G äbne -Radkowi sch, Claudius; Kapelle , Jakob
Wo king Pape
The mic o-mac o link in he e odox economics
i so wo king pape , No. 34
P o ided in Coope a ion wi h:
Uni e si y o Duisbu g-Essen, Ins i u e o Socioeconomics (i so)
Sugges ed Ci a ion: G äbne -Radkowi sch, Claudius; Kapelle , Jakob (2024) : The mic o-mac o link in
he e odox economics, i so wo king pape , No. 34, Uni e si y o Duisbu g-Essen, Ins i u e o Socio-
Economics (i so), Duisbu g
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i so wo king pape
Claudius G äbne -Radkowi sch
Jakob Kapelle
The mic o-mac o link in
he e odox economics
2024 no.34
1
The mic o-mac o link in he e odox economics*
Claudius G äbne -Radkowi scha,b and Jakob Kapelle b,c
a: Depa men o Plu alis Economics, Eu opa-Uni e si ä Flensbu g
b: Ins i u e o Comp ehensi e Analysis o he Economy, Johannes Keple Uni e si y Linz
c: Ins i u e o Socio-Economics, Uni e si y o Duisbu g-Essen
Abs ac
A i s co e, he discussion on he mic o–mac o link in he e odox
economics is conce ned wi h he co ec ea men o agg ega es and
agg ega ion in social heo y. In his chap e we su ey he e odox
app oaches o he mic o-mac o link wi h a ocus on sha ed
unde s andings and con ic ions ha apply ac oss di e en schools o
hough . In addi ion, we illumina e ypical allacies ela ed o he
ea men o agg ega ion and agg ega es as well as he philosophical
unde pinnings o he e odox on ology o be e unde s and concep ual
di e ences be ween he e odox economics and compe ing app oaches.
Gi en ha economics aces my iad p oblems o agg ega ion—as in he
case o ma ke in e ac ion, mac oeconomic agg ega es, o in e pe sonal
coo dina ion and con ac ing— he ques o p o ide sui able concep ual
ools and philosophical ounda ions o adequa ely add ess agg ega es and
agg ega ion should be o special in e es o economis s o di e en
pe suasions.
*: This is an upda ed and e ised e sion o G äbne & Kapelle (2017)
which will be published in he second edi ion o he Rou ledge Handbook
o He e odox Economics, edi ed by Tae-Hee Jo, Lynne Ches e and Ca lo
D'Ippolli i and published by Rou ledge.
2
In oduc ion
Any discussion o he mic o–mac o link in he e odox economics en ails wo main ques ions.
The i s ques ion is ele an o social sciences in gene al and asks o he co ec o adequa e
ea men o agg ega es and agg ega ion in social heo y. Any exhaus i e answe o his gene al
ques ion inco po a es a se ies o philosophical aspec s including (a) gene al on ological claims
( o example on whe he social and economic agg ega es exis ), (b) epis emological
p esc ip ions on how o concep ualize agg ega es and agg ega ion and (c) me hodological
guidelines on how o disen angle he coe olu ion o s uc u e and agency in applied wo k.
Gi en ha economics o en di ec ly deals wi h (mac oeconomic) agg ega es and aces my iad
p oblems o agg ega ion – such as ma ke in e ac ion and p ice-se ing, in e pe sonal
coo dina ion and he eme gence o social ules o he exing ques ion o social wel a e – he
ques o p o ide sui able heo e ical and empi ical ools o adequa ely add ess agg ega es and
agg ega ion is o in e es o economis s o di e en pe suasions.
