Editing Economics

Professor Geoffrey Harcourt, Hank Lim, Ungsuh K. Park, Professor Geoffrey Harcourt, Hank Lim, Ungsuh K. Park

• Publisher: Routledge
• Year: 2001
• ISBN:
  9781134518593
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

Mark Perlman was the founding editor of the Journal of Economic Literature and responsible for issues from 1969 until 1980 when he retired. He has also written and edited a number of books and articles, concentrating on aspects of the labour market, population growth, health economics, the environment and the history of economics. His extraordinari

Part I: An evaluation of Mark Perlman’s written contributions

1 The participant observer in the formation of economic thought: Summa Oeconomiae Perlmanensis

Kurt Dopfer*

The book¹ that is the subject of this essay is an extraordinary one indeed, and it provides the reviewer with the pleasurable task of presenting reasons why it can, should and must be recommended.

Mark Perlman offers us a 503-page collection of twenty-five previously published essays. In rough outline, the book comprises three parts (1) ‘On Economic Literature and Literary Economics’ (pp. 35–59), (2) ‘History of Economic Thought’ (pp. 63–380) and (3) ‘Labor Problems and Institutions’ (pp. 383–503). The core of this work – 63 per cent of the text – is the second part, which is further subdivided into the broad categories of ‘General Essays’, ‘Essays in American Institutionalism’ and ‘Essays in Biography’. The general arrangement of Part 2 corresponds to an in-depth treatment of the analysis of economic problems, which Perlman uses to bring into focus these three facets: history of economic theory, comparative economic analysis, and contextual (e.g. biographic) analysis. This approach runs like an analytic fractal throughout the book.

The individual articles are well-written, providing a wealth of information one may use to fill gaps in a library devoted to such topics. One can compensate for possible duplication of effort by merely reaching into the bookcase (at $79.50) for the Summa Oeconomiae Perlmanensis. One could recommend the book on this basis alone.

The Character of Economic Thought then differs from similar efforts in that its contributions have unusual interdisciplinary depth, but still do not suffer from a lack of eclecticism. The individual portions do not combine to form a total picture, but they do form many original configurations which provide the reader with new relationships and interpretations. In fashioning this mosaic, Perlman uses the method of comparative analysis. While not quite new, this approach lets Perlman fulfill in a most exemplary manner the need for simultaneous differentiation and generalization of the material. If for no other reason, this characteristic alone should recommend it to the reader.

There is also, however, another reason for recommending the book, one having to do with historical perspective. The essays included were written over a span of forty years. While one could argue that the range of articles from which one can choose, other things being equal, is correspondingly greater given a longer time span (which gives a kind of selective advantage), the quality of Perlman’s oeuvre does not require that kind of preselection. The distinctive perspective of this book is that, while its treatment of the ‘history of economic thought’ is wide ranging, its predominant emphasis is on its links to the present. One could contend that this is merely a comparative analysis of theories and not of history, since history by definition lies in the past. But what does ‘past’ mean? Perlman’s opus is a tour de force which, by its unconventional treatment of the history of economic thought, forces us to reconsider the analytic perspective of this branch.

History of economic thought: the role of the participant observer reconsidered

Perlman’s presentation prompts us to divide economic theories into those of economists who (1) died long ago, (2) died recently and (3) are still living. The sole criterion for distinguishing between the three is the manner of participation in the process of observation or analysis. Category (1) deals with economists whom we know only from statues and copper engravings. Metaphorically, these media reflect the great distance between ourselves and these economic thinkers. They lived ‘in their time’, in a completely different socioeconomic and technical-cultural environment, and it requires a special effort of imagination to comprehend their roles as human beings and as scientists. We can attempt to interpret the environment that gave rise to their theories, and in which they achieved their purpose; but in the true sense of the word, we cannot understand them: there is no Verstehen involved. The epistemological situation is similar to that of the ethnologists who explored the Tobrianders or other populations which, for them, were exotic: they approached this task with methods suitable for reducing a deficit in their understanding. The observer cannot ‘participate’, since here both space and time are remote and alien.

