The Competitiveness of Nations in a Global Knowledge-Based Economy

C Methodology

The question remains: is there a disciplinary tradition broad enough to intellectually accommodate the wide-ranging and disparate factors, forces and interactions at play in the competitiveness of nations in a global knowledge-based economy? In many ways this relates to Boulding's question:

The founding father of economics, Adam Smith, had a strong sense of the cultural matrix of economic phenomena. One of the most interesting of the unasked questions of intellectual history is how the science of economics should have lost this sense and become an abstract discipline void of almost any cultural context (Boulding 1972: 267).

In fact not all schools of Western economics lost sight of the role of culture, custom and tradition. Rooted in the German Historical School of the late 18th and early 19th centuries (Schumpeter 1949: 807-824), one school maintains the linkage - Institutional Economics. This school includes American economists Thorstein Veblen, John R. Commons, W.C. Mitchell and Clarence Ayres, as well as European economists Max Weber, Sydney and Beatrice Webb, Selig Perlman and Joseph Schumpeter whose work stressed the influence of class, technological change and institutional setting on economic behaviour (Schumpeter 1942: 1949).

Like mainstream economists, Institutionalists consider the competitive marketplace the most efficient and effective institution ever devised for economic production and consumption. However, they recognize: the trade union as a legitimate political institution functioning in the economic arena (Commons 1909); the impact of culture, custom and tradition (Veblen 1899); and, the effect of law on the nature and form of economic behaviour (Commons 1926).

Legal and cultural relativism is also part of the legacy of Canadian economist Harold Innis, particularly his work on the economic impact of communications technologies (Innis 1950, 1951). He recognized that all scholarship must be grounded in analysis of the radical particularities of time and place, history and geography (Carey 1981: 79). One of Innis' colleagues, Marshall McLuhan, took this relativism, first to the medium is the message, and then to human consciousness altered by the emergence of new electronic communications media (McLuhan 1978). In many ways, Innis is the Father of the Information Economy (Porat 1977). He was the first to recognize communications media as an economic staple.

The primary methodology of the Institutionalist tradition is what can be called transdisciplinary induction. In essence it involves drawing together evidence - quantitative and qualitative - from all knowledge domains embracing as many disciplines and national scholarly traditions as possible (Commons 1931). It aspires to synthesis. Analysis reduces a phenomenon into parts to gain an understanding of each and then reassembles this resulting partial knowledge into an understanding of the whole. Synthesis, by contrast, involves combining diverse conceptions into a coherent whole.

Transdisciplinary induction will be used to attain the primary objective: to demonstrate and, to the degree possible, test if interaction or, more appropriately, interphasing of knowledge domains in the daily life of an economy determines the competitiveness of nations in a global knowledge-based economy.


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