Analytical Scope

This refers to the boundaries of ENL's subject matter, the range of topics for which the framework takes analytical responsibility. ENL is exclusively a guiding framework and is not intended to replace economic thought as a whole.

It provides concepts and analytical tools to establish rational economic objectives, but has nothing to say about an economy’s operational details. Another type of economic theory, referred to here as a functional framework, must be employed for this purpose.

The distinction between the two is addressed further in the discussion of contractionary economics.

A strong temptation that must be avoided in developing a guiding framework is to cast the net too wide, thereby inviting non-economic issues into an economic theory. This is frequently the response of progressive economists when faced with the insularity of most mainstream approaches.

A typical example is the work of Neva Goodwin, a heterodox economist at Tufts University:

…I have been working with a number of colleagues to develop an alternative [to standard economics], which we call contextual economics. The name comes from our conviction that an economic system can only be understood when it is seen to operate within a social/psychological context that includes ethics, norms and human motivations, culture, politics, institutions, and history. It also operates within a physical context which includes the built environment, as well as the natural world.1

From the perspective of a guiding framework, this pluralistic approach completely misses the mark. To overcome the destructive logic of capitalism it is an error to broaden the boundaries of economic studies because this will simply disguise the true nature of this logic. We should instead confront it head-on, expose its errors, and replace it with a coherent non-capitalist logic.

The fundamental problem with standard economics is not its context, but its contents. The likely result of the pluralism espoused by Goodwin and her colleagues will be to perpetuate expansionary economic thought into the indefinite future.

ENL avoids this trap by adopting a narrow analytical scope. This focuses attention on the economic logic itself and thus avoids diluting it with non-economic concerns.

The framework's analytical boundaries are established by first noting that the ultimate purpose of an economy is consumption, which is defined as the assimilation and utilization of outputs to satisfy human consumption desires.

For consumption to occur, outputs must be assigned to consumers, a social act called distribution.

Distribution in turn requires that outputs are produced, and production requires that inputs are allocated to the desired outputs.

ENL's analytical scope is this chain of core economic activities: humankind's allocation, production, distribution, and consumption, plus any directly related activities and considerations. ENL tries to adequately address these topics, but it intentionally avoids extending its reach any further.

Another good reason for a narrow analytical scope is that it isolates the purely economic rationale for an action or policy, thereby permitting this rationale to be explicitly balanced against non-economic factors. Although ENL's conclusions reflect critical aspects of social life, other modes of thought are also important.

ENL takes the viewpoint that mature social decisions will arise more readily from the interaction of several tightly focused, well-defined analytical frameworks than from a single diffuse framework.


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