Nature of Being or Reality - Essay Example

Section Ontology Ontology is the study of nature of being or reality. The primary focus of ontology is to answer questionsconcerning entities that exist or those that can be said to exist. The concept also studies the grouping of the existing entities and their relationships within a hierarchy. According to Pihlstrom, ontology deals with the determination of whether various categories of being are fundamental in addition to seeking the sense in which categories of being are said to be1. People know reality through the study of knowledge and understanding. Philosophers categorize ontology in various ways using criteria such as the field of application and degree of abstraction. The basic classes of ontology available include upper ontology, process ontology, domain ontology, and interface ontology. Ontology focuses on status of reality, which can either be dependent or independent. Independent reality implies that reality does not depend on human interpretation2. Human beings have their own ways through which they interpret various aspects affecting their lives; when their interpretation of life does not determine the definition of reality, philosophers refer to that type of reality as independent reality. Dependent reality, on the other hand, implies that the meaning of reality depends on how human beings interpret the state of being. In this case, human beings are the determinants of how reality is interpreted. Positivism Positivism, as a philosophy of science, posits that the exclusive source of knowledge constitutes information derived from logical and mathematical studies plus the reports of sensory experience. According to the positivists, exclusive knowledge must be based verified data derived from empirical evidence. Empirical evidence refers to facts derived from scientific research as opposed to hearsay. Schroeder and Chester contend that positivists believe that the society operates according to general laws, just like the physical world3. Positivism subscribes to the belief that the study of the social world is similar to the study of the natural world. The natural world actually exists and its study depends on clearly observable features. Positivists believe that it is possible to understand the casual mechanisms characterizing the political economy just as it is done in physical sciences (Horwitz and Koppl 32)4. The primary objective of positivism science is to discover the universality of the aspects under investigation. For example, if positivists want to understand causes of poor economic performance, they focus on the actual factors that lead to poor performance of the economy. Positivism requires measurable phenomena to act as valid evidence to support scientific inquiry. Additionally, it is critical to have simplicity of explanations and big data for generalizations; big data s collected through quantitative methods. Quantitative methods involve explaining phenomena by collecting numerical data and analyzing it using statistical methods (Fleisher & Bensoussan 76)5. The foundations of quantitative research methods include realism, subjectivism, and paradigm wars. Laissez-faire Tyssen, Wald and Spieth asserts that laissez-faire leadership is characterized by delegation where organizational leaders are hands-off6; this implies that leaders allow employees to engage in independent decision-making and perform their responsibilities in the ways they deem is best. Warren Buffet, for example, applies laissez-faire leadership in managing their employees. The CEO of the company believes that people work best when they are given full autonomy over their organizations. Laissez-faire, however, may minimize the level of productivity and is not ideal for organizations lacking highly qualified, professional and motivated employees. During the intensification of the liberal tradition, Adam Smith stressed the necessity of policies privileging laissez-faire. Smith implied that there should be minimal intervention by the state into the economy. Giuliani, Rudolp and Kurson argue that laissez-faire leadership leads to improvement in organizational performance since it gives autonomy to organizational members, ensures job satisfaction and increases the level of motivation among group members (32)7. Smith supported laissez-faire leadership because he believed that a market economy consisted of the natural order of things. Laissez-faire, however, failed in the United States when the president of the country permitted subordinates to do things in their own ways during the onset of the economic depression in 19298; this is believed to be the factor that worsened the financial recession of the 1930s. John Maynard Keynes John Maynard Keynes came up with the general theory of employment, interest and money in 1936. He also foresaw the end of laissez-faire in 1926. Here, Keynes showed people the significance of breaking from the classical liberal tradition of laissez-faire and allowing government intervention by citing ramifications associated with allowing citizens to do things n their own ways (Ravenhill 15)9. He showed the necessity of government intervention in bringing about market equilibrium and saving capitalism. Keynes pioneered the founding of contemporary liberal approaches to the economy. Keynes expressed widespread acceptance of the argument of capitalism, instability and the inevitability of economic recession10. According to Keynes, the economy cannot completely eliminate economic instabilities and recessions; the economy must rise and fall as it is establishing equilibrium. He argued that under-consumption was the primary cause of economic crises. People must consume the goods and services