This essay was written for the first research project of the Joint Committee on Western Europe of the Social Sciences Research Council and the American Council of Learned Societies. It was published in Suzanne Berger, ed., Organizing Interests in Western Europe (Cambridge University Press, 1981), pp. 27–61. The objective was to survey the changing ways in which modern societies mediated among collective interests. The essay cited the ideological arguments that initially allowed particular “interests” to be seen as legitimate, and not just an expression of cabal or conspiracy. Then it traced the pressures under which parliamentary aggregation of interests in an era of mass suffrage, international economic rivalry, and an emerging labor movement might have to be supplemented by direct mediation among producer groups – the forerunner of what has become known as corporatism or neocorporatism. At the time the essay was drafted in the late 1970s, neocorporatist tendencies appeared to be advancing steadily throughout Western capitalist societies. In retrospect this trend can be partially understood as a response to the pervasive inflation that led policy makers and interest group representatives alike to search for ways of controlling the allocation of national income and political influence. Many of the social compacts then negotiated under government auspices proved ephemeral; and neocorporatism increasingly seems to have been one recourse among others for coping with the politics of distributive conflict. Thus the essay was correct, I believe, to hint that the balance between parliamentary and interest group representation might not follow a continuing trend, but could shift again.

All but one of the chapters in this volume were written as public lectures for a general university audience. All examine the boundaries – at least parts of the boundaries – of the discipline of economics with two aims in mind. First, they seek to give noneconomists insights into the way economics works, the way economists think about human behavior, and the way their mode of thought differs from that prevailing in other disciplines. Second, they attempt to give economists fresh insights into the way they do their work, on the premise that looking at, and across, the boundaries of a subject – looking at what it is not – is often useful for understanding what it is. And to both groups these chapters are meant to give a sense of the often significant changes now taking place in these boundaries.

The lectures were given at Tulane University in 1985. The Murphy Institute of Political Economy and Policy Analysis was just then establishing an interdisciplinary undergraduate program in political economy, and I was invited for the spring term as the first Murphy Institute Visiting Professor. I was assigned three duties: to teach an undergraduate class on economics in the context of other disciplines, to organize an interdisciplinary faculty seminar, and to arrange for a series of public speakers. In all instances, the topics to be addressed were broadly the same.

Most methodological writing on economics is undertaken by economists. Although the bulk is produced by lesser-known members of the profession, almost all leading economists have at one time or another tried their hand at methodological reflection. Almost everybody agrees that the results are usually poor. If one read only their methodology, one would have a hard time understanding how Milton Friedman or Paul Samuelson could possibly have won Nobel Prizes. It is less surprising that the economics profession professes such scorn for philosophizing than that its members spend so much of their time doing it.

In this chapter I am concerned with three related puzzles concerning work on economic methodology. In addition to saying something about the reasons for its current mediocrity, I address its peculiar relations to philosophy of science and the strange fact that the currently dominant views in economic methodology are drastically inconsistent with the practice of economists. The solutions to these puzzles are related, and the villains responsible for them are philosophers.

To clarify the strange relations between writing on economic methodology and work in philosophy of science and to articulate and explain the inconsistency between methodological dictum and practice, I shall offer a sketch of the history of reflection on economic methodology with a special emphasis on the recent history. We shall see that, although the literature concerning economic methodology is heavily influenced by philosophy – both current and, especially, outdated – it is cut off from philosophical discourse.

Most of the ways economists talk, if they were translated into English, would sound plausible enough to noneconomical folk like farmers and poets and business executives. The talk is hard to follow at first, in the usual way of specialized talk, because the culture of the conversation makes the words arcane. But the people in an unfamiliar conversation are not Martians. Underneath it all (the economist's favorite phrase), conversational habits are similar. Even mathematical models and statistical tests, which sound alien to literary ears, grow out of ordinary talk. Under scrutiny they reduce to words that even an earthling might use.

All the conversational devices of economics, whether words or numbers, may be viewed as figures of speech. They are all metaphors, analogies, ironies, appeals to authority. Figures of speech are not mere frills. They think for us. Someone who thinks of a market as an “invisible hand” and the organization of work as a “production function” and coefficients as being “significant,” as an economist does, is giving the language a great deal of responsibility. It seems a good idea to look hard at this language.

If the economic conversation were found to depend heavily on its verbal forms, this would not mean that economics is “not a science” or “just a matter of opinion” or some sort of confidence game. Good poets, though not scientists, are serious thinkers about symbols; good historians, though not scientists, are serious thinkers about data; good scientists, too, use language.