The second majo ques ion is mo e speci ic and asks o simila i ies and di e ences in he
ea men o agg ega es and agg ega ion among he e odox economis s. In his espec , we a gue
ha a consis en ision o he mic o-mac o link in he e odox economics exis s, al hough some
he e odox economis s may p io i ize ei he mic o-, meso- o mac o-le el analysis. In ou iew,
he unde lying sha ed in ui ion ac oss di e en he e odox app oaches is ha social ou comes
no only (1) join ly depend on he ac ions o all indi iduals in ol ed, bu also (2) eedback un o
indi iduals. The i s aspec emphasizes ha ela ions among indi iduals ma e and cap u es
he mu ual dependency o ou ac ions as isible in classic accoun s o ci cula low (pa adox o
h i ), he ole o expec a ions (beau y con es s) o social dilemmas (p isone s’ dilemma). The
second aspec e e s o he impo ance o agg ega e ou comes o indi idual ac ion and e lec s
an emphasis on social embeddedness, inequali y and ela ed pe asi e powe s uc u es.
Agains his backd op, his chap e sugges s a uni ied he e odox app oach o he mic o-mac o link
in economics. The i s sec ion emphasizes he analy ical p oblems ha may a ise om popula
misunde s andings abou he ela ionship o indi idual and agg ega e le els. In he second
sec ion we show ha di e en he e odox app oaches o he mic o– mac o link in economics a e
no only consis en , bu complemen a y o each o he and allow o a concise ea men o he
mic o–mac o link in economics based on a se o sha ed undamen al p inciples. The hi d
sec ion embeds he he e odox economic iew on agg ega ion in a ‘sys emis ’ amewo k and
demons a es ha he e odox economic heo y and esea ch p ac ice can be subs an ia ed by a
mo e gene al, philosophical pe spec i e on agg ega ion in science. We a gue ha such a gene al
philosophical amewo k no only opens possibili ies o ad ancing he e odox heo y, bu also
3
es ablishes new means o in e disciplina y collabo a ion by making, because i p o ides
schola s om di e en he e odox schools a consis en me a-language ha accessible om a
b oad ange o disciplines anging om physics (Ande son 1972) o e his o y (Bunge 2004) o
gende s udies (Walby 2016). The las sec ion o e s some concluding hough s.
Agg ega es and agg ega ion in science: a collec ion o
composi ional allacies
Scien i ic endea o o en deals wi h he ela ion be ween agg ega e en i ies – a amily, a na ion
o a i m – and hei indi idual cons i uen s – amily membe s, ci izens, o employees. In
disen angling his ela ionship be ween he ‘whole’ and i s ‘pa s,’ e o s may occu , which can
be unde s ood as composi ional allacies. Such composi ional allacies may lead o a de icien
unde s anding o bo h he whole as well as i s pa s and ypically a ise om a w ong ea men o
agg ega ion and/o a w ong ea men o agg ega es. This sec ion p o ides illus a ions o ou
cases o composi ional allacies and hei concep ual sou ces, o de elop a be e unde s anding
o he p oblems usually associa ed wi h he mic o–mac o link in he social sciences (see also
Table 1 as well as Kapelle 2015).
A i s ypical e o ela ed o agg ega ion – he ‘simplis ic allacy’– a ises om igno ing he ole
o ela ions ac oss indi iduals. Agg ega es con ain no only indi idual en i ies bu also a
co esponding se o ela ions, which ie hei indi idual en i ies oge he and c ea e a ce ain
s uc u e. Many classic a gumen s in economics ecognize he unde lying complexi y, as in
Adam Smi h’s classic accoun on he pin- ac o y, whe e (indi idual) specializa ion can only
aise p oduc i i y because wo ke s and wo k-s eps a e ela ed o each h ough a pa icula
ins i u ional s uc u e. Wi hou such a speci ic ela ional se up, Smi h’s pin- ac o y would
ha dly be p oduc i e a all as u he specializa ion would make i inc easingly di icul o a i e
a sui able ou pu s. Simila ly, concei ing inancial ma ke s as solely d i en by objec i e
undamen als (Fama 1970) necessa ily o e looks he complexi y o ac o s ecu si ely o ming
expec a ions abou each o he ’s beha io (Keynes 1936). Taking such ela ions in o accoun
seems c ucial o unde s anding inancial ma ke s as agg ega e en i ies, howe e .