The participant observer, on the other hand, works with material that can be genuinely understood and this understanding presents itself as a possible method for analysis. The concept of the participant observer is borrowed from physics where it is mainly related to the phenomenon that, under certain experimental conditions, the observer influences the observation; methodological discussions sometimes refer to an analogous ‘fuzziness’ in the observation of economic phenomena. The economist who takes part in the ‘experiment’ of contemporary history of economic thought is, however, a participant observer in a far more radical and immediately insightful sense. He is not connected to the object of his perceptions on some subatomic level, but rather on the basis of multifarious and complex social interactions; it is not a matter only of relationships between forces, but rather between ideas. In his status as observer, the economist differs from the physicist in that the observation is not (primarily) defined by the experimental measurement equipment, but rather by psycho-cognitive disposition. The person is thus an observer in a genuine perceptual and cognitive sense, and the result of the observation depends significantly not only on the objective and instrumental equipment and method, but on the subjectivity of the cognitive apparatus of the observer. In this connection, it is important to recognize that the biography of the observer constitutes a significant determinant of the process of observation and of its results.

Autobiography: on the superego of a participant observer

We do not need to inquire as to Perlman’s motivations for beginning his book with a detailed autobiography and why, again and again, autobiographical elements make their way into the analytic arguments. Suffice it to note that autobiography also makes an epistemological statement and that in the present case we also learn something about Mark Perlman — the participant observer. The first striking feature in his autobiography is the extraordinary relationship with his father:

In my boyhood I must have spent a minimum of three hours each week in one-on-one sessions listening to him discussing the way as well as the substance of how he interpreted events. It was an overwhelming, if European-Jewish-style, intellectual relationship — a brilliant father and an admiring son; and neither ever forgot who was the father and who was the student.

(p. 2)

The reader cannot fail to find this close relationship touching; it runs like a thread through the whole work. We can but assume that Sigmund Freud would derive unalloyed pleasure from so clear a confirmation of his thesis of the superego. Perlman further followed in the footsteps of his father in choosing economics as a scientific discipline, by the choice of his research area — as the history of economic thought of type (3) — and by his choice of specific research foci, on the analysis of the labor movement, labor unions, labor history, community values, labor arbitration and related organizational and institutional issues. The effect of a superego shows up most obviously in the countervailing forces which must be marshalled in order to eliminate effects perceived as disadvantageous. Perlman is surely aware that here we deal with a general phenomenon, as indicated in his reference to one of the greats in the history of economic thought:

... John Stuart Mill came to regard his father’s domination of his mind with anger and repugnance. I was clearly far less prescient than the younger Mill, and all that I can truly say is that I was well into my late thirties before I even began to realize that, unlike his explanation of external events, my father’s interpretation of personal events was not necessarily to be my own. Unlike John Stuart Mill, I was never strong enough in mind to be able to detach myself that completely from the impact of my father’s influence.

(p. 3)

Perlman’s autobiography prompts the general consideration of what effects the existence or particular kind of superego has on the analysis of a participant observer in economics. In Freud’s original concept, superego stands for the transmission of norms and rules by a father figure, which is the actual father in the first phase of the biography, and emerges as society later on. The father figure of the first phase appears as an intermediary who also conveys societal norms and rules. This formation of ego is a part of the process of socialization, but, in contrast to conscious learning, it occurs mostly subconsciously and is therefore possibly more firmly implanted in the deeper psycho-cognitive strata. An immediate and fascinating question would be the effect of the personal superego – let us call it α-superego – on the research work of a participant observer. Suffice it to note at this point that Perlman’s biography provides valuable inductive building blocks for such a generalization.

