The Political and Social Economics of Information: A Suggested Framework for Heterodox Economics

In the past thirty years interest has grown again among economists and others in the application of economic analysis to topics heretofore considered beyond their borders. Some of the work has been done by neo-classical economists, but it has not always been done well. Much of it has been done by economists critical of the standard neo-classical model from one direction or another. In either case, it is difficult to keep track of all the strands of analysis and where they fit together. Many have begun to call this movement ‘post-autistic economics’; I call it ‘political and social economics’. Regardless of the tradition followed, however, economists face at least two problems when they try to go interdisciplinary. One is how to adapt their theory to new situations where the original set of assumptions may fail to apply. This of course is a particular problem for neo-classical economists who carry what I refer to as the ‘default’ neo-classical model around in their heads: perfect competition, perfect information, perfect this, perfect that. This paper will provide a framework for keeping track of assumptions so they can be re-examined as necessary when doing interdisciplinary work. Ironically, the very narrowness of the default neo-classical model enables one to use it as a starting place -provided we then go somewhere. A second problem is how to take a theory designed for one discipline and turn it into something intelligible to practitioners of another. One needs a common language, and it will be argued that systems science in general, and general systems theory in particular, might help, even though they do not in themselves constitute a complete language or theoretical structure. A hot field in the public’s mind at the moment has been the information revolution, which of course has been going on a lot longer than the hype would imply. The information revolution has given rise to a number of different innovations in neo-classical economics, but heterodox approaches, particularly institutional economics, seem better fitted to the realities of the situation. Much of this paper is based on Gassler [2001, and forthcoming 2004]. The Political and Social Economics of Information: A Suggested Framework for Heterodox Economics