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21.10.2020

Relational Economics is trying to provide a richer view of economic and social aspects.

LEIZ: Prof Lucio Biggiero at the Relational Economics Conference in Friedrichshafen
LEIZ: Prof Lucio Biggiero at the Relational Economics Conference in Friedrichshafen

"Professor Biggiero, as well as being full Professor of Organisation Theory and Design at the University of L’Aquila, you are Professor of Design and Management of Inter-Organisational Networks at the same university. As a member of the editors’ board of the book series ‘Relational Economics and Organization Governance’ which was initiated last year you have now been holding a workshop at Zeppelin University on Relational Economics and the social network analysis approach. 


When addressing Relational Economics, one immediately thinks of social networking. What is your main focus within your social network analysis approach?"
I study economic networks, especially inter-firm networks and international trade networks. My focus is not on Facebook etc. but on real persons and organisations.
When I look into social-psychological aspects, I mainly focus on trust, reputation and identification processes. How and why do people identify with their organisations, how do organisations identify with their territory, especially when it provides some special quality, or why do they trust one another?
Whenever you speak of relations you should also think of networks. I would like to draw a line to the pandemic; networks are as much a distribution of relations as the pandemic is distributed by people, like a virus is spread on mobile devices or computers. Spreading the virus requires networks and this happens through connections.


What re-thinking is needed in order to implement your specific scientific approach?
Usually, we are used to thinking in terms of particular attributes, such as tall, small, fat, high-income etc.. We grew up looking into attributes, and scientific research was looking into attributes, using statistics to take attributes into account, too. Therefore, you can say that reality is created by attributes.
However, since reality is also created by relationships, we should start learning and viewing this other dimension.
Actually, relational structures are in another ontological dimension. In viewing the relational dimension, we need a change in our cognitive approach to reality – something that is set deeply in our minds. Thus, we have attributes on the one hand and relations on the other.


So far, standard economics has dealt with answers that primarily capture only a very small fraction of what a relation contains. Economic relations are also social relations, and even in these there are so many other aspects, for example, prices. The pure price system is a caricatural way to look at reality because price systems are only partial epiphenomena of socio-economic (and natural) structures. The relational system is much richer and more complicated.


We have to take into account the richness of relationships – not only quantity and prices. Relational Economics is trying to provide a richer view of economic and social aspects.


With the different fields we are looking at we have different points of view, for example, from a territorial level, an industry level and a company level.


Is there something like an outline of learnings or even clear goals you want to achieve with this research into Relational Economics?


Every new approach also needs to consolidate a research group. Like a baby – everyone is born weak and needs to be fed. What we are trying with Josef Wieland is to catalyse an embryo in Relational Economics. We are doing this by combining other streams of research, such as Evolutionary and Behavioural Economics, Relational Sociology and Analytical Sociology.
In my view, these relatively recent streams of research have formed a variegated theoretical background on which relational economics can grow and be used as a sort of “glue” to combine all those streams. For me it is very important to stress the relevance of complexity science. Standard economics research usually totally overlooks complexity by oversimplifying real phenomena. A researcher in this field shoud decide: do I build a model that is mathematically elegant and fits the mainstream but is often unrealistic, or do I want to say something that has to do with reality?


So, we have to consider the reality. Furthermore, we should produce something that can be applied.


Everybody knows that theorising means abstracting, but the problem is how much and from what do we use abstractions. If we supposed ourselves to be immortal or perfectly rational or omniscient, perhaps we could build elegant mathematical models but couldn’t depict and predict real-world economic facts. Ultimately, the question is whether our learnings can be of use to the economy and to society.
With the editors’ board of the aforementioned book series the embryo is developing and formalising. Within the new series with Springer publishers: "Relational Economics and Organizational Governance" we communicate these important findings. The first book of this series will be "The Relational View of Economics – A new research agenda for examining relational transactions".


What advantage do you see in this context pertaining to the newly set up Relational Economics research interest group of highly esteemed scientists?
Sharing a common set of ideas and thus not producing something irrealistic that nobody will use. Let’s be clear: irrealism is an all but new criticism of standard economics. What makes it a renewed and definitive argument is the growth of complexity science, which produces two fundamental outcomes. On one side, it showed that social-economic phenomena are much more complicated than what was previously believed. Hence, the inadequacy of standard economics is being revealed now. On the other side, after having demolished the illusion of building a general, complete and consistent economic science, complexity science has nurtured and enhanced the development of new powerful methodological approaches, such as network analysis – which was the subject of my visit to your university – and agent-based simulation modeling, which hopefully could be the subject of a future visit. Therefore, although we have lost the illusory paradise of standard economics (and of classical science), we have not fallen into the hell of total ignorance: we lie in an interesting purgatory of limited, local, fragmented, disputable, and temporary pieces of knowledge. Better than nothing, and especially better than cultivating pure illusions, often supported not by scientific arguments but rather by ideological or convenient interests. I guess, we would prefer to be treated by a doctor who has this type of knowledge, rather than by one who claims to have a perfect knowledge but refers to an abstract body, a body maybe existing on another planet.


Which methods do you use to deal with this relational phenomenon?
If relational economics implies structure, and structures are properly called networks, network analysis is a set of means to research relational economics.
I hope to be able to foster the creation of groups of young researchers in Italy and Germany and elsewhere. We have also agreed to do a student exchange which would then mean ‘lived’ institutional relationships. My courses are all in English so it is easy for students even if they don’t speak Italian.

How was this joint endeavour for Relational Economics research triggered in the first place?
The story started with two parallel and then converging paths. In 2016 I edited a book entitled “Relational Methodologies and Epistemology in Economics and Management Siences”, and Josef Wieland also was developing his own relational perspective to economics and management, published in the first German edition of his 2018 book “Relational Economics”. Then, here at Zeppelin University he launched the first Relational Economics conference and invited me to meet him and all the other scientists in the group.


Thank you for the interview!


This interview with Professor Lucio Biggiero was conducted by Evelyn Pachta, Manager External Relations and Communication at LEIZ, during the Professor’s visit to Zeppelin University.


LEIZ Communication Management
contact: evelyn.pachta@zu.de