Main trends of research in the social and human ... - unesdoc - Unesco

3 I 2 Economics
economy - the study of relations between men - presents itself in the most direct
way, without reification.
c. Cybernetic meth0ds.5~ Except for restating, in cybernetic terms, the func-
tioning of the economy, not much has been done until recently. However, this
transcription is of considerable importance from two points of view: on the
basis of observed isomorphisms, it leads to a convergence between the natural
sciences and the human sciences; it also leads to a more precise formulation of
the analytical problems economists have to deal with in connexion with the
theory of the functioning of the economy.
It should be remembered, in conclusion, that the theory of the functioning of
the economy has many points of contact with politics, law, organization and
management, sociology, psychology, and social anthropology. Its further devel-
opment would be impossible without drawing on all of them, and without the
interdisciplinary device of introducing into the economic models parameters
which, for each of these disciplines, represent a variable. The theory of the
functioning of the economy aims at praxis: rational decision-making in a given
socio-economic system, with due regard to all the rules of praxiology.
2. The theory of growth
As indicated in the survey by Hahn and Matthews already referred to, there has
been an extraordinary proliferation of growth models in recent years; authors
of nearly all schools - neo-classical, neo-Keynesian, Marxist -have been build-
ing them.
This undoubtedly reflects a real preoccupation with one of the key problems
of modern economic life, one which will be considered in the final part of this
study. On the other hand, the theory of growth lends itself to a wide (and, at
times, wild) utilization of mathematical tools and formal exposition; this helps
to satisfy many economists who wish to be more scientific, even if it only means
dressing up old truths in new, complicated clothing. Once the principles of mod-
el building have been mastered, it is easy to produce new models by changing
some of the initial assumptions, or imparting a different mathematical presen-
tation to an old subject - the most spectacular short-cut to a doctorate in eco-
nomics in many universities. This has engendered some violent criticism of the
theory of growth as such. It has been pointed out that growth models are based
on over-simplified assumptions, that they lose touch with the complex realities
of economic life, that they cannot be directly applied in practice because they
postulate ‘Golden Age’ conditions, and so on. Such criticism can hardly be
regarded as generally valid, although it no doubt applies in many instances where
the growth model building is bad or superfluous.
At first sight, growth theories look very innocent. As it is investment which
gives the main impulse to economic growth, they explore what happens to the
national income when a given share of it is allocated to investment. If this share
is i, and the incremental capital-output ratio is m, it can be said, as a first
approximation, that the rate of growth of the national income r will be equal to
i/m. Behind the apparent simplicity of this result, however, many complicated
problems are concealed.