History of Economics

The present essay aims to account for F.A. Hayek's oft-noted 'turn' away from technical economics to concerns of a more philosophical nature. In particular, the paper seeks an explanatory principle that reconciles various elements of both continuity and discontinuity in Hayek's intellectual development, especially with respect to the evolution of his arguments concerning economic fluctuations. The essay uncovers such an explanatory principle in Hayek's own methodology of sciences of complex phenomena. According to this principle, an inquirer who confronts phenomena too (...) complex for adequate explanation on the basis of current knowledge must move to a more general, albeit less testable, explanation. This is precisely what occurred in the evolution of Hayek's thought concerning trade cycles. The concluding section considers the implications of the argument for the extensive secondary literature on Hayek's 'transformation'. (shrink)

How old is the distinction between the genetic and the gestational parent? Anca Gheaus “suggests” it is quite new, but I believe people have made a distinction along these lines for centuries in their imaginations. I present a problem related to the distinction and to the Scottish enlightenment.

Amartya Sen has recently told us how he feels he has not yet made his mark as an economist. I notice that he is strangely not named in the background information to an essay competition. It concerns why some nations are wealthy and others poor, names other economists, and even discusses freedom and capabilities. Here I address the question of why Sen is absent and, more generally, at risk of devaluation.

F.A. Hayek essentially quit economic theory and gave up the phenomena of industrial fluctuations as an explicit object of theoretical investigation following the publication of his last work in technical economics, 1941’s The Pure Theory of Capital. Nonetheless, several of Hayek’s more methodologically-oriented writings bear important implications for economic phenomena, especially those of industrial fluctuations. Decisions (usually, for Hayek, of a political nature) taken on the basis of a “pretence” of knowledge impede the operation of the price system’s belief-coordinating function (...) and thereby contribute to episodes of economic disequilibrium. Moreover, this later account – which I call Hayek’s epistemic theory of industrial fluctuations – implies certain aspects of his earlier theory. The two accounts are connected in virtue of the role that ignorance and the limits of human knowledge play in each. Indeed, it turns out that – substantively, if not methodologically – Hayek’s early theory of the cycle is a special case of the more general epistemic account. (shrink)

A book review of Frank Ramsey: A Sheer Excess of Powers, by Cheryl Misak (OUP, 2020).

"David Ricardo has been acclaimed - or vilified - for merits he would never have dreamt of, or sins for which he was entirely innocent. Entrenched mythology labels him as a utilitarian economist, an enemy of the working class, an impractical theorist, a scientist with 'no philosophy at all' and the author of a formalist methodological revolution. Exploring a middle ground between theory and biography, this book explores the formative intellectual encounters of a man who came to economic studies via (...) other experiences, thus bridging the gap between the historical Ricardo and the economist's Ricardo. The chapters undertake a thorough analysis of Ricardo's writings in their context, asking who was speaking, what audience was being addressed, with what communicative intentions, using what kind of lexicon and communicative conventions, and starting with what shared knowledge. The work opens in presenting the different religious communities with which Ricardo was in touch. It goes on to describe his education in the leading science of the time - geology - before he turned to the study of political economy. Another chapter discusses five 'philosophers' - students of logic, ethics and politics - with whom he was in touch. From correspondence, manuscripts and publications, the closing chapters reconstruct, firstly, Ricardo's ideas on scientific method, the limits of the 'abstract science' and its application, secondly, his ideas on ethics and politics and their impact on strategies for improving the condition of the working class. This book sheds new light on Ricardian economics, providing an invaluable service to readers of economic methodology, philosophy of economics, the history of economic thought, political thought and philosophy. Sergio Cremaschi is a former Reader of Moral Philosophy at the 'Amedeo Avogadro' University at Vercelli"--. (shrink)

