Introduction
Alessandro Roncaglia has given us fundamental reflections on the methodological and conceptual canons that should be the cornerstones of a realistic (and at the same time, stylized) vision of how the capitalist economy behaves.1 Roncaglia has taught us that reconstructing the political economy on alternative methodological assumptions—in a direction opposite to the dominant neoclassical vision—involves an interpretation of history, and also of the present as history.
Of course, not all of its branches or issues can be treated as a part of a comprehensive “model,” as Roncaglia frequently states. Optics that do well in one field may not be as good in another; each branch also has its technical specificity. The reconstruction can take place even in separate pieces, and can involve retrieving and updating what, of precious developed writings, one finds scattered in the critical literature on economic and social sciences. But what is important is that the methodological and epistemological apparatus maintains a uniform inspiration as well as should remain the points of reference of the analytical approach.In what follows I devote my attention to some basic points of setting an alternative vision, knowing that on so much Roncaglia and I agree in full, but that there are minor distinctions between us. [2]
In complex systems, the whole is more than the sum of its parts. Although the representation of a society and an economy’s aggregate behavior cannot ignore their components (not only individual actors but also collective and institutional ones), the interaction of these components results in an outcome that is not predictable from the parts themselves and not necessarily inferable from them. This is the opposite of the mainstream idea that the system can be observed from the standpoint of the representative agent.2
Despite this complexity, it is always possible to establish macroeconomic relationships of cause and effect in a rigorous academic framework or to draw a theoretical framework for state action.
It would be a mistake to leave to mainstream economics the power of generalized abstraction. As economists deal with the inborn dynamism of the production and social system, the most appropriate abstraction for them is extracting—in the specific process under analysis—the causal chains relating to the dominant forces at work and conjecturing about the strength of forces and counterforces (and contingent circumstances) that determines which would prevail. This then entails the necessity of putting in a logical sequence (short) chains of cause-effect relationships that can capture the points of tension (or friction or imbalance) and reduce the analysis to a core of simplified propositions, which are compact and logically solid. Following general interdependencies (and seeking their equilibrium) only obfuscates the hierarchy of processes. Pretending to move relations mechanically (even to the ultimate consequences) leads to losing sight of the fact that the material that economists deal with is not constant, homogeneous, or stable, and cannot be reduced to parametric determinations.The cause-effect sequences placed at the center of a representation of any single macroeconomic process can be nothing but abstractions drawn from the wide empirical knowledge of a reality that demands to be known and studied in detail (and that is the background of all single conjectures), without necessarily being a bare transposition of that reality. That empirical world, however, burst back onto the scene since the plausibility of a theory (and its lifeblood) rests on how many microeconomic phenomena that theory crosses, or manages to encompass within it or gives an account of, once confronted with a complex and differentiated society. This is the only test of a theory.3 “The master-economist,” writes Keynes, “must possess a rare combination of gift. He must contemplate the particular in terms of the general and touch abstract and concrete in the same flight of thought.”[3] Therefore, a sensible alternative economic theory can only be based on the study of actual social interactions, markets, specific situations, and institutions and also rely on studies in the field, case studies, and even on significant anecdotal evidence.
It cannot but be, in essence, inductive and empirically oriented (much like the dominant thought is axiomatic and deductive), even in the awareness that a work of synthesis and abstraction must follow from it. Such a work must be aimed at reconstructing the order of phenomena or their internal engine, taking into account that many microrelationships change in perspective at the aggregate level. It is unlikely that a deterministic configuration is the right frame for this synthesis.[4] Among the underlying forces considered in any specific theorizing, those relating to social structure and collective action, to institutions and distribution of income, to wealth and power are of key importance in the economic dynamics. Social identities forge economic choices. This means that the economy should be a tributary to sociology, political science, history, and law as well as the behavioral sciences (which do not support the hypothesis of full rationality and exclusive utilitarianism).3.