In gene al, mos mains eam economic models igno e ela ional se ups and de e mine agg ega e
beha io by summing up o a e aging ac oss indi idual en i ies. The esul ing ‘simplis ic
allacy’ is based on a de icien unde s anding o agg ega ion, which iews he ‘whole’ as no
di e en om he ‘sum o i s pa s.’ Such a iew con lic s wi h wo basic obse a ions. Fi s ,
agg ega es may de elop (global) p ope ies ha no indi idual pa possesses, such as a i m’s
4
success. Second, indi iduals may acqui e ce ain ( ela ional) p ope ies p ecisely because hey
a e pa o some whole, like a coun y’s ci izen. In bo h cases we ind ha ‘mo e is di e en ’
(Ande son 1972), as hese newly acqui ed a ibu es may be concei ed as ‘eme gen p ope ies,’
meaning no el ea u es ha a ise because an agg ega e is cons i u ed. Fo he case o amilies
such no el p ope ies include he possibili ies o aising o sp ing, lending mu ual suppo ,
c ea ing collec i e iden i ies and a sha ed o ganiza ion o common igh s and du ies.
Howe e , such a sha ed amilial o ganiza ion may lea e some amily membe s in a dependen
and po en ially dep i ed si ua ion, which allows o illus a ing a second po en ial sou ce o
e o : he ‘s a ic allacy’. I asse s ha agg ega e p ope ies can always be educed o lowe -
le el en i ies, he eby unde es ima ing he dynamics and complexi y o social in e ac ions.
1
Hence, he s a ic allacy abs ac s om he con es edness o such a angemen s and os e s he
imp ession ha he di ision o labo wi hin a household is simply a ma e o indi idual
cha ac e is ics, like p oduc i i y and p e e ence. Opposi ion o his s a ic allacy is a cen al
conce n in eminis economics, whe e he unde lying ela ional s uc u e among indi idual
household membe s is aken mo e se iously. These ela ional se ups, in conjunc ion wi h
cul u al and poli ical a iables, allow o explaining he o en-de imen al posi ion o women
(D èze & Sen 1989). In con as , such aspec s will au oma ically be neglec ed i households
wi h mul iple membe s a e ep esen ed by a single u ili y unc ion. In analogy wi h his
example, hinking in e ms o he s a ic allacy will a ibu e agg ega e ou comes, like
unemploymen , po e y o inequali y, o ce ain indi idual cha ac e is ics – like laziness,
lacking educa ion and e o o , ela edly, de ia ions in p oduc i i y be ween low-skilled
wo ke s and economic ‘supe s a s’ (Rosen 1981) – and will only seldomly ake in o accoun
ela ional eedback o s uc u al ac o s, like exis ing powe asymme ies o pe sis en
s e eo ypes. Hence, he esul ing me hodological indi idualism in oduces a no ma i e bias
and agg a a es he unde s anding o s uc u al inequali ies, exploi a ion, and domina ion (see
also K ang a en & Kesa 2023).
This inal ema k on he lack o conside a ion o s uc u al ac o s can also be obse ed in he
con ex o he ‘hie a chical allacy’, which asse s ha causali y ac oss di e en le els only uns
om indi idual elemen s o agg ega e p ope ies (‘bo om-up’), because wholes can ne e ake
1
The p oposi ion ha any agg ega e p ope y can be educed is objec ionable on wo le els. Fi s , such an
unde aking is o en p incipally in easible, because he ele an ini ial da a is ne e comple ely known and he
associa ed se o calcula ions lack a de e minable solu ion. Fo some speci ic highe -le el phenomena, like
human consciousness (Chalme s 2006) o conscious agen s in gene al (Poppe 1979: 292), a di ec mechanis ic
ela ionships wi h lowe -le el ac i i ies is o en denied. Second, one could a gue ha such an unde aking is
imp ac ical since issues become oo complica ed gi en he limi a ion o ou cu en empi ical and heo e ical
knowledge (see Simon 1962).