More important for the present topic is the question of whether in one’s intellectual life there does not also exist an intellectual superego – let us call it β-superego. It would be implausible to assume that the psychic mechanism of childhood does not also work in adult life if analogous conditions exist. A young person entering academia relives his childhood a second time, encountering superegos in the form of father figures as professors and established scientists. The imparted ideas exercise an authority much like the norms of childhood education. On this level, the participant observer runs through the formative years of an intellectual childhood, and his later creations are more or less noticeably affected by the superego formed in this early intellectual phase. The formation of the α-and β-superego can take place hand in hand, if the personal and the intellectual father figure happen to coincide. Consciously or unconsciously, the father–child relationship becomes a ‘father–student’ relationship.

The psycho-cognitive formation of the β-superego is not, however, primarily a matter of rules and norms of conduct as in the case of the α-superego, but rather one of cognitive content. Perlman’s essays about his experience in university administration and as a journal editor do indicate that, as in ordinary life, such behavioral norms in academia indeed are effective. The more basic question is, however, whether scientific notions (such things as theories, for instance) establish themselves as superegos. Because of their inherent power of persuasion, ideas often exercise a ‘natural’ authority over those who hold them. However, an idea which affects a person as a superego, is independent of this kind of authority; it requires no support. Beyond their content, ideas derive their strength only from being the result of a specific psycho-cognitive process of formation. The concept of such an effective formative-context includes the ‘visible colleges’ – instructional and research institutions and universities – as well as the ‘invisible colleges’ – scientific paradigms, research programs, and theories.

The historical entry of an idea into a formative context has critical significance for its strength. Other things being equal, an idea A is only superior to an idea B because it appeared at the onset of a psycho-cognitive process of formation and was able, in the course of this process, to usurp the role of superego in the thinking of the person involved. In the present case, it played a role in the intellectual formation of the author that he attended the Universities of Wisconsin and Columbia and not, say, those of London or Vienna, and that early on he came into contact with the paradigm of American Institutionalism of the Veblen-Commons-Mitchell type and had less of a connection with neoclassical orthodoxy. In this connection, the author’s remark may prove instructive that Mitchell entitled his usual lectures at Columbia University ‘Formative Types of Economic Thinking’: ‘Mitchell even came to a conclusion that economic theory as we teach it (a mass of abstract principles) was mostly the abstract idiosyncratic statements made by the Fathers of the Profession.’ (p. 129, emphasis K. D.).

With an eye on an approach that purports to explain scientific progress, we can conclude from the above that scientists do not choose or test paradigms and research programs on the basis of an a priori rational calculus. Rather, this process and way of thinking are fundamentally contingent on the circumstances of where and when an individual was exposed to the intellectual force of a scientific idea, and which personalities assumed the role of father figures in the course of intellectual formation. Perlman largely eschews the treatment of methodological questions; the discussions of scientific paradigms and research programs that have had a renaissance in the last few years hardly come into focus in his work. The author’s main inclination is to write a history of economic thought of type (3). However, as he does so, he implicitly suggests a reappraisal of the status of the observer – no small contribution to current methodological discussions.

Learning and Wanderjahre: on the dynamics of theory formation

Perlman wrote his dissertation on ‘Australian Labor Relations’ along the lines of his studies of labor relations and courses on judicial review of the legislative process (p. 6). This first work already contains the two characteristics of the author’s theoretical creations: an interdisciplinary treatment and the identification of links between theory and factual evidence. The empirical part included not only a reading course on Australian history, but, above all, interviews of judges and legislators in order to determine the workings of the arbitration tribunals. His doctoral committee included George J. Stigler, but the candidate remembers the remark of a historian who said: ‘Perlman, you write in the tradition of Adam Smith, but not as well,’ and the help he got from a political scientist who replied: ‘Yes, he also writes in the language of Shakespeare, but not nearly so well.’ The quotation is an example of the wit and irony that suffuses the text.