This chapter incorporates an article from 1970 and the major part of a 1984 essay on related themes. “Between Taylorism and Technocracy: European Ideologies and the Vision of Industrial Productivity in the 1920s” was written for a prize competition in memory of Klaus Epstein sponsored by the Journal of Contemporary History, where it appeared in vol. 5, no. 2 (April 1970), 27–61. Since its original publication, scientific management and industrial rationalization have continued to attract scholarly interest in Europe and the United States. The essay was also published in French in Recherches, no. 32–3 (September 1978: Le soldat du travail), 95–136, D. Dumoy, trans.; reportedly in an obscure Italian review, Quaderni del Progetto, which never contacted the author; and in an abridged German version as “Zwischen Taylorismus und Technokratie: Gesellschaftspolitik im Zeichen industrieller Rationalität in den zwanziger Jahren in Europa,” in Michael Stürmer, ed., Belagerte Civitas, Die Weimarer Republik (Cologne: Neue Wissenschaftliche Bibliothek, 1980), 188–213.

Whereas the 1970 essay stressed the political implications of Taylorism and Fordist concepts, scholarship in the intervening years has focused on the actual implantation and practice of scientific management. Recent research would lead me to amend some of my detailed points, and especially to credit a wider French enthusiasm for scientific management than my article suggested. Taylorism, the original essay proposed, derived much of its appeal from its implicit political promise to overcome class conflict. But as recent writers have emphasized, in the wake of repeated revolutions, nineteenth-century French liberals sought to preclude political upheaval by strengthening social networks: emphasizing “solidarity,” sanctioning professional associations and even unions, encouraging benevolent societies, cooperatives, and insurance pools.

The literature on this theme has ballooned in the years since the publication of this article. For essays on recent inflation see Leon Lindberg and Charles S. Maier, eds., The Politics of Inflation and Economic Stagnation (Washington, D.C.: Brookings Institution, 1985), and the collection in which this chapter first appeared: Fred Hirsch and John H. Goldthorpe, eds., The Political Economy of Inflation (London: Martin Robertson; Cambridge, Mass.: Harvard University Press, 1978). For historical résumés of Latin American monetary experiences through the 1970s, see Rosemary Thorp and Laurence Whitehead, eds., Inflation and Stabilisation in Latin America (London: Macmillan, in conjunction with St. Antony's College, Oxford, 1979). A useful, focused volume emerged from a colloquium at the Institute for International Economics in December 1984: John Williamson, ed., Inflation and Indexation: Argentina, Brazil and Israel (Washington, D.C.: Institute for International Economics, in conjunction with MIT Press, Cambridge, Mass., 1985). A major collective project on the German inflation of the 1920s in comparative and historical perspective has been edited by Gerald D. Feldman, Carl-Ludwig Holtfrerich, Gerhard A. Ritter, and Peter-Christian Witt. Volumes include The German Inflation Reconsidered: A Preliminary Balance (Berlin: de Gruyter, 1982) and The Experience of Inflation: International and Comparative Studies (Berlin: de Gruyter, 1984). Related studies include Carl-Ludwig Holtfrerich, The German Inflation 1914–1923: Causes and Effects in International Perspective, Theo Balderston, trans. (Berlin: de Gruyter, 1986); and Gerald D. Feldman, ed., Die Nachwirkungen der inflation auf die deutsche Geschichte 1924–1933 (Munich: Oldenbourg, 1985). A major social history of the German inflation by Professor Feldman is currently near completion.

Any student of twentieth-century Europe must ponder issues of social and political stability. Why did it break down in the first decades of the century? How was it reconstituted in the second half? Does it mean anything more than order? Metternich certainly thought in terms of European stability, though most often he used the eighteenth-century term équilibre. But through the nineteenth century, as social conflict became more preoccupying, the contrast between order and disorder became more prevalent. “Order” was originally a concept linked to the ancien régime: a quasi-legal status ascription related to “estate.” By midcentury it was reinfused with the authority of a dubiously scientific sociology: order, for Comte, rested on primal social groups. The Party of Order was Marx's scathing catchall description of the French bourgeois conservatives who rallied after the June Days of 1848 and engineered the Bonapartist reaction; L'Ordre appeared as a rightist newspaper title throughout the Third Republic and “l'Ordre Moral” provided a watchword for the conservative coalition of 1876– 7. “Disorder,” in contrast, implied purposeless and frightening insurrection; it evoked the lurid flames of the burning Tuilleries and the hostages shot by the Communards of 1870–1. The term “disorder,” of course, did not give any credit to the often coherent schemes for workshops and welfare, nationalized banks, cooperatives, and manhood suffrage that protesters advanced. “Count on us,” Thiers had told Bismarck in May 1871, “and the social order will be revenged in the course of the week.” Conservatives were in a position to impose the lexicon.

This is an exciting time to be engaged in economics and philosophy, a time when a number of unusually able and serious people from the two disciplines are converging on common themes and issues and are learning from one another. This renewed activity follows upon several decades when economics and moral philosophy, once closely aligned, had grown apart; and indeed, partly as a result of this separation, both disciplines had come to back away from engagement in serious social problems.

I would not deny that such disengagement continues for many economists and philosophers, who seem to regard any hint of moral judgment in their work as a derogation of professional standards. But for those who want to do serious work on the borders of economics and social philosophy, the opportunities are there, in abundance.

I offer here some thoughts, rather heavily autobiographical, about how we have come to this happy state of affairs. These will provide the basis for a bit of reflection on where, after ten or fifteen years of renewed collaboration, we seem to have gotten and where we may be headed.