5
an explana o y ole in his iew. Cu en mains eam economics ollows such a ou ine by
imposing a gene al “hie a chical s ipula ion ha mac o- heo ies equi e a mic oeconomic
ounda ion o ob ain ull alidi y” (Ro hschild 1988: 14). By con as , he e odox economis s o
di e en pe suasions ad oca e o a mul i-le el app oach o economic heo izing ( o example,
Dop e e al. 2004; Lee 2011; King 2012), emphasizing he changing condi ions and cons ain s
o economic ac ion on di e en le els and he mu ual co-exis ence o op-down and bo om-
up mechanisms.
Ano he eason why a ‘hie a chical s ipula ion’ c ea es mo e p oblems han i sol es is ha
eme gen p ope ies also eedback on hei cons i uen s, which canno be assessed wi hin a
unidi ec ional amewo k. Conside , o example, inno a ion in ma ke en i onmen s and he
associa ed o ces o ‘c ea i e des uc ion’ (Schumpe e 1942) and ‘pa h-dependency’ (Da id
1985) o he con inuous e olu ion o social ou ines (Hodgson & Knudsen 2004), heu is ics
(A hu 1994) and consume p e e ences (Wi 2001). In hese con ex s, we obse e a
coe olu ion be ween indi idual agency and socio-economic s uc u es, which is mani old and
complex. In such a con ex he epis emological p esupposi ion o a ‘hie a chical s ipula ion’ o
mic o o e mac o gi es ise o he ‘dogma ic allacy’, i.e. he claim ha agg ega e p ope ies
should always be educed o (cu en ) mic o-knowledge, while highe -le el mechanisms a e
me e esiduals o indi idual beha io and he e o e negligible. The ‘dogma ic allacy’ is,
hence, complemen a y o he ‘s a ic allacy’ as he la e assu es he possibili y o wha is
demanded by he o me . Bo h allacies p o e especially inadequa e in he ace o complex
sys ems – be hey social sys ems, like economies, o na u al sys ems, like con aine s illed
wi h gas – whe e mic o-beha iou s can lead o mac o-pa e ns in non- i ial ways, e.g.
e y complex mic o-beha io o s able egula i ies on he mac o-le el o a he simple
mic o-beha io leading o chao ic o unp edic able mac o pa e ns (Fa me 2013, Shaikh
2016). In such con ex s, ele an op-down ela ionships a e no only easie o iden i y by a
mo e holis ic app oach, hey a e also o en ele an o do no o e ly discoun he in luence o
s uc u al o con ex ual ac o s (some imes amed as a ‘mac oeconomic ounda ion’ o
mic oeconomics; o example, King 2012).
One na u al example o a he e odox esea ch s a egy ollowing his adi ion is s ock- low
consis en mac oeconomics (Godley & La oie 2007). He e, one s a s wi h accoun ing
iden i ies and s ylized assump ions abou agg ega e beha io o s udy mac oeconomic
dynamics, a he han s a ing wi h specula i e assump ions abou he beha io o a
‘ ep esen a i e household’ (see Ki man 1992), as i is common in dynamic s ochas ic gene al
equilib ium models. Simila ly, much o mode n ecological economics would s a om he
6
assump ion o plane a y bounda ies as a concep ual co ne s one (Rocks öm e al. 2009). In his
con ex such ‘mac o- ounded’ app oaches p o ide impo an complemen a y pe spec i es on
mac oeconomic dynamics, ha allow o he explici inco po a ion o mic oeconomic aspec s
in a second s ep. An example is gi en by in so-called ‘agen -based s ock- low consis en
models,’ which s udy he economy as a complex sys em wi h bo h, bo om-up and op-down
e ec s ( o example, Caiani e al. 2016).
Table 1: Composi ional allacies – an o e iew.
Main e o
Fallacious
ou ine
Unde lying misconcep ion
The
simplis ic
allacy
Igno ing ela ions, i.e.
unde es ima ing he
complexi y o
agg ega ion
Simply summing
up indi idual
p ope ies
W ong ea men o
agg ega ion: " he whole is
no hing mo e han he sum
o i s pa s."