At the centenary of Frank H. Knight’s Risk, Uncertainty, and Profit (1921), we explore the continuing relevance of Knightian uncertainty to the theory and practice of entrepreneurship. There are three challenges facing such assessment. First, RUP is complex and difficult to interpret. The key but neglected element of RUP is that Knight’s account is not solely about risk and uncertainty as states of nature, but about how an agent’s beliefs about uncertain outcomes and confidence in those beliefs guide their choices. (...) Second, RUP is Knight’s only effort in this area. His subsequent career led elsewhere, so he did not engage with subsequent interpretations of this work. Third, much of the current literature emphasizes that decisions must be different under the two states of nature with a consequent misunderstanding of entrepreneurial agency. This paper addresses each challenge in sequence. First, we explicate Knight’s (1921) approach and explain why that approach is murky. Second, as a complement to Knight’s interpretation, we examine Frank P. Ramsey’s approach to subjective probabilities to help clarify Knight’s murky approach. What links Knight and Ramsey is a shared pragmatism about entrepreneurial agency under uncertainty that depends upon the beliefs about, and confidence in, their judgments of possible outcomes. This Knight-Ramsey approach does not require actor’s behaviors to be determined by the class of uncertain environment (whether risk, uncertainty, or ambiguity) they face. We focus on the response by the entrepreneur to the existence of uncertainty in all its forms. We argue that this reductive account provides a foundation to examine common problems in management, including managerial hubris, the interaction between entrepreneurs and venture capitalists, and the need for experimentation (such as prototyping and market research) in advance of new product and venture launches. Third, we critique current literature that favors epistemic purism about the ontology of risk and uncertainty and ignores Knight-Ramsey pragmatism in meeting uncertainty, such as using formal and informal institutions for uncertainty mitigation. Our account locates Frank Knight’s subtleties in entrepreneurial behavior firmly in the literature on entrepreneurial agency a century later. (shrink)

The history of economic thought witnessed several prominent economists who took seriously models and concepts in physics for the elucidation and prediction of economic phenomena. Econophysics is an emerging discipline at the intersection of heterodox economics and the physics of complex systems, with practitioners typically engaged in two overlapping but distinct methodological programs. The first is to export mathematical methods used in physics for the purposes of studying economic phenomena. The second is to export mechanisms in physics into economics. A (...) conclusion is drawn that physics transfer is often justified at the level of mathematical transfer but unjustified at the level of mechanistic transfer. (shrink)

Marxism has found its home in the academic world in various disciplines: economics, philosophy, sociology, and political science. An under-appreciated area is Marxist accounting. At first, this seems like a rather strange field in which to develop the theories of Marxism, but Rob Bryer, in his book Accounting for Value in Marx’s Capital: The Invisible Hand, has brought attention to Marxist accounting and its necessity for understanding Marxist theory. This is relevant not only to those who study accounting but to (...) all who have an interest in Marxism’s basis for value and, even more importantly, the labour theory of value as a whole. (shrink)

There is a striking contrast between the significance of Harold Hotelling’s contribution to industrial economics and the fact that his location model was invalid, unrealistic and non-robust. It is difficult to make sense of the explanatory value of Hotelling’s model based on philosophical accounts that emphasize logical validity, representational adequacy, and robustness as determinants of explanatory value. However, these accounts are misleading because they overlook the context within which the explanatory value added of a model is apprehensible. We present Hotelling’s (...) model in its historical context and show why it is an important and explanatory model despite its apparent deficiencies. (shrink)

There are three slogans in the history of Socialism that are very close in wording, viz. the famous Cabet-Blanc-Marx slogan: "From each according to his ability; To each according to his needs"; the earlier Saint-Simon-Pecqueur slogan: "To each according to his ability; To each according to his works"; and the later slogan in Stalin’s Soviet Constitution: "From each according to his ability; To each according to his work." We will consider the following questions regarding these slogans: a) What are the (...) earliest occurrences of each of these slogans? b) Where does the inspiration for each half of each slogan come from? c) What do the Saint-Simonians mean by “To each according to his ability”? d) What do they mean by “To each according to his works”? e) What motivates the shift from “To each according to his ability” to “From each according to his ability”? f) How should we envisage the progression toward “To each according to his needs”? g) What is the distinction between from “To each according to his works” and “To each according to his work”? (shrink)