since it accounts for nations’ economic development. In political economy, Keynes argued that the ideas of economists and political philosophers are more powerful than is commonly understood regardless of whether they are right or wrong (Schroeder and Chester 65)11. Politicians command a lot of respect from the people and whatever they say is fallaciously accepted without further scrutiny. Spontaneous Order Spontaneous order refers to the unintentional, but critically beneficial actions of people that feature in market transactions. Although entrepreneurs are guided by self-interests, they accidentally perform social roles in coordinating economic knowledge, which produce outcomes that appear as if they were designed and predicted by an expert, but clearly they could not have been12. Regardless of some form of control that happen in markets, the reality is that this form of control is not based on rationality since participants are not aware of their market influence. Friedrich von Hayek believed that markets were products of spontaneous order. By spontaneous order, Friedrich meant that all happenings of markets consisted of people’s unintentional actions. The reason for this argument was based on the assumption that the knowledge of human beings is limited; hence, markets are beyond the rational control of any authority. However, in a free market economy characterized by perfect competition, buyers and sellers are believed to have full knowledge of markets and authorities have no control of markets13. Thus, the spontaneous order as defined by Friedrich differs from the contemporary view of markets on the aspect of knowledge. In the current world, people engage in extensive research to understand markets, and aspect that could have lacked during Friedrich’s era. Section 2 (Question 2) Introduction Political economy is the interaction between economics, law and politics14. Political economy focuses on the development of institutions in different social and economic systems such as communism, socialism and capitalism. The primary focus of political economy is the creation and implementation of public policy. March and Olsen define an institution as a collection of standard operating procedures and structures that define and defend interests. Institutions are believed to have widespread influence on the economy15. Institutions provide structures to daily lives, thus, shaping human interaction. Influence of Institutions on Political Economy The role of institutionalism on the development of a political economy is to offer explanations concerning the development of the political economy. Institutions are the independent variables and causal explanations of the political economy. All economic outcomes that color in a political economy are made possible by the institutions. The political economy requires economic performance and change (Dunn 22); institutions boost economic performance through enhancing stability and continuity to the dynamic nature of economic relations and market activity. Institutions have decisive influence on investments in various sectors such as industrial production, physical and human capital, and technology. The prevailing institutions depend largely on the allocation of political power among the political groups. Institutions in a particular society determine the incentives and constraints faced by key players in the political economy. Tyssen, Wald and Spieth argue that given the endogenous nature of institutions and strategic allocation of powers the political economy provides, appropriately selected institutions have the potential for helping develop credible mechanisms that can decrease risks of opportunistic behavior of political players (60). This implies that institutions provide incentives for the political economy to abide by as the players pursue their goals. Institutions provide constraints that shape human interaction through providing structures to everyday life. Since institutions affect individual action, they have widespread impact on individual decision-making. Institutions are the cause of economic outcomes. Early institutions were primary functionalism because they emerged to serve the functional needs of the system. Jenson and Merend describe an institution as a set of formal rules and informal norms that are persistent over time (84)16. The authors add that an institution is always a pattern of social relations; these social relations can be competitive and oppositional featuring inequalities in power relations. Institutions have defining features such as the mandate bestowed upon particular institutions, jurisdiction, institutional capacity and institutional complimentarity. Political economy focuses on what should be done, determines power and authority, mechanisms held by various institutions, and relationship between institutions17. Institutionally, the mandate bestowed upon a particular institution determines the roles of such institution. The jurisdiction of an organization determines the parties over whom power and authority apply. The institutional capacity focuses on the mechanisms that an institution has to uphold. Furthermore, institutional complementarity addresses the relationship among organizations. Through focusing on the critical factors of the political economy, institutions accelerate the growth of political economy. Early institutions emphasized the concept of functionalism. Functionalism implies that institutions were created to serve the functional needs of the political system (Pihlström 59). The sole purpose of creating institutions such as the World Bank, International Monetary Fund, the Military and academic institutions was to enable political systems rule their people