The s a ic
allacy
Igno ing he possibili y
o unexplainable
no el ies / i educible
p ope ies
Any agg ega e
p ope y can be
educed
The
dogma ic
allacy
Igno ing ha highe -le el
mechanisms can be
s udied on hei own
Always aim a
p o iding
bo om-up
explana ions
T ea men o agg ega es:
"wholes canno be
explana o y— hey do no
ca y mechanisms."
The
hie a chical
allacy
Igno ing he possibili y
o downwa d causa ion
Ne e p o ide
op-down
explana ions
A he e odox pe spec i e on he mic o–mac o link: why he whole
is mo e han he sum o i s pa s
One o e a ching heme in he e odox economic heo izing is ha he conside a ion o social
wholes is impo an o unde s anding socio-economic p ocesses and ou comes. This iew
implies ha wholes a e mo e han a me e sum o hei pa s, since hey exhibi non- i ial
p ope ies and ca y e ec s o a ious so s which canno be lea ned om looking solely o
hei cons i uen pa s. Howe e , his idea has also been subjec o di e en in e p e a ions and
applica ions wi hin he e odox economics, leading o a se ies o dis inc an age poin s on he
7
ole o agg ega es and agg ega ion. Some schola s ocus on he explana o y capaci ies o op-
down mechanisms, while o he s y o escape he simplis ic allacy by building pa icula ly
sophis ica ed mic o- ounded models. They a e uni ed in ea ing he mic o–mac o link as a
complex ela ionship ha dese es explici a en ion, because social and economic agg ega es
may cons i u e no el objec s o , a leas , come wi h no el ea u es, which may ha e speci ic
eal wo ld consequences. We now u n o ou undamen al pe spec i es ha ha e played a
decisi e ole in he e odox ea men s o he mic o–mac o link.
Con ex ma e s
One main implica ion o he idea ha wholes do make a di e ence is o conside he spa ial and
empo al a iance o social con igu a ions o iden i y dis inc ealms o economic ac i i y. Such
dis inc ions may e e o his o ical di e ences ( o example, ‘medie al eudalism’ e sus
‘ wen ie h cen u y wel a e s a e capi alism’), spa ial a ia ions (as in ‘co e’ and ‘pe iphe y’) o
dis inc sphe es o economic ac i i ies ( o example, ‘compe i i e i ms’ e sus ‘subsis ence-
o ien ed householding’). These dis inc ions a e deemed impo an since he cou se and e ec s
o economic ac i i ies depend on hei social and his o ical ci cums ances.
Such di e en ia ions a e o en ound in classical poli ical economy. Conside , o ins ance, John
S ua Mill’s dis inc ion be ween he sphe e o p oduc ion and he sphe e o dis ibu ion: while
he o me is cons ained by na u e, he la e is solely shaped by human ins i u ions (Mill 1848:
II.1.1–2). Consequen ly, di e en laws and assump ions apply in hese con ex s.
In Mill’s accoun , humankind is clea ly subjec o ‘mac o- ounda ions’ in he o m o
en i onmen al, his o ical, and socie al o ces, as hey la gely de ine he cons ain s and modes
o economic ac i i y. Simila ly, many he e odox economis s a gue ha holis ic ac o s, like
p e ailing cul u e o ins i u ions, a e impo an o explaining social phenomena and allow o
op-down e ec s o downwa d causa ion wi hin hei economic heo izing. In a bold and
o e a ching in e p e a ion, his iew may ex end o he claim ha social and economic
condi ions comple ely de e mine ac ions, a e, and eelings o indi iduals. Such a iew o socio-
economic de e minism is o en associa ed wi h Ma x’s concep o ‘his o ical ma e ialism,’
al hough such an in e p e a ion does no do jus ice o he o iginal Ma xian accoun . In con as ,
he he e odox app oach can be mo e accu a ely desc ibed in analogy o ha o a physicis
s udying he beha io o a single elemen o sys em ( o example, he beha io o a come
en e ing he sola sys em o he p essu e in some gas-con aine in a lab) by aking ull accoun
o he ele an en i onmen al condi ions ( o example, he composi ion o he sola sys em o
he empe a u e ou side he con aine ; Ande sen e al. 2000). This mo e modes a i ude is key
14
change); in Ma xian pe spec i es on powe and con lic ; and in e olu iona y and ins i u ional
economis s’ ocus on he ole o social no ms, con en ions, and law in esol ing social
dilemmas.