This article is the introductory chapter to a festschrift in honour of Geoff Hodgson. In work spanning four decades, Geoff Hodgson has made many path-breaking contributions to institutional economics, evolutionary economics, economic methodology, the history of economic thought and social theory more broadly. Hodgson’s reputation as a prolific and important writer, whose work transcends traditional disciplinary boundaries, is matched by his credentials as an academic entrepreneur, whose involvement in the formation of two international scholarly societies and the foundation of the (...) Journal of Institutional Economics has expanded the opportunities for constructive dialogue among social scientists. To celebrate Hodgon’s fantastic career, this volume brings together 19 original contributions by world-leading scholars in specific areas that have played a significant role in influencing Hodgson’s thinking or represent key debates to which he has contributed. The chapter introduces these contributions, and summarizes a conversation with Hodgson that is also included in the volume. (shrink)

The modern concept of ideology was established by the liberal politician and philosopher Destutt de Tracy, with the objective of creating an all-embracing and general science of ideas, which followed the sensualist and empiricist trend initiated by Locke that culminated in the positivism of Comte. Natural selection and immunity are two key concepts in the history of biology that were strongly based on the Malthusian concept of struggle for existence. This concept wrongly assumed that population grew faster than the means (...) of existence. This “natural” law contained implicitly the idea that the poor and least gifted would not survive. This idea led to the progressive development of the concept of natural selection, whose definitive version was given by Darwin. Mechnikov took the concepts of struggle for existence and natural selection and conceived infectious diseases as a struggle between a host and its invader, the so-called phagocytosis theory. This theory created the necessity to possess mechanisms to discriminate between the own and the foreign, and led to the conception of the immune self. These concepts were not developed from ideas coming from perceptions or sensations, but from ideas coming from their values: individual interest, inevitable inequality, property, utility and profit. Values are ideals that constitute an ideological matrix which exerts a numinous activity and influence the development of our future actions. In consequence, science and its practice cannot avoid and ignore the values that drive them and impulse them towards certain directions. (shrink)

The article focuses on the anti-naturalism of Menger and Mises. It presents a methodological approach formulated by both scholars as stemming from epistemological anti-naturalism and demonstrating similarities to social phenomenology. The article also discusses the development of the anti-naturalistic perspective on the basis of Hayek’s conception of sensory order. The latter allowed addressing the problem of validity of methodological dualism and established a sound foundation for the methodological approach of the Austrian School of Economics.

Friedrich Hayek’s defense of neoliberal free market capitalism hinges on the distinction between economies and catallaxies. The former are orders instituted via planning, whereas the latter are spontaneous competitive orders resulting from human action without human design. I argue that this distinction is based on an incomplete semantic history of “economy.” By looking at the meaning of “oikonomia” in medieval providential theology as explained by Giorgio Agamben and Joseph Vogl, I argue how Hayek’s science of catallactics is itself a secularization (...) of providential theology. This exposes Hayek to three criticisms: he unjustifiably neglects the possibility of tendencies toward spontaneous disorder in free markets, he condemns the “losers” of neoliberal competition to being providential waste on the road to general prosperity, and he imposes on people the duty to consent to a neoliberal order that hinders them from cultivating their inoperativity. (shrink)

In the course of the eighteenth and nineteenth centuries the paradigm of a new science, political economy, was established. It was a science distinct from the Aristotelian sub-disciplines of practical philosophy named oikonomía and politiké, and emphasis on its character of science not unlike the natural sciences – still called ‘natural philosophy’ – mirrored precisely a willingness to stress its autonomy from two other sub-disciplines of practical philosophy, that is, ethics and politics. However, the new science resulted from a transformation (...) of part of traditional practical philosophy, allowing the inclusion of bodies of knowledge accumulated by experts of commerce and public finance. Such bodies of knowledge were unified by the (true or alleged) discovery of regularities, mechanisms, causal connections making for a new partial order within the overall social order. How far this paved the way to a science similar to mathematics rather left a normative discipline as alive as ever was a recurrent question for at least a century, until the marginalist revolution opened the way for a sharp division, leaving ‘economics’ as a science of causes and effects facing ‘economic policy’ as a discourse on ends. (shrink)

