Emil Dinga

Economist, Ph.D., the Romanian Academy, President of the Romanian Society for Economics Philosophy, with expertise in the epistemology, philosophy and logic of economics

A Single European Tax?

Emil Dinga

The European budget is the main financial tool by which the process of economic integration and convergence is driven within the European Union. In the European construction, we can identify four tools aimed at initiating, conducting, and finalizing such a construction:An axiological tool: the set of European values on which and for which the European construction is initiated and made. Although a properly European set of values is still undergoing crystallization, many of them are in force and guide the formation of purpose and establishment of actions. This tool represents the final cause of the European construction;
A political tool: is the most important and productive tool. In fact, the European Union is a deliberative social construction, underwritten by an intellectual project[1]. Moreover, the European construction is based on fundamental political documents – the treaties – as primary macro-norms, which generate all the secondary and tertiary norms (communitarian legislation) to design the path of European construction. This tool represents the formal cause of the European construction; More

The Concept of Economic Capillarity

Emil Dinga

The term capillarity belongs, from a historical point of view, to physics, but it has been taken over, in terms of its general, philosophical significance, both by psychology and sociology, as well as by historical science. From a semantic point of view, capillarity indicates a property of a phenomenon or of some entity to evolve (from a spatial point of view or structural-functional properties) in a manner contrary to all laws and mechanisms known and accepted as governing the phenomenon or the respective entity. The classic example of capillary is that of a liquid that, in a tube narrow enough that its surface tension exceeds the value of the gravitational force, instead of moving down (more precisely, in the direction of the source of the gravitational force), moves in the opposite direction. More

A Short Behavioural Analysis of the Changes to the Social Security Tax in Romania

Emil Dinga

Starting with January 1st 2018, the payment obligation which is automatically withheld regarding the social security contributions (for state pensions, health, and unemployment insurance) will be moved from the employer to the employee. In order to preserve the nominal net wage, the nominal gross wage was increased by an adequate rate. In fact, a combination of nominal gross wage increases and contribution rate decreases was used to this end. I would like to broach some predictable effects of the mentioned normative measure: a) the monetary illusion effect; b) the nominal income effect; c) the consumption and savings effects; d) the effect of social solidarity erosion; e) the efficient wage effect. More

From the Intelligent State to the Responsible One

Emil Dinga

The state is not a manager only with regard to the society as a whole. If it was to be like that, a performant computer could have better accomplished whatsoever administrative tasks. The social contract on the basis of which the state is supposed to be generated implies both much more and much less than that. Let me provide some analytical explanations: More

The Market Economy – Between Self-Testability and State Intervention

Emil Dinga

In principle, a market economy is understood as that institutional structure of a society which allows the self-regulation of the economic system. It should be noted that the freedom of the market is not sufficient to either ensure or guarantee such a self-regulation. Despite the fundamentalism of the libertarians, there are many cases (not accidentally, but necessarily) when the free market fails to self-regulate. I want to insist on the idea that such a structural incapacity should not be interpreted from a moral point of view, but objectively (in such a perspective, the so-called market failures are well known). I do not discuss here the issue of the free market failures, but a larger issue: could we really speak about an area of social (or economic) activity where the state is “allowed” to normatively intervene and, correlatively, about a “sacred” area of the social (or economic) activity where the state is “not allowed” to normatively intervene? More

The Three Kinds of Money

Emil Dinga

Recent polemics linked to the fate of the so-called “2nd pension pillar” in Romania (the obligatory privately-run pension, as opposed to the optional private one) has brought to mind an older issue regarding the nature – public or private – of money. Since one of the questions raised by the mentioned discussion is just the nature of the money collected by the state and transferred automatically to the preferred obligatory private pension fund, I will underline some considerations in this article. More

