Social economists' claim to fame is that, in contradistinction to the neoclassical paradigm, they explicitly include values and the process of value formation in the modeling of economic reality. There is no such animal in this scheme of things as an autonomous, utility-maximizing, rational economic man. Instead, by including issues of morality, and the ways in which individual members of social groups learn to behave, social economics' paradigm provides a richer and more accurate explanation of economic reality than the neoclassical.
This broader approach also makes social economics more open to alternative techniques when it comes to providing illustrations and examples, especially examples that can be used in the classroom. Being free of the strait jacket of formal mathematical modeling when developing an argument or analyzing an issue means that it is easier to use examples from everyday life or from artistic representations. This explains the "art" in my title; more precisely, the art of the wordsmith. I intend to explore some important modern problems - product safety, privatization of natural resources, urban congestion, and corporate mergers and acquisitions - to see how the insights of writers and filmmakers can be usefully incorporated into economic analysis and the understanding of modern reality.
Let us now briefly outline the main characteristics of modern economic reality that economists seek to explain. Over most of the globe, industrial or post-industrial market capitalist systems prevail, so that the dominant coordinating mechanism for economic activity is the market relationship, albeit constrained in various ways by social or political institutions and behavior patterns. Economic behavior, however, only partially resembles the competitive model described in economics principles texts, because corporate interests are better served through control of the market. Hence a continuing process of corporate mergers and acquisitions, most particularly in the advanced capitalist economies, has resulted in high levels of market concentration. Textbook analysis also implies convergence of living standards. However, improvement in material living conditions has been concentrated in the small group of advanced, mostly Western, societies, and income distribution is highly uneven, both between and within societies. Although some people with special skills or with links to the more powerful economic sectors have achieved significant income gains, many others have experienced falling incomes.
Globalization - the spread of production, distribution and consumption across national boundaries - has also accelerated. This process has taken place under the control of a relatively small number of large transnational companies, which have often been in the forefront of technological change, and which are often able to ignore the constraints imposed by the nation-state (frequently because it is unclear which nation-state should exercise control over them). Globalization has also been aided by improvements in communications and transportation technologies. The combination of high technology and globalization has dramatically increased mobility in many world markets - with the financial markets being the most publicized examples - which has increased instability (Brown 1992: 384). The erosion of the power of the nation-state as a result of globalization has also eroded the ability to offset instability effectively: the problems worsen with no corresponding growth in the power to deal with them. While there has been an increase in regional groupings of countries to improve their situation - the best known being the European Union - managing crossborder problems is extremely difficult. Some of the economic problems that spring readily to mind include continuing poverty, income inequality, pollution, urban traffic congestion and other types of overcrowding, and resource constraints; a related non-economic problem is the potential weakening of political democracy under pressure from powerful corporate interests. …