We reexamine some of the classic problems connected with the use of cardinal utility functions in decision theory, and discuss Patrick Suppes's contributions to this field in light of a reinterpretation we propose for these problems. We analytically decompose the doctrine of ordinalism, which only accepts ordinal utility functions, and distinguish between several doctrines of cardinalism, depending on what components of ordinalism they specifically reject. We identify Suppes's doctrine with the major deviation from ordinalism that conceives of utility functions as (...) representing preference differences, while being non- etheless empirically related to choices. We highlight the originality, promises and limits of this choice-based cardinalism. (shrink)

Le but de ce recueil est d’offrir des commentaires accessibles et introductifs aux textes classiques qu’ils accompagnent, en ouvrant des perspectives de discussion sur le thème du capitalisme. C’est en ce sens qu’Emmanuel Chaput lance le débat en commentant le texte de Pierre-Joseph Proudhon, « Qu’est-ce que la propriété ? ». Les textes de Karl Marx ne sont bien sûr pas laissés pour compte : Samuel-Élie Lesage s’engage fermement dans cette voie en discutant L’idéologie allemande de Karl Marx, Christiane Bailey (...) nous offre d’approcher différemment l’œuvre marxienne en abordant son traitement de la question animale dans des extraits du Manifeste du parti communiste et du Travail salarié et capital, et Mathieu Joffre-Lainé nous présente une analyse fine des questions proprement économiques du Capital. Abordant les alternatives au capitalisme dans la pensée de Léon Bourgeois, Éliot Litalien commente La Solidarité et Simon-Pierre Chevarie-Cossette s’attaque à l’analyse de l’Essai d’une philosophie de la solidarité. Enfin, en liant capitalisme, patriarcat et pouvoir politique, Tara Chanady propose une lecture du texte Du mariage et de l’amour de Emma Goldman. La conclusion de Marie-Eve Jalbert se situe dans une perspective contemporaine et critique en décortiquant la critique du socialisme avancée par Friedrich A. Hayek. (shrink)

The paper aims to address the following two questions: what kind of discourse is that which attempt to found or defend the autonomy or the boundaries of a discipline? Why do such discourses tend to turn into normative, dogmatic-excommunicating discourses between disciplines, schools or scholars? I will argue that an adequate answer may be found if we conceive disciplines as dogmatics, where such discourses often take the form of a discourse on the foundation of a discipline, a foundation in the (...) name of which the scholar speaks and with which he/she entertains an identity relationship. To this purpose I will re-examine the methodological discourses of (and debates between) Pareto, Croce and Einaudi on the demarcation issue between philosophy, economics and value-judgments as highly instructive to understand such issues. (shrink)

Although Minsky’s interpretation of Keynes’s macroeconomics and essential message clashes with authoritative alternative interpretations, it has become increasingly influential during the years following the Global Financial Crisis, even in mainstream circles. This paper offers a critical evaluation of Minsky’s Financial Instability Hypothesis from the perspective of the alternative Austro-Wicksellian paradigm. Although some of the similarities and/or analogies between Minsky’s approach and that of the Austrian School suggest a more than merely superficial affinity between the two theoretical frameworks and although some (...) scope for cross-fertilization between both approaches can be found, both theoretically and empirically, at a fundamental conceptual level both theories remain incompatible and difficult if not impossible to reconcile, in particular in terms of fundamental causality and in terms of policy conclusions and prescriptions. Despite the fact that Minsky’s policy conclusions are multifaceted and somewhat eclectic, they manifest a lack of familiarity with the conclusions of the Austrian analysis of the problems of central planning by Big Players such as Big Bank and Big Government. Both approaches also offer contrasting interpretations of the historical experience of the Global Financial Crisis. (shrink)

A discussion of the correspondence between Malthus and Ricardo and its bearing on their published works.

