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Social limits to economic theory. By JON MULBERG. London and New York: Routledge, 1995. Pp. x, 200. $19.95, paper. ISBN 0-41509298-1, cloth; 0-415-12386-0, pbk. JEL 96-0455
Economics is often criticized as being unrealistic and incapable of dealing with pressing social problems like poverty and environmental degradation. This book seeks to critically examine the limitations and contradictions of economic theory and to consider the prospects for alternative approaches in dealing with such social problems. It argues that orthodox economics, despite its official methodology of positivism, is in fact a political discipline with laissez-faire as its inherent political theory. This is found to be contradictory, however, because the positivist philosophy actually tends toward economic planning. Reviewing different positions in the history and philosophy of economics, the book argues that market exchange mechanisms are useful but need to be initiated, supported, and controlled by the society and the polity.
The book starts with a brief "Introduction and Overview," which documents the selfcriticisms of economists by some of the leading practitioners and presents the main arguments of the book. Chapter 1, "The Politics of Positive Economics," discusses the contradictions of positivist philosophy and their effects on economics. In particular, relying on Myrdal's arguments made in the 1930s, Mulberg attempts to show the difficulties of positivism in squaring with laissez-faire. He also examines methodological debates in the...