"A Study on the Contested Exchange Theory of Samuel Bowles and Herbert Gintis" Full Text in Korean



In this paper, the contested exchange (CE) theory of Bowles and Gintis is examined. Baiscally, the theory is based upon two propositions: endogenous enforcement and endogenous preference. It implies critique of neoclassical propositions of exogenous enforcement and exogenous preference.

The theory can be divided into three main contents.

1. According the theory, contested exchange has 'short-side power' relation which arises from asymmetric location. Thus democratic exercise of power should be emphasized in as economic sphere as political sphere. The theory is similar to the public choice theory in that both theories necessitate integration of economic and political analysis. But, while the former shows that economy is public sphere, the latter shows that politics is private sphere.

2. The theory argues taht a democratic firm is more efficient than a capitalist firm in respect of labor effort, whereas the former is less efficient than the latter in respect of risk-taking. The fact that a type of capitalist firm is dominant in real economy, however, reflects not efficiency but evolutionary aspect of institution. CE theory and transaction cost theory both point the voluntary aspect of employment contract and hierarchy of production system. But the former emphasizes evolutionary aspect of institution, whereas the latter thinks little of that.

3. In contested exchange, strategical behavior and its structure have an influence on the preferences of exchange partners, and preferences and social norms are formed endogenously by economic institutions. Therefore the exogenous preferences proposition of neoclssical welfare theory and economic policy should be reconsidered.

The methodology and social philosophy of the CE theory is reviewed as follows.

The theory is based on Marxian insight into capitalist production process and endogenous preference, Institutional tradition which concerns the economic power and institution, and Keynesian thought of non-clearing equilibrium and involuntary unemployment. The theory is post-Walrasian which means neo-institutionalistic modification and extension of Walrasian Model. The CE theory considers efficiency and evolution of economic institution simultaneously.

The CE theory is post-liberal, contrasted with Nozick's individual liberalism, Rawls' equilitarian liberalism, and Walzer's communitarianism, because it uses the notion of individual rights in traditional liberalism, but it has implication of communitarianism.

The theory employs notions of structural functionalism which asserts social system is consisted of parts of organism, but it attempts to explain conflicts of social reproduction systems. In this sense, it takes a position of radical structural functionalism.