The present essay addresses the epistemic difficulties involved in achieving consensus with respect to the Hayek–Keynes debate. It is argued that the empirical implications of the relevant theories are such that, regardless of what is observed, both theories can be interpreted as true, or at least, as not falsified. The essay explicates the respects in which the empirical evidence underdetermines the choice between the relevant theories. In particular, it is argued both that there are convenient responses that protect each theory (...) from what appears to be threatening evidence and that, for particular kinds of evidence, the two theories are empirically equivalent. Larry Laudan's suggestion that ampliative methodological criteria can resolve an underdetermined choice between multiple scientific theories is considered and rejected as a possible means to rational consensus. (shrink)

The paper aims to establish that Terence Hutchison’s argument in The Politics and Philosophy of Economics (1981) to the effect that the young F.A. Hayek maintained a methodological position markedly similar to that of Ludwig von Mises fails to establish the relevant conclusion. The first problem with Hutchison’s argument is that it is not clear exactly what conclusion he meant to establish with regard to the methodological views of the two paragons of 20th century Austrian economics. Mises (in)famously maintained a (...) rather extreme methodological apriorism. However, Hutchison’s argument does not support the claim that Hayek was ever an apriorist of the Misesian variety. The concept of a priori knowledge that emerges from Hayek’s epistemology – specifically the epistemology implied by Hayek’s work in theoretical psychology – is the direct opposite of Mises’ treatment of a priori knowledge. Simply stated, Hayek conceived of a priori knowledge as fallible and relative, while Mises considered a priori knowledge to be infallible and absolute. Thus, it cannot be maintained – if, indeed, Hutchison meant to establish – that Hayek was a Misesian apriorist during the years in question. What’s more, the paper shows that Hutchison’s argument does not support a weaker interpretation of the relevant conclusion. There are alternative interpretations of the evidence adduced by Hutchison that are both more charitable and more in line with Hayek’s epistemology that undermine Hutchison’s conclusion. (shrink)

GILBERT JEAN FACCARELLO (Paris, 1950) is professor of economics at Université Panthéon-Assas, Paris, and a member of the Triangle research centre (École Normale Supérieure de Lyon and CNRS). He is presently chair of the ESHET Council (European Society for the History of Economic Thought). He completed his doctoral research in economics at Université de Paris X Nanterre. He has previously taught at the Université de Paris-Dauphine, Université du Maine and École Normale Supérieure de Fontenay/Saint-Cloud (now École Normale Supérieure de Lyon). (...) He is a co-founder of The European Journal of the History of Economic Thought, which he co-edited for 20 years with J. L. Cardoso, Heinz D. Kurz, and A. Murphy. With Alain Béraud, he edited the Nouvelle histoire de la pensée économique (La Découverte, 3 volumes, 1992-2000) and, together with Heinz D. Kurz, he is presently editing a Handbook of the History of Economic Analysis (3 volumes, forthcoming with Edward Elgar). -/- EJPE interviewed Gilbert Faccarello about his research career in the history of economic thought, where he has focused especially on old and new classical and Marxian political economy, and French political economy during the 18th and 19th centuries. G. Faccarello discusses his interest not only in the logical structure and context of the economic ideas of past thinkers but also the links between economic thought, philosophy, and religion. (shrink)

In 1930, John Maynard Keynes published a masterpiece that should be a compulsory reading for any educated person, a short essay entitled Economic Possibilities for our Grandchildren (Keynes 1930, 1972).All references are from the 1931 online version of Keynes (1930) provided by Project Gutenberg, so pages are left unspecified. I am sure Keynes would have found such free access to information coherent with the philosophy of the essay. It was an attempt to see what life would be like if peace, (...) prosperity and techno-scientific developments were increasingly part of humanity’s future. Of course, things went otherwise. The Great Depression begun in the same year, and World War II soon followed. In the subsequent decades, other disasters, conflicts and crises awaited humanity. The essay became a philosophical exercise that could collect dust in the libraries. Yet the fact that history took such terrible and tragic steps back does not in any way detract from Keynes’ brilliant insights. And to. (shrink)

