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My Opinion

Paul Krugman Noble Prize Economics 2008

Implications for the future of social science.

 

Paul Krugman, Professor of Economics and International Affairs at Princeton University, will receive the Noble Prize economics 2008, for his scientific work in international and geographical economics. In his models he examines the relationships between international (interregional) trade, endogenous growth dynamics and urban agglomeration. Through the combined analysis of trade and investment flows as well as endogenous economic development factors, he explains the uneven growth of cities and regions. Krugman's own contribution to geographical economics , thus, rests on his original synthesis, using formal modelling of the forces of unequal growth and agglomeration in space.

 

These forces themselves, however, had already been identified by different scholars working in the 19 th or 20 th century: several academics belonging to the German Historical Schools in Germany, Stressing the role of culture, public management and education in the development of states, regions and cities (Wilhelm Roscher, Gustav von Schmoller, Werner Sombart, ...); Alfred Weber's precursory work on agglomeration economies; Harold Hotelling explaining the relationship between increasing returns to scale and concentration of economic activity in space; August Lösch's analysis of the spatial spread of economic activities, but also his work on the nature of an economic region and regional systems; François Perroux, Gunnar Myrdal and Albert Hirschman, showing the structural relations between economic growth and spatial polarization, etc. Authors who, along with many contemporary scholars, have nurtured the academic debates in social and economic geography . In fact this vibrant discipline has not waited for Paul Krugman for its revival, it has been alive and kicking for at least the last two decades with significant contributions such as the study of innovative regions, thes patial dynamics of embedded production systems, relational geography, the multi‐scalar analysis of value‐added chains, etc.

 

Still Krugman's Nobel laureateship is deserved and comes at the right moment. Most Social scientists concerned about human development and social progress at the regional, national or international scale, show affinity with Krugman's work, though more with his analysis of the economy cum society in his role as a commentator in the national and international press, than with his formal economic analysis. Even if his models include more ‘human', ‘social' and ‘political' variables than the economic profession usually predicates. Why is that?

 

Two sides to one economist: a historically well known phenomenon

 

In history we have known quite a number of main (or by‐?)stream economists who built their career in a way similar to Paul Krugman: it is fine to praise my formal models but please listen to the voice of my critical side. Several of these economists worked on the explanation of the geographical patterns of the economy. Johann Heinrich von Thünen, 19 th century German Cameralist, and founder of modern agronomy and land‐use models as well as inspirer of neoclassical income distribution theory was a critical commentator of public management in his time; Alfred Weber, the early 20 th century godfather of neoclassical location theory, was also an experienced civilization analyst. Moreover, in his ‘location studies' he paid attention to the multidimensional aspects of industrial location in the ‘real' economy; August Lösch, Inventor of general spatial equilibrium models, published interesting reflections on ‘real' regions, regional systems and regional policy; Alfred Marshall, one of the founders of neoclassical economics, was also the analyst of the ‘real world' industrial districts and, as a critic of his own economic ‘statics', became a precursor in the study of economic dynamics, .. Of course, there are exceptions to this duality, especially when scholars take on an institutional perspective and consider the economy and economic behaviour as intrinsically cultural. A well‐ known example is the Scandinavian Nobel prize laureate and institutional economist Gunnar Myrdal, who examined regional development by addressing the relationships between economy, society and polity in an authentic multidisciplinary way, both in the ‘North' and the Global South. But the common rule for economists is to do their scientific work within the boundaries set by the codes and canon of their (scientific) community of practice, separate from the analysis of the real, socio‐politically complicated world and its messy economy, which is ‘something different'. Or, stated in a provocative way: something you do in your leisure time. The question then is: why work within the boundaries set by the codes of the community of practice? Why keep ‘proper' scientific research away from reflections on the real world? (Alfred Weber, pointing out the different orientation of the two volumes in his ‘Location Theory', made a distinction between ‘pure' and ‘real' theory. Our guess is that this distinction could also be applied to Paul Krugman's work and to that of many economists we are referring to here.)

 

Toward Post‐disciplinarity in social science?

 

Before the birth of social science disciplines – a multiform process mainly occurring in the last quarter of the 19 th and the first quarter of the 20 th century – scientific debates addressed economic, social, political and cultural aspects of diverse phenomena in society as a whole. Classical ‘Political economy', despite differences among authors depending on their ideological stance, was basically a relatively coherent combination of, to use contemporary discipline labels, sociology, economics, political science, occasionally turning to elements from psychology and anthropology. This Period in the development of social science is today often referred to as ‘proto‐disciplinary'. There were no particular prejudices toward deploying concepts and theories, as long as these were significant in any explanation of what was observed. The methodologies used in this ‘proto‐disciplinary period', though often diverse in foci, come quite close to what we consider as multidisciplinary today. We could cite several authors belonging to the German Historical Schools, but also, among many others, Vilfredo Pareto, Max Weber, Emile Durkheim, Thorstein Veblen, and, slightly later in time, the ‘sociologist, economist and political scientist' Joseph Schumpeter.

 

Today, to the wider public opinion and policy communities, this type of multidisciplinary analysis of economy cum society is known through socioeconomic commentaries published by eminent social scientists ( in casu an economist like Paul Krugman). These Commentaries are widely read, they occasionally have an impact on the views and orientations of analysts and policy‐makers, but seldom serve as the foundations of ‘real' policy orientations, which seem to connect more naturally to the ‘codes' utilised by different communities of scientific practice, such as those in mainstream economics. These codes are predominantly mono‐disciplinary or intra‐disciplinary – they strip the concepts they borrow from other social sciences of their multidimensional meaning. A good example is the concept of ‘transaction' as used in new institutional economics (NEI), largely ‘liberated' however from its original meaning as a social relationship. John Commons in ‘old' American institutionalism, or, more recently, Paul DiMaggio in sociology devoted detailed attention to the social and institutional character of a transaction, showing its social embeddedness, its cultural features, the power relations it incorporates, etc. But the very influential NEI Seems to have abandoned the multidimensionality of ‘transaction'. In general, methodological impoverishment following from a mono‐disciplinary bleeding of multidimensional concepts and multidisciplinary theories often leads to strong discursive statements, sometimes translated into devastating policy recommendations.

 

The Nobelisation of Paul Krugman could be an emblematic moment to do away with the mono‐disciplinary biases in social science in general, and economics in particular. Of course, there is no reason to return to proto‐disciplinarity as the norm for future social science. But the modes of scientific debating multidimensional analysis, combination of theory and empirical research as applied in the Belle Epoque proto‐history of social science could be used as a mirror to evaluate epistemology, concepts and theories as they have developed in the social science(s) of the last few decades. This could be a starting point to transgress the disciplinary codes and bypass the artificial gap between – again in Alfred Weber's terms – ‘pure' and ‘real' theory. It would make the work of Paul Krugman and other brilliant minds socially much more valuable.

 

Frank Moulaert, Professor of Spatial Planning, KU Leuven, Belgium

Erik Swyngedouw, Professor of Geography, Manchester University