[lbo-talk] Noam goes with Barry ?

Wojtek S wsoko52 at gmail.com
Sat Mar 17 14:52:06 PDT 2012


[WS:] That is one possible interpretation, but the theory itself does not necessarily postulate this. Its main mechanism is transaction cost, so if transaction cost to benefit balance is radically altered, a radical change is not only possible but also likely.

Another observation - a formulation of "path dependence" can be found in Karl Marx's "18th brumaire" Of course, he did not develop probability models, like Arthur did, but the concept is there. Here is the relevant quote: "Men make their own history, but they do not make it as they please; they do not make it under self-selected circumstances, but under circumstances existing already, given and transmitted from the past. The tradition of all dead generations weighs like a nightmare on the brains of the living. And just as they seem to be occupied with revolutionizing themselves and things, creating something that did not exist before, precisely in such epochs of revolutionary crisis they anxiously conjure up the spirits of the past to their service, borrowing from them names, battle slogans, and costumes in order to present this new scene in world history in time-honored disguise and borrowed language. Thus Luther put on the mask of the Apostle Paul, the Revolution of 1789-1814 draped itself alternately in the guise of the Roman Republic and the Roman Empire, and the Revolution of 1848 knew nothing better to do than to parody, now 1789, now the revolutionary tradition of 1793-95. In like manner, the beginner who has learned a new language always translates it back into his mother tongue, but he assimilates the spirit of the new language and expresses himself freely in it only when he moves in it without recalling the old and when he forgets his native tongue." http://www.marxists.org/archive/marx/works/1852/18th-brumaire/ch01.htm

Wojtek

On Sat, Mar 17, 2012 at 4:22 PM, Marv Gandall <marvgand at gmail.com> wrote:
>
> On 2012-03-17, at 12:04 PM, Wojtek S wrote:
>
>> Marv: "Briefly, and in plain English, in what way does "path
>> dependence" theory, which I find very abstruse and jargon-ridden like
>> much contemporary economic and sociological theory, contribute to your
>> understanding?"
>>
>> […]
>>
>> Similar arguments were used to explain national economic development
>> to counter "designer capitalism" approach popular in the 1990s. The
>> argument was that wholesale transfer of neoliberal markets to former
>> socialist economies would not work because of "path dependence" on
>> institutional solutions developed under socialism, and an approach
>> that favors slow transformation of the existing institutions instead
>> of 'shock therapy" is more likely to be effective.  Needless to say
>> that the 20 years of recent history proved the path dependence
>> approach right and the shock therapy squarely wrong.   Another
>> macro-institutional application of this theory is the development of
>> social welfare systems that depend on already existing solutions (e.g.
>> the "pillarized" by religious affiliation educational and social
>> welfare services in the Netherlands that in the 20th century were used
>> to deliver government social welfare services.)
>
> I agree about the shock therapy, don't know enough about the Dutch example. "Path dependence" strikes me as a fashionable academic restatement of conservative (and social democratic) theory: that revolutionary change which abruptly uproots deeply entrenched cultural and social arrangements is apt to be destructive, and that progress is necessarily slow and incremental. That's certainly true in some circumstances - the "dead hand of the past" always has to be taken into account - but it's not a universal law, which is what seems to be implied. The nature and tempo of change appropriate to a specific set of circumstances only becomes apparent in retrospect, when it becomes clear whether it was precisely correct or too catastrophically radical ("adventurist") or catastrophically timid ("opportunist").
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-- Wojtek http://wsokol.blogspot.com/



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