The current mutual interest between economists and philosophers is dramatically different from what it was even twenty years ago. A useful test of that difference is to ask what philosophical works most economists think they should know. (A more honest version might be: Which ones would they feel slightly embarrassed to admit their ignorance of publicly?)

This chapter was originally drafted during tenure of a fellowship from the National Endowment for the Humanities to pursue research on the United States and European reconstruction after World War II. Earlier versions benefited from conversation with Duke University colleagues as well as from discussion at seminars at the University of Wisconsin in Madison, Princeton University, Harvard University, and the European Studies Center at the University of Chicago, and at Werner Conze's seminar for social and economic history at Heidelberg. A semi-final draft was presented as a paper at the Ninety-Third Annual Meeting of the American Historical Association, held in San Francisco, December 1978.1 am grateful to Leonard Krieger, Richard Kuisel, and Carl Schorske for their comments at that session. The version reprinted here is especially indebted to the suggestions of Professor Kuisel, the subsequent critiques by the anonymous referees for the American Historical Review, and the comments of Patrick Fridenson of the Ecole des Hautes Etudes en Sciences Sociales, Paris. I have not reproduced here the comments by Charles P. Kindleberger and Stephen Schuker that were published along with the original article, nor my rebuttal.

Broadcasting over the BBC in November 1945, A. J. P. Taylor assured his listeners, “Nobody in Europe believes in the American way of life – that is, in private enterprise; or rather those who believe in it are a defeated party and a party which seems to have no more future than the Jacobites in England after 1688.” Taylor proved to be wrong, or at least premature, about the end of private enterprise. The question here is why, at least in Western Europe, there was less transformation than he envisaged.

Growth of Agricultural Production

Although it is easy to define productivity, the initial need to define output and the basic components of inputs is rather difficult and controversial. In this paper, the total net value of production of agricultural products includes all crops (81 per cent) and all livestock products (19 per cent). Table 4 shows the net output of agricultural products (at 1969/70 constant prices) from 1974/75, the start o( the Second FYP. Thus the performance of Burmese agriculture, in general, can be observed by analysing the data from Table 4 and Figure 1.

According to offical statistics, it is obvious that the total net agricultural output is increasing (see Table 4).: It increased 86 per cent within the twelve years from 1974 75 to 1985 86 at the annual rate of change of about 6 per cent. But if one examines the yearly change in the output indices, it can be seen that the rate of increase has been declining since 1981 82. The increasing trend lost its momentum through the 1981/82 agricultural season and has become sluggish.1 This trend is confirmed by the time series data of annual growth rates. The growth rate peaked in 1980- 81 and from 1981 82 onwards it has been decreasing yearly: the growth rate for 1985/86 was less than a quarter of that of 1980/81.

Similarly, if one looks at the average annual growth rate of each of the FYP period, the best performance occurred during the Third FYP (8.1 per cent) and the poorest performance in the Fourth FYP (4.6 per cent). This suggests that the performance of the agricultural sector slowed down after the Third FYP and became more pronounced towards the end of the Fourth FYP (which ended on 31 March 1986). This can largely be explained by the already very high base for the Fourth FYP (an analysis of this is given in detail later on).

Growth of Inputs

Labour Force

In this study, the labour input variable is defined as the economically active population in the agricultural sector. This refers to all persons engaged in economic activity, whether as employers, self-employed workers, salaried employees, or unpaid workers assisting in the operation of a family farm or a business.'

Introduction and Methods

Many industrialized countries have retirement arrangements involving tax-sheltered savings. These usually provide for the deduction of limited amounts of savings designated for retirement, from the annual income tax base. The earnings in the accumulating fund are free of income tax, but on retirement the resulting total accumulation, whether drawn as a lump sum or as an annuity, becomes income subject to tax. Savings accumulated in the Central Provident Fund (CPF) of Singapore are excluded from the personal income tax base on contribution, are tax-sheltered as to earnings, but by contrast, do not become taxable on distribution. This chapter explores what would happen to rates of return accruing to CPF savers, if the tax shelter were partially withdrawn under various alternative arrangements.

This study covers the case of each of fourteen taxpayers with various income levels, and alternative CPF contribution periods of 5, 10, 15, 20, 25, 30, and 35 years. The alternative tax arrangements fall into two broad categories. The early part of this study considers modifications to the tax treatment of the contributions, while maintaining the tax-free status of the fund earnings and the emerging benefits. The latter part assumes continuation of the status quo in the tax treatment of contributions and fund earnings, but assumes various possible methods of taxing the lump-sum value of the accumulation. This, latter approach, may be deemed to be a reasonable proxy for the taxation of the annuity flow customary in industrialized countries.

In evaluating the outcome of each alternative tax programme, we assume that the CPF will continue to credit a 3 per cent “real” rate of interest on all sums actually contributed. We distinguish between the 3 per cent “real” credited on CPF balances, and the internal rate of return (IRR) earned on the difference between the CPF contribution and the income-tax saving.