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A Comment on “What Is Wrong with the West’s Economies?” by Edmund Phelps

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Abstract

Can one simultaneously have an economic system that is both vibrant and just? And, if so, is the current mainstream economic paradigm helping us achieve such a worthwhile goal? We argue that the notions of justice and economic vibrancy should not be discussed in isolation from one another. Also, any potential solution to this problem has to be dynamically consistent and take into the account changing nature of the world economy in which production and distribution of information and knowledge takes increasingly the center stage. This may require switching from solving mechanistic optimization problems prevalent in the main stream economics, to more complex approaches that explicitly take into the account both the role of institutional development and more complex ways in which economic decisions are actually made today.

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Notes

  1. The idea of the end of history has recently been popularized by Fukuyama in his famous book The End of History and the Last Man (2006), albeit with a very different conclusion from Marx.

  2. In technical terms, lexicographic preferences do not have continuous utility function representation and without continuity of preferences the proof of the existence of general equilibrium no longer works.

  3. Issues of global justice are discussed, among others, in Sen (2010).

References

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Authors and Affiliations

  1. Faculty of Economics, University of Belgrade and CESIfo Network, Belgrade, Serbia

    Branko Urošević

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  1. Branko Urošević
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Correspondence to Branko Urošević.

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Urošević, B. A Comment on “What Is Wrong with the West’s Economies?” by Edmund Phelps. Homo Oecon 33, 25–31 (2016). https://doi.org/10.1007/s41412-016-0010-7

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  • DOI: https://doi.org/10.1007/s41412-016-0010-7

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