Ronald Coase won a Nobel prize in economics for inventing the idea of transaction costs in his famous paper "The nature of the firm" (1937). He has just announced his desire, with Ning Wang, to found a new journal called "Man and the economy". Their manifesto, "Saving economics from the economists", was published in the Harvard Business Review for December 2012. Coase argues there that "The degree to which economics is isolated from the ordinary business of life is extraordinary and unfortunate...In the 20th century, economists could afford to write exclusively for one another. At the same time, the field experienced a paradigm shift, gradually identifying itself as a theoretical approach of economization and giving up the real-world economy as its subject matter. This separation of economics from the working economy has severely damaged both the business community and the academic discipline. ".
He continues, "Economics thus becomes a convenient instrument the state uses to manage the economy, rather than a tool the public turns to for enlightenment about how the economy operates. But because it is no longer firmly grounded in systematic empirical investigation of the working of the economy, it is hardly up to the task....The reduction of economics to price theory is troubling enough. It is suicidal for the field to slide into a hard science of choice, ignoring the influences of society, history, culture, and politics on the working of the economy. It is time to reengage the severely impoverished field of economics with the economy. Market economies springing up in The human economy idea
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The human economy idea [view whole blog post ]
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