New Directions in Analytical Political Economy.

• Author: Samuels, Warren J.

Some thirty years or so ago I read an article in the American Economic Review on interest rate theory, whose contents appeared to me to be both obvious and already known, seemingly published because of its attractive mathematical exposition. Although in that case the mathematics added nothing, in general mathematical formalism provides a useful set of tools. In the volume under review mathematics is used constructively to advance inquiry into certain topics and variables largely absent from conventional neoclassical economics, suggesting that the problem with the current practice of neoclassicism is not its mathematical formalism but how much is ruled out of disciplinary bounds by the adoption of certain limiting paradigmatic or particular assumptions.

The contributors to this volume present as their version of "normal science" [p. xiii] a "left structural model" which includes dynamic (evolutionary), institutional and structural variables in macroeconomic and microeconomic contexts and eagerly use mathematical formalism as one mode of expression and analysis. The contributors object to neoclassical optimization analysis, in part because the latter seeks unique results rather than an array of results each specific to different structural and distributional, as well as evolutionary, contexts; and in part because the latter is limited to optimizing behavior as such. They are willing to include, first, what neoclassicists would call social, political or anthropological variables; and second, models and themes from classical, Marxian/radical, Keynesian, Kaleckian, structuralist, and "institutional, evolutionary, behavioural and other political economy approaches" [p. 14]. The "analytical" aspect of analytical political economy refers to their use of mathematical formalism but "without giving it an absolutely privileged status over other kinds of analysis" [p. 11], though with an eye, "given the rhetorical importance of mathematical formalization in economics," to "getting wider attention and perhaps acceptance" [p. 12].

After a valuable introduction by the editor, thirteen essays (all so complex that it is impossible to do them justice; and, moreover, I am by no means expert in all the areas covered) are distributed among four parts. Part I, with essays by Alan G. Isaac, Peter Skott and Marc Jarsulic, treats unemployment, finance, and growth cycles. These papers deal with how the (natural) rate of unemployment is affected by structural and...