Aside om hese g and ques ion on he p ope ies o he ‘good socie y’, on ological
con ic ions also ca y s ong implica ions o economic policy ques ions as hey in luence ou
pe cep ion o ele an causali ies and, in u n, ou unde s anding o possible le e s o change.
In his sense, unemploymen migh be conside ed a s uc u al ea u e o capi alis economies
om a holis ic pe spec i e, whe eas a pu ely mic oeconomic ocus on unemploymen would
emphasize indi idual ac o s ha con ibu e posi i ely o nega i ely o a pe son’s
employabili y. Simila ly, e idence om many andomized con olled ials is in e p e ed as
indica ion ha indi iduals need o adap hei beha io al pa e ns – ypically ende ing he
la e mo e ‘ a ional’ – while s uc u al e o ms, o example, changes in egula ions o
go e nmen policy, a e o en b acke ed ou in such app oaches by assump ion. This la e
aspec has been called “unwi ingly” by es ablished beha io al scien is s, who emphasize ha
s uc u al e o ms a e o en a mo e e ec i e when i comes o add essing social p oblems
han appeals o indi idual agency (Cha e & Loewens ein 2023).
Sys emism as a gene al amewo k
Sys emism and he e odoxy
While he label ‘sys emism’ migh seem new, he p ac ice o sys emism is a om some hing
no el. He e we in oduce sys emism as a well-de eloped philosophical concep , which
encompasses he basic he e odox a gumen s on he mic o–mac o link in economics. The
de elopmen o sys emism owes much o he wo ks o Ma io Bunge, philosophe and polyma h,
who aimed o ansg ess he adi ional dicho omy be ween indi idualism and holism, which he
pe cei ed as an ou da ed hind ance o social esea ch and epis emological deba e.
Bunge ci es a a ie y o examples o wha he concei es as a ‘sys emis ’ social esea ch, and he
abundance o he e odox economis s e e ed o indica es ha he connec ion be ween sys emism
and he e odox economics indeed goes bo h ways. Among o he s, Bunge men ions John Mayna d
Keynes and Wassily Leon ie (Bunge 2004: 187), Max Webe , Joseph A. Schumpe e ,
Tho s ein B. Veblen, o K. William Kapp (Bunge 1999: 92–93). Mo e ecen examples o
he e odox app oaches compa ible wi h a sys emis pe spec i e include unde s anding
15
economics as he s udy o he social p o isioning p ocess (Jo 2011), e olu iona y economis s’
ocus on he meso le el o economic ac i i y (Dop e e al. 2004), complexi y scien is s’ ocus
on ‘complex adap i e sys ems’ (Simon 1962) o eminis schola s’ concep o gende egimes
(Walby 2016). In sum, hese obse a ions sugges ha he e odox economic app oaches a e
salien candida es o illus a ing a sys emis app oach o social and economic issues and,
con e sely, sys emism se es as a na u al candida e o subs an ia ing es ablished p ac ices in
he e odox economic esea ch om an epis emological iewpoin .
Sys emism: key ideas and concep s
Sys emism is buil upon he undamen al win concep o sys ems and mechanisms, whe e he
la e a e si ua ed wi hin o be ween he o me . The eby any objec o en i y in sys emis
analysis is conside ed ei he as a sys em i sel o as a componen o a sys em (Bunge 1996).
