Over the past years, I have come across many students of economics who complain about the irrelevance of economics to understand practical issues. Among them, some go on to choose sociology, which is considered to be more practical and realistic. This post is for those who think that the dominant practice of economics is not done the right way. It is certainly possible to be a ‘social’ economist. In fact, this post is about ‘social’ economists and not about social economics, a distinct field in economics, which comprises economists who think ethics, values, philosophy, culture, etc are important.
Social economics/socio-economics/new social economics are emerging fields within economics whose central premise is that one cannot study an economy meaningfully without paying attention to social institutions, culture, beliefs, etc. It is disturbing to know that the practitioners of social economics, socio-economics and new social economics distinguish their work among themselves. This trend is largely because of the urge to be ‘pioneers’ in ’emerging’ areas in economics. The following extracts from The Elgar Companion to Social Economics shows this clash of identity:
‘The association that promotes socio-economics, the Society for’ the Advancement of Socio-economics (SASE) advertises itself rightly as’ an interdisciplinary organization. In recent years, socio-economists have’ increasingly used insights from biology, in addition to psychology and sociology.’
‘The association that promotes social economics, the’ Association for Social Economics (ASE), presents itself as a pluralistic’ organization that emphasizes the role of social values and social relationships in economics. Social economists have a variety of additional orientations, including institutionalism, Marxism, feminism, post-Keynesian,’ Kantianism, solidarism, neo-Schumpeterian, environmentalism and’ cooperativism. ‘
‘There is also a quite recent literature termed the ‘new social economics‘,’ which begins with market relationships, and then seeks to add ‘non-economic’ social content to their analysis. That is, rather than embed the’ economy in social relationships, these more recent contributions seek to’ embed social relationships in the market. ‘
In any case, these emergent fields indicate a dissatisfaction with the dominant economics profession. However, in their haste to carve out a separate field, the essentials are often lost. The adjective social prefixed to economics indicates the existence of an economy which cannot be clearly demarcated from the society in any clear fashion. Moreover, this usage also emphasises the role of how society is organised. The following are some questions pertaining to the economic aspects: Are the people motivated by reason’ To what extent does profits motivate entrepreneurs’ On what basis are people employed ‘ caste, gender, religion, academic qualification, political connections, bribes, region’ Can we visualise distinct social classes in the economy based on their ownership of land’ What are the sort of interactions which take place between agricultural, manufacturing and service sectors’ How is finance organised in the country’ How important are informal sources of finance’ Does labour laws apply to all sorts of employment’ How does the government intervene in domestic production and consumption of commodities are services’ What sorts of price and quantity controls exist’ These are some of the questions which aid in understanding how the economic aspects of a society are organised.
Today, economists are asked for their opinion/advice on matters pertaining to financial crises, foreign exchange constraints, poverty, unemployment, inflation, rural development, etc. Only an economist who is reasonably aware of how the society is actually organised will be able to devise strategies and chart plans which can effectively tackle these economic issues. A ‘social’ economist is one who understands the complexity of social studies in general and of economics in particular. In addition, she will always resist the temptation to think in atomistic terms and will resist universal solutions. She will also be aware of the significance of non-market transactions.
Even if the dominant form of economics teaching and research is asocial, the academic enterprise of economics does give space to alternative approaches. However, one must be careful because some of these approaches appear ‘social’ but are in fact static and atomistic. A reading of Adam Smith, the father of economics, easily points to the role and significance of social values and institutions. It is for this reason that we need to return to classical economics, where, as one of the earlier posts argued, economics is’ the study of commodities; but their economic analysis can easily incorporate social values and institutions as well.