Abstract
Economics in the early 20th Century established distributive justice as the marginal productivity theory of income distribution. As the system has evolved, however, the distributive principle has been lost as a result of the structural change of the production process. Faced with “casino capitalism” or the “winner-take-all” society, instead of the classic distributive justice, a lottery system dominates income distribution. Orthodox economics prefers a set of particular rationalities, e.g., the so-called game theoretic views, instead of the general rationality. These particular rationalities are examined in some detail and their failures are argued. Rationality, either in general or in a particular form, is not to be regarded as a panacea in the complex socio-economic system.
This paper proposes the use of the utilitarianism of heterogeneous interacting agents. This new utilitarianism may easily be applied to the transition rates of the master equations, i.e., the probabilistic Markov process. Furthermore, a new method to reconstruct economic science is also suggested: constructing methods derived directly from new ideas in statistical physics and combinatorial stochastic process.
In sum, individualistic rationality must be replaced with the utilitarianism of heterogeneous interacting agents. In this new framework, solidarity formation among the heterogeneous interacting agents should be the most important matter. Finally, a deeper consideration on the utilitarianism of heterogeneous agents is explored.
This paper is mainly based on the paper “Evolution der Sittenlehre über Wirtschaftliche Rationalität im Komplexen Sozialsystem” presented at 3. Wissenschaftliches Symposium, Deutsch-Japanische Gesselschaft für integrative Wissenschaft, Montag, 30. Oktober 2006, Museum Koenig, Bonn, though this is not the same in is contents. The author is very grateful for Abt Nissho Takeuchi, the German–Japan Society for Integrative Science, Bonn, and the Daiseion-ji, Wipperfürth for generous permission of this material.
Reprinted from Evolutionary and Institutional Economics Review 4(2), Aruka, Y., The Evolution of Moral Science: Economic Rationality in the Complex Social System, 217–237 (2009). With kind permission from Japan Association for Evolutionary Economics, Tokyo.
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Notes
- 1.
The Pareto criterion originally implied that the personal welfare of every agent must not be impaired absolutely.
- 2.
Core is defined as a Pareto optimum within the area of being at least no worse than the initial welfare level.
- 3.
Arthur (1996) depicted this capitalism vividly.
- 4.
Casino capitalism should bring on the “winner-take-all society” if we focus on the distribution side. See Frank and Cook (1995).
- 5.
In the classic case, we called the irreproducible factors like labor or land the factors of production. In modern services production, the concept of labor may evolve.
- 6.
As for the perversities of the joint production, see Schefold (1989). Many orthodox professional economic theorists have made efforts to generalize the mathematical conditions to contain the non-convexity of production and consumption, without paying attention to the possibility of the distributive justice of production.
- 7.
This principle is active in a choice under uncertainty. We take an example of toads croaking. We suppose that the threshold pitch of croaking is set at 6.0, the lowest at 0, the highest at 10. “If only those toads with a pitch below 6.0 bother to croak, toads who remain silent reveal that their pitch is, on the average, significantly higher than 6.0”(Frank 2003, p. 202).
- 8.
See Holland (1992, Chap. 5). It no longer has the aesthetic beauty of dual principles of cost minimization and utility maximization.
- 9.
See Aoki and Yoshikawa (2006).
- 10.
In our example, we set ε = 0.05, and calculated π = 0.75. It then the maximum number is
10.413 since
$$ M \le \frac{{\ln \varepsilon }}{{\ln \pi }} = 10.413. $$ - 11.
In order to argue these precisely, according to Weidlich (2000), we need to construct the socio-configuration by employing the personal variables and material variables pertinently specified, also defining the trend and control-parameters, and then the autonomous self-contained probabilistic sub-dynamics on the social system.
- 12.
See Theorem 3.1 of Arthur (1994, Chap. 10, pp.189–190).
- 13.
The numerical simulation of this model continues to be developed by the research group of Mauro Gallegati. See for example Gallegati et al. (2006).
- 14.
See Aoki (2002).
- 15.
“The analyst has to identify those that are likely to explain the choice of the individual. There is no automatic process to perform this identification. The knowledge of the actual application and the data availability plays an important role in this process” Bierlaire (1997, p. 4).
- 16.
As for the classification of dependent games, see Akiyama and Aruka (2006).
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Aruka, Y. (2011). The Evolution of Moral Science: Economic Rationality in the Complex Social System. In: Aruka, Y. (eds) Complexities of Production and Interacting Human Behaviour. Physica, Heidelberg. https://doi.org/10.1007/978-3-7908-2618-0_9
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