New Relational Paradigm

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Source of this paradigm comparison:

Paper for conference with the International Confederation of Associations for Pluralism in Economics (ICAPE) June 1-3 2007 at the University of Utah, Salt Lake City

Science, ideology and development. Is there a ‘Sustainability Economics’?. Peter Söderbaum. School of Business, Mälardalen University, Box 883, 72123 Västerås, Sweden


Comparisons

Aspects compared: Dominant perspectives Complementary or alternative perspectives
Theory of science; role of the scholar in society Positivism; expert standing outside Subjectivism, social constructivism, hermeneutics, contextualism; concerned scientist
Paradigms in economics Neoclassical Political approach to institutional economics
Ideological orientation ‘Business as usual’ interpretation of SD. Extreme market ideology; GDP-growth, reductionist ideas of efficiency, preference for privatisation (neo-liberalism) ‘Modernist’ or ‘radical’ interpretation of SD. Priority for Social, Health and Environmental (SHE-) aspects as part of a holistic judgement
Institutional arrangements Institutions that facilitate for ‘corporate globalization’ e.g. the present World Trade Organization (WTO) Subsidiarity principle; Local community development and local markets as starting points. A World SHE-organization “to handle trade disputes” at the global level.


Aspects compared: Dominant perspective (Positivism) Alternative perspectives (social constructivism, hermeneutics, narrative analysis etc.)
History History not important; mechanistic models History matters; evolutionary patterns, path dependence
Value issues Objectivity, value-neutrality Subjectivity matters; dealing with values and ideology in a conscious and open way
Field of inquiry and position in relation to it Standing outside observing events; traditional role as expert Entering into a dialogue of interactive learning with actors and interested parties
Purpose of study Looking for universal regularities Case studies, uniqueness, contextualism
Methodological guidelines and habits Quantification, optimal solutions e.g. the ‘monetary reductionism’ of CBA Illumination of options with respect to ideological orientation and impacts of alternatives; conditional conclusions e.g. disaggregated and ethically open study

in terms of Positional Analysis, PA

Decision-making Decisions essentially based on calculation by experts Matching ideological orientation of each decision-maker and expected impacts of each alternative; ‘appropriateness’, ‘pattern recognition’


Aspects compared: Economic Man Political Economic

Person (PEP)

History Not considered relevant The individual is a product of

her history and her relationships

to specific contexts; path dependence

Context Markets for products and factors of production Political, socio-cultural, institutional

(e.g. market), physical man-made, ecological

Roles Consumer, wage-earner Citizen, parent, professional, market-related roles etc.
Relationships Market relationships between selfish market actors Market and non-market relationships of a cooperative or non-cooperative kind
Values Maximum utility of commodities within budget constraint Ideological orientation as guiding principle e.g. ‘Green’ orientation
Behaviour Optimizing Habitual, ‘rule-following’, also learning and conscious choice (decisions); appropriateness, matching


Aspects compared: Profit-maximizing

firm

Political Economic

'Organization' (PEO)

History Not considered relevant The organization is a product of its history; path-dependence
Context Markets for products and factors of production Political, socio-cultural, institutional (e.g. market), physical man-made, ecological
Justification for existence Profits for shareholders Business concept, mission statement, ‘Core Values’, political ideology, ‘social responsibility’
View of individual Largely invisible Polycentric organization with individuals

as PEPs, guided by their ideological orientation

Relationships Internally: largely invisible, hierarchic

Externally: market relationships

Interaction (cooperative and

non-cooperative) between individuals as actors, internally and externally, market

and non-market

Interests related to corporation Consensus idea based on assumed shareholder values A complex of common and conflicting interests between stakeholder categories

and individuals as actors

Decision act Optimization: maximum profits Multidimensional impact studies, also rule following, matching ideology (mission statement) with expected impacts


Aspects compared: 'Neoclassical' perspective


'Institutional' perspective
History Not considered relevant Each market relationship has its

history that may or may not involve trust, commitments etc.

View of individual Economic Man Political Economic Person

as actor

View of organization Profit maximizing firm Political Economic Organization

as actor

Interaction between buyer and seller Supply and demand Multifaceted social relationship between potentially responsible market actors
Goods and services Homogeneity, one commodity at a time Also heterogeneity, multiple

commodities and transactions, multi-functionality in relation to many interests and stakeholders

Motives for transaction Profits or utility related to quantity and price (optimization) Ideological considerations ‘monetary price and beyond’ (matching)
Relations to other actors Emphasis on personal gain (Belief in ‘invisible hand’) Also inclusive (‘I & We Paradigm’, ‘Person in Community’)
Features of relationship Independence: contracts between parties with conflicting interests Also cooperation; considerations of trust and fairness