ABSTRACT OF PAPER
Title: Open and closed systems in economics: the contribution of Sraffa's Unpublished Papers
Author: Arena Richard
The precise meaning of the dichotomy between ‘closed’ and ‘open systems’ is far from clear or consensual amongst social scientists and philosophers, even however if it is often employed. In the different disciplines, a number of interpretations exist alongside one another, reflecting varioius methodological and philosophical approaches. In this paper, we will investigate how this distinction could be used to characterize political economy and economics by contrast with other social sciences. From this perspective, we will initially follow Schumpeter’s definition of the dichotomy between ‘open’ and ‘closed’ or ‘self-contained’ approaches in the context of his discussion of Walras’ theory of general equilibrium. An economic theory can therefore be considered self-contained or closed when a precise theoretical economic problem (such as the determination of the relative prices of goods and factors in Walrasian and neo-Walrasian general economic theory) can be solved without any help from other social sciences. For instance, in the context of Walrasian and neo-Walrasian general economic theory, ‘fundamentals’ (consumer preferences, productive techniques and initial endowments) are assumed to be exogenous and given. Consequently the help of other social sciences to explain the formation of these ‘fundamentals’ is useless in this context. By contrast, using Sraffa’s Unpublished Manuscripts but also his 1960 book, we will point out Sraffa’s approach to economics is ‘open’ since, in order to solve the problem of the determination of relative prices, it has to resort to other social sciences (for instance, sociology, social philosophy or political science) to fix the levels of distributive variables, such as the wage rate, the rate of profit or the rate of interest (see Arena, EJHET, 2014 where these variables are shown to be formed in relation to social conflicts, institutions and forms of organization). This interpretation is at least partially corroborated by Garegnani’s concept of ‘core’ but also by Davies (Davies, CJE, 2012) who, without using the words ‘open’ VS ‘closed’, refers to their contents and meaning, analysing the analogous relationship between the ‘economic field’ and ‘outside causes’ which Sraffa explained in his Unpublished Papers as being both outside and internal to this field. Moreover, essentially the same type of analysis is attributed by Davies to Wittgenstein in terms of his account of how language games are rule-governed (rules being possibly internal or external).
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