Page 46 - Azerbaijan State University of Economics

Nalin Ranjan: Understanding Epistemology and Methodology in Adolph Lowe’s Political Economics

The above schematic diagram is indicative of steps required in economic planning based
on instrumental inference. Goal setting and the description of initial state should inform
each other as the description of initial state should be relevant to the macro-goal. The
diagram shows that the feasible goal-adequate paths may involve all the three sectors
namely industry, agriculture and services and the motivations and behaviours of economic
actors in all the three sectors are assessed for establishing goal-adequate controls, which
must be chosen from a bouquet of price and non-price controls.

INSTRUMENTAL ANALYSIS: AN APPRAISAL
Moving on to operational difficulties with instrumental inference, a situation which
may arise in the process of instrumental reasoning is the absence of any path relating
the initial and terminal states. In that case the planner must see whether the description
of initial and final states is compatible or not as we know that the description of initial
states can be done in multiple ways but the relevant way to describe initial state is to
describe in accordance with different parameters of final state. If despite the
description of initial and final states being compatible, there is absence of any path
then the planner has option to assess what changes can be brought in the initial state
itself to have a connecting path to the final state, after that attempts should be made
to achieve the changed initial state first and then progress must me made towards the
final state. Certain goals can be incompatible with the initial state and demands
altering the initial state itself first. For example, the goal of equitable distribution may
not be compatible with the existing property relations in a society and thus first
altering the property relations may pave the way towards the achievement of equity.

Instrumentalism’s engagement with behaviour and motivation is not about knowing
all kinds of them possible in the universe; rather it is concerned with only those
motivations and behaviours which are contextually relevant for achieving the goal in
order to find certain controls to discipline the existing motivations and behaviour on
those lines. Unlike conventional economics, if behavioural assumptions are
unfounded, instrumentalism does not fail. As earlier pointed out that instrumental
analysis is a discovery procedure and if target remains same, we can always arrive on
existing behaviours and motivations with some probabilities through an ongoing
process. This conceptualisation of economic knowledge in Lowe’s political
economics may be seen as an epistemological reconstruction of economic knowledge
which not only offers an evolutionary perspective on economic theory embedded in a
society but also a theoretical basis for decision making in economics.

Attempting to design the edifice of control conducive to achievement of macro-goal is
the most challenging task in the Lowe’s political economics because in contemporary
globalised world, high degree of freedom of individual units has become order of the day.

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