Richard Nelson, Andrzej Rapaczynski, Jeffrey Sachs, Robert Shiller and Joseph Stiglitz, are pleased to announce the launch of the Center's new peer-reviewed journal, Capitalism and Society. 

The capitalist system is noted for its outstanding dynamism. Yet established economic theory does not capture that dynamism. The Center (and its new journal) aim to further understanding of the mechanisms of capitalist dynamism and the important satisfactions it bestows.

Capitalism and Society (supported by a generous grant from the Kauffman Foundation) provides an outlet for scholarly work that advances the goals of the Center whose length, subject matter, approach, etc. might preclude publication in a standard journal.  We want to stimulate and provide a forum for discourse for ideas that may not be proven beyond a reasonable doubt. Accordingly we will publish papers along with the commentary of a reviewer, leaving room for "agreement to disagree."

Seems to be a perfect outlet for the Austrian economists to jump into the conversation.  BTW, what do you think the link is between Tyler's question and the gap in our theoretical understanding of capitalism that drives the new journal?

Comments

[Rafe]

"The capitalist system is noted for its outstanding dynamism. Yet established economic theory does not capture that dynamism."

For the very simple reason that capitalism is usually taken to mean something more than an economic system. Of course capitalism is most widely used as a term of abuse for the complex of democratic/market systems that have evolved in modern times.

Leaving aside the negative definitions of capitalism and taking a wider view and using peace, freedom and prosperity as the goals of our dynamic system, then at least three pillars are required for this "liberal order". These are free markets, the rule of law and a sound moral framework. The third leg of the stool is probably the least appreciated and the situation is not helped by the unsatisfactory state of moral philosophy. Don't get me started...

The question is, how and to what extent is economic theory supposed to incorporate all three of the elements required for a dynamic economy, along with any others that people might like to offer?

Time for lunch.