through division of labor and specialization. The existence o these institutions streamline the functions of political systems, leading to improved performance of these systems. The prosperity of functionalism acts as a reinforcement for institutional development. This results in institutional spill-over to other sectors of the economy. Political economy is one of the benefiting from this spill-over. Ravenhill asserts that institutional complementarities lead to reduction of transaction costs, leading to increase in overall economic efficiency (18). However, functionalism has been identified as one of the factors downplaying the role of human agency and taking politics out of institutional approaches to political economy. Potential Problems of Institutionalist Analysis According to Clift, the potential problem is determining how economically efficient institutions win-out. Additionally, institutions have not been examined within the broader social context of power relations. Another potential problem with institutionalist analysis is that that institutions are competitive and oppositional, featuring widespread unequal power relations18. Competition is rampant in an economy and the greatest participants in this competition are institutions. During the process of competition, institutions become the products of socio-economic conflict. Thus, institutions are described as sites of continuous social contestation. Effectiveness of critical institutionalism in redressing potential problems of Institutionalist Analysis Critical institutionalism is a contemporary body of thought that explores the role of institutions in dynamic mediation of relationships between people, natural resources and society. Across these aspects, organizations focus mostly on power relations among the participants. The emphasis on power relations that animate institutions necessitates the presence of social justice lens for scrutinizing the outcomes of institutional processes. Critical institutionalism has the potential for redressing problems of institutionalist analysis. Addressing the problem institutionalist analysis, according to Jenson and Merand, requires bringing politics back in because institutional survival will result from political skirmishing19. Jenson and Merand further assert that critical institutionalism believes that institutions arise from rational choice by powerful interests20. By rationality, the authors imply that institutions make choices based on reason and seek to maximize utility. Utility is the ability of a good or service to satisfy human wants. Institutions, therefore, should focus on making rational choices if they want to win-out from various alternatives. Critical institutionalism is effective in addressing problems of institutionalist analysis since the aim of designing or altering critical institutions is to ensure optimization of strategic economic outcomes (Jenson & Merand 84). This will enhance the efficiency through which institutions win-out; hence, addressing Clift’s problem of determining how economically efficient institutions win-out. Critical institutionalism makes it possible to pay attention to social relations, agency and power without ignoring formal institutional developments. Social relations foster social research and collective consciousness, which are critical in enhancing social cohesion. Through social relations, critical institutionalism addresses the problem of minimal examination of institutions within the broader social context of power relations. Critical institutionalism emphasizes the necessity of disseminating ideas at the level of civil society and not merely through state propaganda. Conclusion Institutions have several influences on the political economy; these include offering explanations concerning the development of the political economy, influencing on investments, providing constraints that shape human interaction, accelerating the growth of political economy and emphasizing the concept of functionalism. Clift identified various potential problems associated with institutionalist analysis. Critical institutionalism can address the potential problems associated with institutionalist analysis because it explores institutions in a dynamically mediated relationships, it views institutions as results from rational choice by powerful interests, and pay attention to social relations, agency and power. Works Cited Dunn, Bill. The Political Economy of Global Capitalism and Crisis. Abington, Oxon: Routledge, 2014. Print. Fleisher, Craig S, and Babette E. Bensoussan. Strategic and Competitive Analysis: Methods and Techniques for Analyzing Business Competition. Upper Saddle River, N.J: Prentice Hall, 2003. Print. Giuliani, Rudolph W, and Ken Kurson. Leadership. New York: Hyperion, 2002. Print. Horwitz, Steven, and Roger Koppl. Entangled Political Economy. Bingley, UK: Emerald, 2014. Print. Jenson, Jane and Frederic Merand. “Sociology, institutionalism and the European Union.” Comparative European Politics 8.5 (2010): 74-92. March, James G, and Johan P. Olsen. Ambiguity and Choice in Organizations. Bergen: Universitetsforlaget, 1994. Print. Pihlström, Sami. Pragmatist Metaphysics: An Essay on the Ethical Grounds of Ontology. London: Continuum, 2009. Print. Ravenhill, John. Global Political Economy. New York; Oxford University Press. 2014. Print. Schroeder, Susan K, and Lynne Chester. Challenging the Orthodoxy: Reflections on Frank Stilwells Contribution to Political Economy. Heidelberg; Springer. 2014. Print. Tyssen, Ana K., Andreas Wald, and Patrick Spieth. "Leadership In Temporary Organizations: A Review Of Leadership Theories And A Research Agenda." Project Management Journal 44.6 (2013): 52-67. Read More