chapter  3
16 Pages

The re-emergence of culture in economics

The previous chapter described how after Word War II, economics became a science about economizing in the sense of optimizing under constraints. This development can be attributed to factors internal to the science of economics and to political economic forces at the time of World War II and the Cold War. In this chapter we will argue that the re-emergence of culture in economics once again can be ascribed to forces from inside economic science and developments in the political historical context. The increased use of mathematics in economics did not deliver what some had hoped for. On the contrary, in many cases theory opened more questions and counterintuitive results than it delivered answers. The end of the Cold War had two important influences: it ended the rivalry between the market and centrally planned economies, and it opened the discussion on the way to establish a market economy. The first made it possible to discuss varieties of market economies. The second forced academics and politicians to discuss the essential elements of a market economy and the way by which one would realize such an economy.