Towards a New Economics: Critical Essays on Ecology, Distribution and Other Themes.

Kenneth Boulding, a great economist, and perhaps the foremost social scientist of this century, in this capstone work, has served us a delightful platter of thoughts, ideas, insights and analysis from his enormous lifetime contributions. It has always been a mystery to me and to many others familiar with his wide ranging and path breaking contributions to economics and other social sciences, why the Nobel committee denied him the ultimate award the profession can bestow, one that he so richly deserved. This book strengthens my view that no other contemporary social scientist with the possible exception of Herbert Simon and Georgescu-Roegen have made comparable contributions to such a wide range of disciplines.

The following statement, coming from an author whose lifetime publications include over 1,000 articles, over 500 book reviews and several important books, is significant: "In many ways the decade of the 1980s was the most productive decade of my life, and these articles are an excellent sample of my work of those years. . . . The present volume, however, brings together various facets of my thinking in this period in a unique way, particularly those related to economics but also expanding into the more economic aspects of war and peace".

This book, which may be treated as the seventh volume of the published works of this prolific social scientist (the first six volumes published by the Colorado Associated University Press are out of print), contains 22 essays on at least 125 different themes on a wide variety of issues--from price theory and marxism to water problems, ecology, ethics, peace and human betterment. These essays are organized into five parts. The first essay in Part 1 is a fascinating bibliographical autobiography. It is a must reading for anyone who is thinking of becoming an academic and for others who wish to know more about the life and works of this remarkable man.

The broader themes in the essays include (1) the view that the world should be studied as a total system, (2) the importance of grants as one-way transfers in the economy, (3) the critique of the traditional "cookbook" theory of production, and (4) the description and analysis of the "generic" theory of production--that all products begin in some genetic structure of "know-how," and this know-how in turn has to be able to draw on energy, materials, space and time, all scarce factors, where the most limiting factor is the most important. Other more specific themes include: an attempt to clear up the confusion between stocks and flows using a demographic model of living organisms; the importance and dangers of false taxonomies; the importance of identifying pathologies of various systems; how the development of nuclear warheads has rendered obsolete conventional concepts of national defence and war; the K-theory (Keynes, Kelecki and Kenneth), which focusses on the distribution of national income between profits, interests and wages; the relevance of gap between profit and interest; and many more gems.

Given the limited space available for this review, I am compelled to focus my comments on a few of these themes. Boulding, the critic, is well known. Even though he presided over the American Economic Association for a term, Boulding has always been somewhat of an outsider and a critic, first deciding he had better things to do than getting a Ph.D, then studying in Chicago under Frank Knight, finally turning his Chicago School training upside down as a lifetime critic of marginalism, markets and neoclassical mathematical economic theory. In some sense, the gist of the message in this last testament of this (heretic?) prophet is to be found in the fifth chapter (Part 2), "What went wrong with economics?" I will concentrate on this chapter hoping the reader will become sufficiently interested in Boulding's insightful and controversial views to conclude that the benefits of reading the book exceed the costs.

He writes: "A very interesting epistemological question is the role of mathematics and quantification in different fields of inquiry. . . For each field of inquiry, there tends to be an appropriate mathematics, and I would certainly argue that the use of mathematics in economics has involved a type of mathematics mostly from the seventeenth and eighteenth centuries, which is not very appropriate to the field of inquiry . . . In conventional algebra minus minus is plus. In social systems, not doing harm is very different from doing good". He also points out (Georgescu-Roegen, another sophisticated critic of the indiscriminate mathematization of economics also has written on some of these issues): when an economic variable (such as GNP) is expressed numerically, it "reduces" complex structures into simple one-dimensional numbers. This may be useful but the practice has great potential for misinterpretation and abuse that are largely unappreciated. He agrees with Keynes that economics is basically an evolutionary science unlike Newtonian mechanics. Both Adam Smith and Malthus were evolutionary thinkers. Unfortunately, Ricardo's influence was so great that academic economics was shunted into the wrong path, a dead end, where today the nonexistent concept of equilibrium reigns supreme. These and other criticisms of the misuse of mathematics are not new. His review of Samuelson's Foundations, published in 1948 in the Journal of Political Economy, shows remarkable clairvoyance in pointing out the many deficiencies of this methodology that have come to plague the discipline today. Who is to be blamed for this crisis in economics? He writes: "Perhaps the real villain is the discovery of seventeenth century mathematics some 200 years late by Cournot, Jevons, and most of all, Walrus, whose elegance and brilliance set economics on a path that increasingly has become a dead end". I once had the opportunity to ask him, "Did mathematics ever serve you in your own work?" His reply: "The number of propositions, certainly about social systems, which can only be reached with the aid of mathematics, is quite small. I can only think of two or three in my own work".

In Part 3 (The Grants Economy) Boulding presents three essays in an area of economics that he pretty much pioneered and developed. He defines grants as "one-way transfer of economic goods which affects the redistribution of the net worth of the parties involved". Boulding goes on to discuss many interesting "pathologies" of the grants economy that seem to entangle our economic life and yet are hardly noticed by most of us. Part 4 (International Economic Relations) may be the most interesting chapters to the new Boulding reader with four essays on conflict and defense. Boulding, a pacifist all his life, dismisses the argument that there are positive externalities from the enormous defense spending: "if we want ploughshares, it is much better to make them directly". The final part of the book (Part 5: Ecological Economics) develops interesting ideas on topics such as energy, economic development, cybernetics, human betterment and many more. The essay on human betterment should especially appeal to institutional economists.

The only shortcoming of this wonderful book on economics and philosophy that I can think of is the paucity of references to the works of other twentieth century authors. This maybe Boulding's way of saying that in his view nothing significant has been added to economic science in the present century.

Now that Kenneth Boulding is no longer with us, it is especially important for the profession, to rediscover his wisdom and insights. What better place to start than his last book? I strongly urge all students of economics, especially graduate students looking for a dissertation topic in political economy and in the many applications of economics to social sciences to carefully study this last treatise from one of the few great philosopher economist of this century. The Boulding style of writing--fast paced and humorous--makes the book all the more enjoyable.

Munir Quddus University of Southern Indiana