The whole third part of the book is dedicated to ‘Labor Problems and Institutions’ and, in Chapters 20 and 21 he presents the most important general and special theories of the American labor movement. The two chapters differ from others in their detailed discussion of aspects of causality, and especially of the link between economic-political desiderata and their possible consequences. A further part in Chapters 22–25 comprises historical or empirical analyses. Interestingly enough, the last article, on ‘An Analytical Theory of Australian Labor Arbitration’ falls into the part entitled ‘Labor History’ (pp. 419–503).

After his doctorate and a first teaching appointment at the University of Hawaii, the author spent three years at Cornell University, a period which brought him little inspiration in teaching, but which led to his second book, ‘Theories of Labor Unionism’. Perlman also utilized this experience creatively, in that he introduced Gierke’s idea of the Genossenschaft (translated as ‘fellowship’ or ‘brotherhood’) into the discussion of his situation (pp. 11–12).

The author spent the following years at John Hopkins University, in a Genossenschaft that brought ‘intellectual guidance’ and ‘personal-professional friendships’ and made him a devotee of ‘two quite different men, both historical luminaries: Fritz Machlup and Simon Kuznets’ (p. 13). With Machlup, Perlman completed his formative studies on ‘Austrian Economics’, which left theoretical and also methodological traces: ‘Machlup was a Hayekian, and like Hayek he had his own reservations about economic theory as “scientism” ’ (p. 13). Hayek’s concepts are further discussed in a chapter on ‘Hayek, Purposes of the Economic Market and Institutionalist Traditions’ where his notion that the primary purpose of the market is the exchange of information is counterposed to the ideas of institutionalists such as J. M. Clark, Ronald Coase and John R. Commons: ‘Their resulting insights were similar; what differed were their philosophical foundations – Hayek’s was Kantian; the others’ were Hegelian’. (p. 254).

The influence of Kuznets was overwhelming and, as an economist of category (3) in Perlman’s history of thought, he acquires truly herculean stature because he ‘did measurably more to shape the world’s destiny before and during World War II than any economist in history has ever done. Men like Smith, Malthus and Keynes did much to shape ideas; but Kuznets truly caused epochal history’ (p. 14). In Chapter 17, ‘An Economic Historian’s Economist: Remembering Simon Kuznets’, coauthored with Vibha Kapuria-Foreman, the authors, following the aforementioned mode of analysis, first present the biographical stages of the ‘paternalistic legacy’ of Kuznets, and then proceed with an analysis of his contributions to economic growth, national income accounts, measurement of capital formation, and demographic economics. The latter area of research was to occupy Perlman again and again, and this established a link with the work of Harvey Leibenstein, a subject he treats in Chapter 19. This chapter too demonstrates the ‘in-depth structure’ of analysis, in that he begins with a section on ‘The Legacy of his Training’ followed by one on ‘His Taste for Economic Theorizing’ and ‘His Taste for Observational Generalizing Close to the Level of Fact’ (pp. 361–80).

Johns Hopkins, however, also offered the author possibilities for empirical research. Perlman became a member of a team put together in 1953–60 to evaluate the reports of the US-Brazilian Agency the task of which was the furtherance of public health with special emphasis on preventive medical care. Perlman’s activities within this project were not merely along the lines of his theoretical interests; in the course of his travels to Brazil he acquired abundant empirical insights. The results of this stay were numerous articles and the editing of three books in the area of health economics.

Schumpeterian vs institutional thinking

The special theoretical insight of the Brazilian adventure was that ‘broader economic questions like when and how to invest in public health, particularly in disease prevention facilities’ were more important than ‘the popular question of how to improve health care delivery’ (p. 15). His general theoretical conclusion was that economists had not treated the ‘mechanism of economic growth’ concretely enough and that ‘from a macro standpoint almost anything could be considered abstractly as either a simple, fixed or variable factor’ (p. 15, emphasis in original). Adopting a theoretical perspective in the tradition of institutional analysis, Perlman maintains

that studying the economic process required a set of foci o...