The American Journal of Economics and Sociology

American Journal of Economics and Sociology, The, July, 2004

Editor's Introduction

THIS JULY ISSUE of the AJES returns to our usual format after the mailing of three featured volumes to all subscribers. The November 2003 supplement (62:5) consisted of Volume 1 of Robert Andelson's revised and enlarged Critics of Henry George. The second volume of Andelson's work is this year's supplement and was published as the April issue (63:2). It was Robert Andelson's wish that the two volumes of his last work be published in as close proximity as possible, and we have done that by publishing this year's annual supplement in April rather than as usual in November. It is with great sadness that we report that, while Andelson did get to approve the final proofs, he did not get to see the final product. Bob Andelson died while undergoing elective surgery on November 8, 2003. Bob Andelson's contributions to the editorial board of this journal have been enormous, and we plan a subsequent issue to remember his greatness of stature and meticulous care for honesty in scholarship.

In between these two companion volumes, we published a stimulating January invited issue (63:1), edited by Professors Joseph C. Pitt, Djavad Salehi-Isfahani, and Douglas W. Eckel, on the origins and diffusion of public choice political economy at the Center for the Study of Public Choice at the Virginia Polytechnic Institute in Blacksburg, Virginia. The Center was founded in 1968. This volume explored the sociological setting and community spirit that nurtured what has become a formidable research program within economics. I do not subscribe to the view that public choice is a novel form of social science. Rather, I see it as the emerging and developing of older traditions in the discipline that date back to the pioneering work of Thomas Hobbes (Moss 2002). Still, the public choice tradition has provided enormous insights about the evolution and evaluation of political institutions, and our January issue proudly put on display the broader issues and some of the particular characteristics of the founding scholars who pioneered that body of analysis.

It is the task of a scholarly journal to provide a platform for many interesting lines of discussion and analysis. The AJES is especially keen to strike a spark of controversy wherever scholarship looms brightly and that means even in the darkened unorthodox areas of discussion and analysis. Nothing so arouses professional concern and ruffles promotion committees at universities as those few economists who question the verities of orthodox macro analysis. In this issue, I have gathered four interesting papers that are strikingly controversial under the heading "Symposium on Macroeconomics: Rethinking the Verities and Returning to the Classics."

The first paper, by Professor James C. W. Ahiakpor of California State University, describes the present state of Keynesianism. According to Ahiakpor, the leading Keynesian writers are holding onto a lost cause but stubbornly refuse to admit it. A careful reading of classical economics reveals that Keynes's revolt against classical economics was all the time a revolt against a phantom tradition that did not exist. According to Ahiakpor, Keynes made up so many things about the economists who preceded him that his "revolution" is more like a imaginative hallucination erected on a cartoon characterization of all that came before. Much ink has been spilled by historians of economics on this point, and Akiakpor now leverages his clarion call on these foundations. Ahiakpor concludes that modern Keynesians are fighting a futile battle to sustain a dimming light.

The next article in the symposium, by Professor George Reisman of Pepperdine University's School of Business and Mangement, argues that ordinary gross domestic product calculations aiming to aggregate the market value of all new goods and services produced in a region over some period of time are flawed and incomplete. In a frantic effort not to double-count both the "bread and the flour," the procedure never counts the intermediate goods at all. What is actually measured is something of a net product that is misnamed "gross product."

Professor Jerry Kirkpatrick of California State Polytechnic University offers a gloss on Reisman's "net" theories and how they give shape to an genuinely entrepreneurial theory of profit is in the tradition of classical economics, which is now gaining popularity against the Keynesian onslaught of decades ago. Kirkpatrick also explains why Reisman's approach is quite different from the Austrian School economics rooted in the writings of Ludwig von Mises and Murray N. Rothbard.

The last article in our symposium, by Professor William D. Gerdes of Clarke College, suggests that, when measuring the GDP of the African third-world economies, it makes more sense to subtract government spending (G) rather than add that magnitude into the total calculation of GDP. The reason G needs to be netted out of C I G (X - M) is to be able to account for the corruption, graft, and thug confiscations that are all too familiar to entrepreneurs or anyone else trying to do business in these parts of the world. When the government redistributes productivity to insiders and cronies, it seriously retards economic development and diminishes rates of growth of real GDP. Professor Gerdes dubs his adjusted measure of the overall level of economic activity "Smithian GDP" in honor of Adam Smith's skeptical approach toward macroeconomic management of the economy by the "men of system," as Smith referred to those pundits who are insensitive to the ways and accomplishments of the market order.