Adam Smith is respected as the father of contemporary economics for his work on systemizing classical economics as an independent field of study in The Wealth of Nations. But he was also a significant moral philosopher of the Scottish Enlightenment, with its characteristic concern for integrating sentiments and rationality. This article considers Adam Smith as a key moral philosopher of commercial society whose critical reflection upon the particular ethical challenges posed by the new pressures and possibilities of commercial society remains (...) relevant today. The discussion has three parts. First I address the artificial separation between self-interest and morality often attributed to Smith, in which his work on economics is stripped of its ethical context. Second I outline Smith’s ethical approach to economics, focusing on his vigorous but qualified defence of commercial society for its contributions to prosperity, justice, and freedom. Third I outline Smith’s moral philosophy proper as combining a naturalistic account of moral psychology with a virtue ethics based on propriety in commercial society. (shrink)

100 years after creating the Federal Reserve System (FED), whose legality and modus operandi remains questionable, there is time to rethink the national and also international payment system as a whole. The key element of existing economic relationships is the money that makes barter-free exchange possible. But monetary economics is only one aspect of more common political framework designed and established for retention of power. Such egoistic political interest proves its own relevancy and exerts ideological pressure on economic thought that (...) consequently forms economic and political institutions. In an effort to breake a rule, and to end the circuit of capitalistic self-fullfilling prophecy, a different economic model based on joint ownership (userization) is taken into consideration. This manuscript gives explanatory statements on userization and substantiates its advantageous social and environmental appropriateness. (shrink)

On a few occasions F.A. Hayek made reference to the famous Gödel theorems in mathematical logic in the context of expounding his cognitive and social theory. The exact meaning of the supposed relationship between Gödel's theorems and the essential proposition of Hayek's theory of mind remains subject to interpretation, however. The author of this article argues that the relationship between Hayek's thesis that the human brain can never fully explain itself and the essential insight provided by Gödel's theorems in mathematical (...) logic has the character of an analogy, or a metaphor. Furthermore the anti-mechanistic interpretation of Hayek's theory of mind is revealed as highly questionable. Implications for the Socialist Calculation Debate are highlighted. It is in particular concluded that Hayek's arguments for methodological dualism, when compared with those of Ludwig von Mises, actually amount to a strengthening of the case for methodological dualism. (shrink)

Abstract: Don Ross’ Economic Theory and Cognitive Science (2005) provides an elaborate philosophical defense of neoclassical economics. He argues that the central features of neoclassical theory are associated with what he calls the Robbins-Samuelson argument pattern and that it can be reconciled with recent developments in experimental and behavioral economics, as well as contemporary cognitive science. This paper argues that Ross’ Robbins-Samuelson argument pattern is not in the work of either Robbins or Samuelson and in many ways is in conflict (...) with their own versions, and defenses, of neoclassical theory. (shrink)

In this article we explore an argumentative pattern that provides a normative justification for expected utility functions grounded on empirical evidence, showing how it worked in three different episodes of their development. The argument claims that we should prudentially maximize our expected utility since this is the criterion effectively applied by those who are considered wisest in making risky choices (be it gamblers or businessmen). Yet, to justify the adoption of this rule, it should be proven that this is empirically (...) true: i.e. that a given function allows us to predict the choices of that particular class of agents. We show how expected utility functions were introduced and contested in accordance with this pattern in the 18th century and how it recurred in the 1950s when Allais made his case against the neo-Bernoullians. (shrink)

Abstract: The paper argues that mainstream economics and mainstream philosophy of natural science had much in common during the period 1945-1965. It examines seven common features of the two fields and suggests a number of historical developments that might help explain these similarities. The historical developments include: the Vienna Circle connection, the Samuelson-Harvard-Foundations connection, and the Cold War operations research connection.

A reconstruction on the evolution in the understanding of wealth in the political literature from the Renaissace to the eighteenth century.

