Knowledge that Transforms

T HIS BOOK is a big, ambitious undertaking, organized in 31 long chapters covering subjects which range from religion and civilization in economic life to money, banking, wages, and incentives. But, as the title suggests, it is essentially a research tool. It is meant not so much to be and reviewed as to be The test is whether people end up coming back to it more and more or less and less as time goes on. Judging from those areas of economics and sociology in which I have worked, I would predict people will return to The Handbook of Economic Sociology more and more. The chapter by Chris Tilly and Charles Tilly on labor market structures, the area I know best, is the most comprehensive review of the subject; it handles with rare sophistication, material drawn from across the social sciences. The essay by Alejandro Portes on the informal sector and that by Ivan Light and Stavros Karageorgis on the ethnic economy also consolidate areas of study dispersed over the literature of a variety of different disciplines. But I doubt that any single person is in a well-informed position to pass judgment on all of the essays in the volume. Nonetheless, the publication of a book like this provides an occasion to reflect upon the field of scholarly endeavor, to consider what it represents as a complement to conventional economics and, possibly, as an alternative. For this, it seems reasonable to the text, or at least peruse it, chapter by chapter. The first thing to be said about approaching The Handbook of Economic Sociology in that way is that it is a true handbook: The editors, Neil J. Smelser and Richard Swedberg, provide very little guidance on how it might be read as opposed to referred to. It has no real introduction. It invites readers to pick out chapters at random, following their own inclinations. This, moreover, turns out to be a very frustrating experience. It leaves one wondering what economic sociology is, or even, what economics is that economic sociology is not. Absent some other guide, one seems forced back to basic definitions. In introductory economics-at least when I teach it-we offer two of these. One defines economics broadly as the study of how people employ scarce resources and distribute them over time and among competing demands (Paul Samuelson 1961). The other is much narrower and more focused:

T WO HUNDRED and seventeen years after Adam Smith's publication, An Inquiry Into Wealth of Nations, comes Partha Dasgupta's An Inquiry into Well-Being and Destitution, which apparently is intended to be equally broad-ranging. Smith identified two forces that regulated level of per caput consumption in any nation, first being the skill, dexterity and judgment with which its labor is generally applied, and second being the proportion between number of those who employed in useful labour and that of those who not so employed. He distinguished sharply between savage nations of hunters and fishers from civilized and thriving nations. Although in former every individual who is able to work is more or less employed in useful labour, most are so miserably poor, that from mere want, they frequently reduced, or, at least, think themselves reduced, to necessity of sometimes destroying and sometimes of abandoning their infants, their old people, and those afflicted with lingering diseases, to perish with hunger or to be devoured by wild beasts (Smith 1937, pp. lviilviii). In contrast, in latter nations,

THIRTY YEARS AGO, when Koopmans began to be well known as an economist, he seemed to be a foreigner in a field where his approach to problems was often so different from the prevailing ones. Today a large group of young economists follows his path to scientific discovery. In this respect the book under review is particularly interesting. Not only does it serve as an easy access to articles that appeared in a large number of journals, but it also gives to the careful reader an opportunity to understand the true personality of Tjalling Koopmans, the scientist, and, beyond him, the methodology of modern economics.

An evaluation and commemoration of two pioneering American economists one century after their deaths in 1897. Biographical sketches are followed by expositions and assessments of their contributions to economics. Areas covered include distribution theory, the explanation of poverty, George's single-tax proposal, the business cycle, and money and statistics. A novel interpretation of George's treatment of rent is provided. Also covered are the parallels and antagonisms between George and Walker, and the uneasy relationship between George and the academic economists of the era. An appendix provides a brief guide to the literature.

British Economic Growth, 1270–1870 makes a big leap forward in our understanding of the long-run performance of what became the leading nineteenth-century economy and the workshop of the world. It does so by implementing a giant quantitative enterprise, one that will make it the standard data source for studying the evolution of the British economy for decades to come. (JEL C82, D31, E23, I31, I32, N13, N33)

A SPATE OF economic literature appeared in the late 'fifties and early 'sixties as the advanced nations' governments and economists turned their attention to the so-called developing nations. A recent survey of subsequent contributions to the theory and practice of reveals less that is new and important. Meanwhile poverty persists in the less developed countries (LDCs). And economists are realizing that several social sciences are involved. What else has been discovered or relearned during the decade of development now drawing to its close?'

PHE PURPOSE OF this paper is to examine Hicks's contribution to macroeconomic theory in those respects in which it constitutes a response to, or a development of, the work of John Maynard Keynes. Thus, while it is narrower in scope than an attempt to assess Hicks's contribution to macroeconomic theory, it is broader in scope than an attempt to see Hicks as Keynes's interpreter: for an interpreter is judged only by the faithfulness with which he translates the material given to him; he is not required to extend, recast, criticize, or reconstruct that material. We shall be concerned, then, with what Hicks got out of Keynes's writings and what he did with it; not with what was really there. I therefore shall not be concerned with the authenticity or doctrinal purity of Hicks's Keynesianism. In considering Hicks's contribution to I shall be concerned with two distinct but related matters. First, I shall be concerned, in Sections II and III, with Hicks's response to-and in particular his criticisms of-what himself actually wrote. Also, however, I shall, in Section IV, be concerned with Hicks's contribution to those ideas that eventually entered the public domain as economics, quite irrespective of whether those ideas accurately reflect what may or may not have had in mind at some crucial juncture of his career. I should emphasize that these two concerns are intended to consist simply of a narrower and a broader one: they do not involve a contrast between a profound and intellectually challenging of Keynes on the one hand, to be set against a vulgar and degenerate Economics on the other. Accordingly, I shall be using the term Keynesian in a robust sense; I use it in full recognition of the possibility of diverse shades of opinion, and of extreme or borderline cases, on the understanding that it is what all these have in common that is important.

PHE NEW BOOK by William J. Baumol, John C. Panzar and Robert D. Willig is the culmination of several years of research on the related problems of understanding multiproduct cost structures and their implications for competition and market performance. It is a significant book for several reasons. The empirical reality that forms the starting point for the theoretical work is, I think, widely recognized to be important. Cost structures constitute one of the foundations of competitive strategy, and strongly influence industry structure. Notwithstanding this fact, the amount of microeconomic theory directed toward competitively relevant attributes of costs has been, if not minimal, then certainly more limited than the subject deserves. In fact, prior to the work of our authors, economists and business strategists did not have a language or a set of concepts with which to talk precisely about scale economies in a multiproduct setting. We now have at least the beginnings of such a language, and a body of theory that provides a grammar for using it. The theory of contestable markets was the subject of Baumol's presidential address at the American Economic Association meetings in Washington in December 1981. Both the theory and its presentation have generated controversy, useful controversy I think, because it helps clarify issues that need attention. I shall have remarks to offer later in this review concerning the normative and descriptive relevance of the contestable markets hypothesis. My plan for this review is as follows. I begin by outlining some of the principal definitions and propositions of the theory. This outline should not be mistaken for a complete summary of the book. But the economist who has not yet read the book needs a reasonably detailed picture of the approach. Few of the propositions require long proofs: in fact once they are stated, the proofs are often simple exercises. Having outlined some of the principal concepts, I comment upon their usefulness for understanding markets. And finally, I conclude by suggesting some ways in which the general subject may be pursued from this point forward.