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Reconstructing the Economy: A Methodological Journey from the Surface to the Essence and back
Published: 23 July 2010 by MDPI in The 4th International Conference on the Foundations of Information Science session FIS 2010
Abstract: The essential methodology in social science to "understand" phenomena is informed abstraction. But the way - how and what for - the abstraction process is shaped divides the economists into various schools. While mainstream economists abstract from any links of the economy to human beings - replacing them by selfish machines maximizing their profits or individual utilities, and neglecting any deeper analysis of the basic constructions they use (like prices or money), heterodox economists try to look behind the surface, link them to certain periods of history and to the source of all value: humans are social beings and cannot exist without mutuality. The paper presents a heterodox way to reconstruct contemporary capitalist economies by applying the new science of information with its evolutionary concepts. It starts the description on a very abstract level: useful things and services produced by specialized labor. Step by step new layers of information are added. At the same time economic indicators of the lower levels are modified (labor values, competition leading to prices of production, money and banks, state activities, monopoly), ending at the surface of the economy with the introduction of commodification and commercialization processes of information in the so called information society. The result of the reconstruction is used in a mathematical simulation model based on stylized facts.
Keywords: information society, heterodox economics, simulation model