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A widely accepted belief holds that social economics is logically inconsistent with the pragmatic philosophy. This view has been very clearly and forcibly expressed by Mark A. Lutz at the Third World Congress for Social Economics. Lutz has summarised his conclusions in the following quotation:

Explicates and analyses selected economic methodologies: praxeology, positivism and institutionalism. Praxeology is a rationalistic methodology which utilizes deductive logic to deduce conclusions concerning economic behavior from postulates, which are self‐evident truths, but praxeologists deny that empirical verification is either necessary or desirable. Positivism is a methodology which combines deductive rationalism as a method of deriving substantive hypotheses and inductive empiricism as a method of verifying these hypotheses. Institutionalism is a pragmatic methodology which is based on an empirical epistemology and which utilizes inductive logic to formulate economic policy and to solve practical problems. Concludes that institutionalism is more empirically relevant than either praxeology or positivism, and that, therefore, institutionalism is superior to the other methodologies.

Evaluates the significance of Clarence Edwin Ayres′ contribution to the historical development of the institutionalist school of economic thought. Summarizes Ayres′ philosophy of pragmatic instrumentalism and integrates it into his theory of economic progress, which is disaggregated into its component parts: his theory of normative value; his theory of economic causation; and his theory of economic policy. Thoroughly explicates and carefully evaluates each of these theories. Concludes that Clarence Ayres has made an important contribution to the history of institutionalism by synthesizing the pragmatic philosophy of C.S. Peirce, William James, and John Dewey with the institutional economics of Thorstein B. Veblen, John R. Commons, and Wesley C. Mitchell.

An intellectual symbiosis exists between social economics and institutional economics because the strengths and weaknesses of these two leading schools of heterodox economic thought are complementary. Axiology and goals are the strength of social economics and the weakness of institutional economics. Epistemology and methodology are the strength of institutional economics and the weakness of social economics. The rationalistic and metaphysical axiology of the social economists can be effectively merged with the empirical and pragmatic epistemology of the institutional economists. The resulting symbiotic synthesis will certainly provide the basis for a creative integration of social and institutional economics into a new and improved school of heterodox economic thought.

Makes the distinction between negative freedom or liberty, which means the absence of constraint and compulsion, and positive freedom, which always implies the power to make one′s will effective to gain access to a chosen alternative. Argues that positive freedom can be used either creatively or destructively. The creative use of positive freedom enhances and improves the economic freedom and economic justice that accrues to other people. The destructive use of positive freedom damages and diminishes the economic freedom and economic justice of others. It follows that the government should intervene in the political and social economy to encourage and to facilitate the creative use and to discourage or prohibit the destructive use of positive freedom.

Attempts to specify and to explicate some of the most important reasons for the failure of communism or state socialism. Analyses the general case of Eastern Europe, then applies the analysis to the specific case of Hungary. Second, deduces a model of market socialism from the theories of Fred M. Taylor and Oskar Lange. Argues that the Taylor‐Lange model of market socialism certainly could be and probably would be a completely valid and viable economic system. Proposes, moreover, that this system of market socialism may prove a better alternative economic system than capitalism for the Eastern European nations that have abandoned communism.

Erich W. Zimmermann′s functional interpretation of resources is expanded and elaborated into an instrumental theory of resources, resistances, and economic growth. Both resources, which are useful to man, and resistances, which interfere with the satisfaction of his wants, are defined by technology and redefined by every technological innovation. Therefore, technological innovation can create new resources and can transform resistances into resources by teaching man how to use environmental features which were previously useless. Technological progress becomes the basis of unlimited economic growth. This instrumental theory is used to suggest solutions to problems associated with resource depletion, environmental pollution, and economic growth.

Examines the Clinton administration’s health‐care proposal, for a system of national health insurance in the USA. Investigates whether, if it had been implemented, it would have solved healthcare delivery system problems. Goes on to question why it failed to gain the approval of Congress. Argues that the free market for health care is achieving its own solution through the development of managed care arrangements. Deals with the consequences of managed care for the US economy.

Contrasts the methodologies and policy implications of the respective theories of John Maynard Keynes and Alvin Hansen. Keynes used a rationalistic epistemology and deductive logic to deduce a pure theory of employment which implied that monetary policy would be an appropriate remedy for unemployment. Hansen used an empirical epistemology and inductive logic to formulate an applied theory of employment which explained the causes of the Great Depression in the USA. Hansen′s theory of secular stagnation implied that a compensatory fiscal policy would be an effective remedy for unemployment. The respective theories of Keynes and Hansen are complementary, rather than contradictory; therefore, social economists should utilize both of these theories under appropriate circumstances.

Explains that Michael Polanyi was an internationally reputed philosopher who may be remembered as the greatest epistemologist of the twentieth century. The one aspect of his philosophy which has been neglected is his philosophy of history. Sets out to explicate Polanyi’s interpretation of the history of the late modern period. He emphasized the historical importance of three revolutions: the French Revolution; the Bolshevik Revolution; and the Hungarian Revolution. Polanyi called for a return to traditional moral values, such as truth, justice, and love. Presents a clarification of Polanyi’s interpretation of late modern history which it is hoped will contribute to the resolution of the crisis which threatens contemporary civilization.