An Alternative Perspective
- New Horizons in Institutional and Evolutionary Economics series
Edited by Erik S. Reinert
Chapter 1: The Other Canon: The History of Renaissance Economics
1. The Other Canon: the history of Renaissance economics Erik S. Reinert and Arno M. Daastøl 1. TYPOLOGIES OF ECONOMIC THEORY AND THE FOUNDATION OF THE TWO CANONS It has been said that economics as a science – or pseudoscience – is unique because parallel competing canons may exist together over long periods of time. In other sciences, periodic gestalt-switches terminate old theoretical trajectories and initiate new ones. In a paradigm shift, the scientiﬁc world moves from a situation in which everyone knows that the world is ﬂat to a new understanding that the world is round (Kuhn 1970). This occurs in a relatively short time. In economics, the theory that the world is ﬂat has been coexisting for centuries with the theory that the world is round. In this essay we shall argue for the existence of an alternative to today’s mainstream theory: the continuation of the canon that dominated the worldview of the Renaissance – The Other Canon. Using a metaphor from Kenneth Arrow, ‘this tradition acts like an underground river, springing to the surface every few decades’.1 We argue that during the Cold War the ‘underground river’ of Renaissance Other Canon economics all but disappeared from economic theory, and that it is time to reintroduce it. Traditionally, The Other Canon has been resurrected in times of crisis, such as national emergencies, which bring production – not barter – into focus. This occurs, for example, when an exclusive focus on barter has caused ﬁnancial bubbles that subsequently burst, when nations are...
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