Rebuilding Economics: Propaedeutic Assertions

Emil Dinga

In the last decades, the economic discipline in its hypostasis of Economics (i.e. positive economic theory) was, and also currently is, subject to radical and massive criticism not only from the non-economists (including physicists!), but also from notorious economists, including Nobel Prize winners. The perspectives of such criticisms are very different, starting from the conceptual bases, focusing on the methodological framework, and ending with the predictive potential. Of course, although the initial criticisms were focused on the mechanical ways of economic thinking (by taking over the Newtonian paradigm in physics), other points came to the forefront in recent years: the required interdisciplinary character of Economics, the issue of truth in the economic field (in a wider sense: in the social field), the required evolutionary nature of Economics, because of the evolutionary nature of the society, and even the requirement of a new formalism in Economics based on something other than differential equations (which do not indicate the dynamics – i.e., the causality – in the economic process) and so on. More

Politics and Policy

Emil Dinga

In the vernacular language (even, in some cases, the specialized one) some confusions or, at least, some un-intentioned substitutions occur between two terms (and, consequently, between two concepts which belong to them), namely politics and policy. Of course, etymologically the two terms (and concepts) are cognate, based on the Greek term πόλης, polis (castle, home, town, country) but, in the modern and contemporary language and habits of usage, they hold different meanings, and so address different referentials (denotations). Below I would try to identify both the similarities and differences between politics and policy and, consequently, to suggest some precautions in using them in different situations, either cognitive or pragmatic. More

The Structural Incompleteness of Economics

Emil Dinga

As I understand it, in the economic discipline there are two major paradigms in the sense that Thomas Kuhn employed the word, to mean modes of thought:a) the neoclassical paradigm (the still current mainstream);
b) the behavioural paradigm (the dissident current).
Keynesianism and its avatars (new and post-Keynesianism) could be considered as properly fitting with the neoclassical model although, as it is well-known, Keynes anticipated the so-called behavioural economics (see, for example, the concept of “animal spirits”, also approached by Akerlof and Schiller). In my opinion, both paradigms are incomplete regarding some crucial, structural issues. The examination of this heretical assertion is the goal of this article. More

Will We Face an Economic Uncertainty from the Current Political Instability?

Emil Dinga

By a system instability we must not understand a general fluctuations or oscillations of the system in its entirety. The instability of a system is done by only a few number of its components, but they must be crucial for the system identity/personality (the so called hub components). More, not any fluctuations or oscillations should be qualified as being instability, but only these fluctuations or oscillations which either are unpredictable (in their entirety or partially), or pass beyond a threshold usually accepted. This threshold could be viewed either as size, or as duration. So, the instability is, in fact, much lesser than it is usually considered. More

On the Law Enactment Trap

Emil Dinga

A free society is that society in which the general law governs, that is, the law which concerns all the members of society in relation to the norm which that general law establishes. And, on the contrary, society is not free when the private law governs, that is, the law that concerns only a very small number, a minority or, to the limit, an individual or a few individuals. Such a law is also referred to as a privilege (private law). The current effervescence in Romania on amending the laws of justice is an example within reach for philosophers of law, but also for social philosophers or moral philosophers, to reflect on this fundamental aspect of freedom (I refer here to the concept of individual freedom, which is the source of all punctual liberties, which must under no circumstances be confused) in the Romanian society. More

The Absorption of Uncertainty and Exiting from the Pandemic

Emil Dinga

The individuals (and, to some extent, the groups) make decisions based on their perception regarding the future, rather than on a rigorous calculus based on accurate models of rationality (such a conclusion has long been reached by the researchers, and, very curiously, even by some economists!). The perceptions are, in fact, an inextricable mix between information, experience and expectations. And, of course, all of the three ingredients are tinged with uncertainty. Uncertainty is very different from risk – while we can assign to the risk some probability distributions in order to “know” it at least probabilistically, this cannot be done with uncertainty – an obvious clarification given by Frank Knight almost a century ago. Even more, the question of uncertainty in the decision process arises when the public decision-making is involved because: More