A sys em is composed by a se o componen s (i s composi ion) wi h a pa icula ela ional se up
(a sys em’s s uc u e o o ganiza ion) si ua ed wi hin a ce ain en i onmen . The
in e ela edness o agen s no only con ibu es o he cons i u ion o a speci ic sys em, bu gi es
ise o a a ie y o ‘on ological no el ies’: ha is, some ea u es ha he whole possesses, bu
i s componen s lack (global p ope ies, like a na ion’s cul u e o a i m’s success); o some
ea u es ha componen s acqui e p ecisely because hey a e pa o some sys em ( ela ional
p ope ies, like being a c edi o , a wi e, o an employee; see Bunge 1996). The concep o a
sys em can he e o e be applied on se e al le els. Fo example, a amily is a sys em consis ing
o di e en membe s wi h pa icula ela ions o each o he ; a he same ime, i is pa o a
communi y sys em wi hin which i has se e al ela ions o o he componen s o he communi y.
The esul ing le els ake he o m o a hie a chy o sub- and supe -sys ems, which se e as a
basic on ological amewo k. Such a hie a chical unde s anding o eali y has been sugges ed
by se e al he e odox app oaches, mos no ably by He be Simon (1962).
The second undamen al aspec in sys emism is a ocus on mechanisms, meaning law-like
ela ionships, and he a emp o p o ide mechanism-based explana ions o social phenomena
(Bunge 1997). Mechanisms wo k wi hin o ac oss social sys ems and lead o con inuous
changes and s abiliza ion o a gi en sys em. This is why we concei e o hem “as a p ocess (o
sequence o s a es) in a conc e e sys em, na u al o social,” (Bunge 2004: 186). The eby h ee
ough ypes o mechanisms can be dis inguished. Fi s , wi hin-le el mechanisms ope a e wi hin
social sys ems, bu add ess only one on ological laye ; o example, a educ ion in hou ly
income may induce a household o inc ease wo king hou s. Second, b idging mechanisms also
wo k wi hin a ce ain social sys em bu can ake he o m o agency-s uc u e ela ions (a
16
bo om-up mechanism o upwa d causa ion) o s uc u e-agency ela ions ( op-down
mechanisms o downwa d causa ion). The o me p o ide a heo e ical al e na i e o he
agg ega ion o indi idual beha io , going beyond a me e ‘summing up’ o indi idual p ope ies
by employing heo e ical mechanisms o means o agg ega ion. Examples o such ‘b idging
mechanisms’ a e bandwagon e ec s, whe e inal ou comes depend on he sequence o
indi idual mo es; posi i e eedback e ec s, which may lead o pa h-dependen p ope ies o
social sys ems; o he mu ual dependency o ou comes, whe e indi idual beha io con o ms o
o is cons ained by he beha io o o he s as in he case o a ionali y aps. Finally, he e a e
mechanisms ope a ing be ween a sys em and i s en i onmen (o e lapping and su ounding
sys ems), such as he imi a ion o echnologies o compe i ion among i ms. One example o a
uly sys emis he e odox app oach in eg a ing all hese ele an p ocesses is gi en by agen -
based s ock- low consis en models, which aim o anscend bo h pu ely indi idualis and holis
app oaches (Caiani e al. 2016).
No e ha sys emism is no a heo y, bu a he an on ological and epis emological heu is ic, like
“a iewpoin , o a s a egy o designing esea ch p ojec s whose aim is o disco e some o he
ea u es o sys ems o a pa icula kind” (Bunge 2004: 191). Conside ing his ac and he
undamen al aspec s o sys emis models, we sugges ha sys emism is a well-sui ed
philosophical amewo k o s uc u e he e odox heo izing on he mic o–mac o link as ou lined
abo e. Based on hese conside a ions, he nex sec ion explo es he ela ion be ween he e odox
economic a gumen s and he sys emic amewo k.
He e odox economics in a sys emis amewo k
Bunge’s concep o sys emism does no only p o ide a sui able philosophical amewo k o
he e odox heo izing on he mic o–mac o link, bu also o e s an in ui i e way o exp ess and
concep ualize heo e ical conside a ions on mic o–mac o in e ac ions. The ollowing examples
illus a e his aspec om a p ac ical pe spec i e.
