On top of Legal Institutionalism, Micro-Macro Accounting and Stützel’s Mechanics of Balances are the second fundamental building block of our approach, as outlined in Thomas Weiss’ presentations at the 2016 YSI Plenary in Budapest (view here) and 2017 WINIR Conference, “Institutions and Open Societies” (view here).
Fabian Lindner is now hosting a new blog in english on Stützel’s Mechanics of Balances. You are invited to explore it here. More detailed overviews in english on the basic concepts of this fundamental building block of our approach can be found here and here.
We will be giving a 3-day seminar “Introduction to New European Political Economics and Legal Institutionalism” at BI Norwegian Business School in Oslo, Norway.
It will take place from November 1-3, 2017 and feature guest speakers Geoff Hodgson (University of Hertfortshire) and Johannes Schmidt. Geoff Hodgson is the co-developer of Legal Institutionalism, author of the book “Conceptualizing Capitalism” and co-founder of WINIR, the World Interdisciplinary Network for Institutional Research. Johannes Schmidt is a Professor at the Hochschule Karlsruhe Technik und Wirtschaft and, together with Fabian Lindner, a pioneer in communicating Wolfgang Stützel’s work on mechanics of balances to the English speaking community.
A full description and programme can be found at BI Norwegian Business School’s website by clicking here. Papers for download can be accessed here (links open in new tabs).
We welcome and invite anyone interested in getting an introductory overview of the current state of our work and discussing with us personally!
Nicolas will summarize some difficulties in building open societies that are are rooted in the contradictory basic legal structure of open societies: the private/public law dialectic. Public law is based upon centralizing power and sovereignty, private law on its opposite, fundamentally decentralizing power, decisionmaking and sovereignty. Yet, private law presupposes public law and cannot exist without it. Republican constitutions mediate this conflict but in times of crisis have often been replaced by authoritharian forms of government: forms of government have been changing back and forth between more centralized and more decentralized forms. Such cycles were well known to many republican thinkers of classical antiquity, among them Aristoteles, Cicero, Machiavelli, Vico and Kant, as Anacyclosis.
State building itself has to deal with an even more fundamental conflict, as Francis Fukuyama points out in his recent 2 volume global comparative history of state formation: the conflict between kinship-based “informal” relations and the impersonal legal order of a modern state, which are in no less of a tension than public and private law.
Wolfgangs presentation will develop a legal institutionalist concept of money and show how from that perspective, two controversies in monetary theory can be solved in a fairly uncontroversial way: that between metallists and nominalists, and that between Randall Wray’s Modern Monetary Theory and Perry Mehrling’s Money View whether the state’s liabilities are often at the top of the hierarchy of means of payment because the state is a quasi-absolutist entity (Wray), or rather because the state “does business” with all its citizens (Mehrling).
Thomas’ Presentation will sketch basic elements of Stützel’s balance mechanics-based theory of business cycles, thereby moving from Levels 1 and 2 of our framework to laying out some basic concepts for levels 3 (intentional actors and their plans & expectations) and 5 (long cycles) of our model building project:
Adding to our own presentations, we created playlists on the most important core pillars of our approach to a new Paradigm (“New European Political Economics”): Legal Anthropology, Legal Institutionalism, Mechanics of Balances, comparative historical analysis of long cycles of development of the state, western civilization and modern capitalism.
Germany’s finance minister Wolfgang Schäuble and the former finance minister of Greece, Yanis Varoufakis, seemed to have never really understood each others views and positions. We are convinced one important reason for this is the lack of a shared paradigm that would be powerful enough to integrate both – seemingly entirely opposite – positions on economic policy in the Eurozone that Schäuble and Varoufakis each represent.
Perry Mehrling has written an excellent blog-entry entitled “Why is money difficult?” He points out 4 essential obstacles to understanding monetary economies he has encountered again and again in teaching his money and banking course over the years: (1) the alchemy of banking, (2) the essential hybridity of the monetary system, (3) the inherent hierarchy of credit and money, and (4) the inherent instability of credit.
Perry Mehrling has published a comment on UNCTAD’s 2015 Trade and Development Report, “Making the international financial architecture work for development“.
We agree with Mehrling that “the deep suspicion of financial development that is evident throughout the report might rather be considered part of the problem than part of the solution” and, as Mehrling is clearly aware of, monetary economies have to be closely monitored and managed by informed and wise fiscal and monetary policy. We add, however, that to create a monetary and financial infrastructure in developing countries, a reliable and strong state and legal infrastructure has to be created. It cannot be taken for granted, and to develop it is no small task. Continue reading “Financialization and Development: our comments on Perry Mehrling’s blog (by Nicolas and Wolfgang)”
The EU and the Eurozone are in deep crisis. So are orthodox and heterodox economics. While orthodox neoclassical economics have “no room for money” and nothing to say about financial crises and deflationary depressions, heterodox Post Keynesians do better in that regard but lack a shared paradigm. They also lack a systematic and precise legal foundation, without which the numerous institutional flaws of the Eurozone and the EU cannot be detected. Some Post Keynesians, notably Modern Monetary Theorists, notice the lack of sovereign taxing power at the Eurozone level. The lack of private (property and contract) law and a weak, patrimonial state infrastructure in general in parts of the southern periphery, Post Keynesians typically overlook. Only some neoclassical institutional economists perceive this, but they in turn typically overlook the lack of federal taxing power at the Eurozone level.
Some people admonish that a “political union” would have had to precede the monetary union, but what specifically a “political union” would entail – a federal european state holding the legitimate monopoly of force on european territory – is left in the dark. A precise comparative look at how such loose confederations of states historically arrived at federal unions is missing entirely, since both neoclassical and post keynesian economists work with abstract universalist models and show deliberate disinterest in history and the historical specificity of capitalism. Continue reading “Legal Institutionalism: The Public/Private Law dialectic, Accounting and Post Keynesian Monetary Macroeconomics”