The i s illus a ion is p o ided by Bowles & Pa k (2005), who use he Veblenian concep o
social emula ion o explain he allegedly coun e in ui i e ela ionship be ween ising
inequali y and inc easing wo king hou s (Figu e 10.2). Due o social emula ion o
p e e ences, a highe le el o income inequali y induces an inc ease in consump ion
aspi a ions ac oss households. To li e up o hese aspi a ions, a (sizable) subse o hese
households may inc ease hei wo king e o , which leads o an inc ease o a e age wo king
hou s. A possible ex ension o his a gumen is ha his inc ease in he supply o labo
17
educes he ba gaining powe o wo ke s, leading o lowe wages and u he inc easing
income inequali y, esul ing in a pa h-dependen downwa d spi al.
Figu e 10.2 Income inequali y, labo supply, and economic de elopmen in a sys emis amewo k d awing on
Bowles & Pa k (2005). Sou ce: Au ho ’s own illus a ion, based on Bowles & Pa k (2005).
Ou second illus a ion conside s he eme gence and e olu ion o social con en ions. Hodgson &
Knudsen (2004) discuss an agen -based model whe e d i e s a e o ced o decide whe he o
d i e on he le o on he igh side o a s ee . They s udy he condi ions equi ed o gua an ee
he eme gence o a s able con en ion. While hei majo inding is ha habi - o ma ion is a
p obable an age poin o he eme gence o con en ions, he illus a ion in Figu e 10.3 ex ends
he unde lying a gumen by illus a ing he eme gence o con en ions in a sys emis amewo k
conside ing bo h bo om-up and op-down e ec s.
Figu e 10.3 The e olu ion o a a ic con en ion based on Hodgson & Knudsen (2004)in a sys emis amewo k.
Sou ce: Au ho ’s own illus a ion, based on Hodgson & Knudsen (2004).
These examples show ha Bunge’s concep o sys emism is a away om a me hodological
s aigh -jacke . On he con a y, he schema ic app oach u ilized in hese examples aims a
illus a ing how his app oach can be employed o acili a e concep ual hinking and he c a ing
18
o on ologically sensible heo e ical amewo ks on he basis o a solid epis emological
ounda ion. I u he p o ides a use ul me a-language ha enables he e ec i e compa ison o
di e en app oaches owa ds he mic o–mac o link in he e odox economics and o exploi he
po en ial complemen a i ies among hese di e en app oaches (see also Dobusch & Kapelle
2012 and G äbne & S unk 2020).
Conclusion
The complex ela ionship be ween di e en on ological le els has ecei ed conside able a en ion
in he e odox heo izing. This has led o many impo an independen con ibu ions on he ole
o agg ega es and he issue o agg ega ion in social esea ch, which o en allow he e odox
economis s o mos ly ci cum en ypical allacies o agg ega ion iden i ied in he second sec ion
o his chap e . Ins ead, we demons a e in he second sec ion ha he e exis sha ed pilla s o
unde s anding ac oss di e en he e odox concep ions. Hence, di e en he e odox iews on he
mic o-mac o link a e ypically compa ible and complemen a y, which is why hey can also be
subsumed unde a common philosophical umb ella labeled ‘sys emism.’ This umb ella is a
use ul de ice helping o explo e he commonali ies and di e ences in a ious app oaches o he
mic o–mac o link in he e odox economics. In many cases such compa isons will acili a e a
‘he e odox con e gence,’ as in he case o e olu iona y-ins i u ional and social economics
(Elsne 2017), while in o he cases he ela ionship may ake he o m o p oduc i e
disag eemen . Such an endea o equi es a common concep ual denomina o o he di e en
app oaches enabling mu ual communica ion and compa abili y. We a gue his missing
componen is exac ly wha sys emism can supply.
Acknowledgmen s
We would like o hank Alessand o Caiani, Wol am Elsne , Volke Gadenne, Icia Dominguez
Lacasa, and he edi o s o hei aluable commen s on ea lie d a s o his chap e . All
emaining e o s a e ou own.
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