A short presentation of Schumpeter's work with spedial attention to its philophical backgroound.

A reconstruction of the genesis and transformations of the idea of 'economic man'.

A discussion of the curious history of a notion derived from Adam SMith's polemic against his predecessors in mattters of commercial policies.

In this paper I explore a positivist methodological tradition in early demand theory, as exemplified by several common traits that I draw from the works of V. Pareto, H. L. Moore and H. Schultz. Assuming a current approach to explanation in the social sciences, I will discuss the building of their various explanans, showing that the three authors agreed on two distinctive methodological features: the exclusion of any causal commitment to psychology when explaining individual choice and the mandate to test (...) the truth of demand theory on aggregate data by statistical means. However, I also contend, from an epistemological point of view, that the truth of demand theory was conceived of in three different ways by our authors. Inspired by Poincaré, Pareto assumed that many different theories could account for the same data on individual choice, coming close to a kind of conventionalism ? though I prefer to refer to this position as theoreticism. Moore was himself akin to Pearson's approach, which could be named descriptivist in so far as it resolved scientific laws into statistical descriptions of the data. Finally, Schultz tried to reconcile both approaches in an adequationist stance with no success, as we shall see. (shrink)

In this paper I argue that differences between the ‘new moral science’ of the seventeenth century and scholastic natural law theory originated primarily from the skeptical challenge the former had to face. Pufendorf’s project of a scientia practica universalis is the paramount expression of an anti-skeptical moral science, a ‘science’ that is both explanatory and normative, but also anti-dogmatic insofar as it tries to base its laws on those basic phenomena of human life which, supposedly, are immune to skeptical doubt. (...) The main scholastic legacy to the new moral science is the dichotomy between an ‘intellectualist’ and a ‘voluntarist’ view of natural law (or between lex immanens and lex imposita). Voluntarism lies at the basis of both theological views, such as Calvinism, and political views, such as those of Hobbes and Locke. The need to counterbalance the undesirable implications of extreme voluntarism may account for much of the developments in ethics and politics during the seventeenth and eighteenth centuries.Scottish natural jurisprudence, which tried to find a middle way between skepticism and extreme voluntarism, is less secular and more empirical than received wisdom admits. There emerged, as one of its ‘accidental’ outcomes, a systematic, self-contained and empirical economic theory from the search for an empirically based normative theory of social life. The basic assumption of such a theory, namely, the notion of societal laws as embedded in trans-individual mechanisms, derives from the voluntarist view of natural law as ‘imposed’ law.Later discussions of social issues in terms of ‘economic’ and ‘ethical’ reasons originated partly from a misreading ofthe Scottish natural jurisprudential framework of economic theory. Starting with this reconstruction, I try to shed some light on recent discussions about the role of ethics in economics. (shrink)

In a world of partially overlapping and partially conflicting interests there is good reason to doubt that self-seeking behaviour at the micro-level will spontaneously lead to desirable social outcomes at the macro-level. Nevertheless, some sophisticated economic writers advocating a laissez-faire policy prescription have proposed various 'invisible hand' mechanisms which can supposedly be relied upon to 'educe good from ill'. Smith defended the 'simple system of natural liberty' as giving the greatest scope to the unfolding of God's will and the working (...) out of 'natural' providential processes free of interference by 'artificial' state intervention - the expression not of divine order but of fallible human reason. Hayek, adopting a similar policy stance, based it in an evolutionary process in which those institutional forms best adapted to reconciling individual interests would, he believed, spontaneously be selected for in the inter-group struggle for survival. Keynes shares the holistic approach of Smith and Hayek, but without their reliance on invisible hand mechanisms. If spontaneous processes cannot be relied upon to generate desirable social outcomes then we have to take responsibility for achieving this ourselves by establishing the appropriate institutional framework. Keynes takes a historical view of the role of capitalism and analyses its pathology as rooted in what we would now refer to as a multi-player prisoners' dilemma. The paper draws out the significance of his methodological standpoint here. Keynes's policy standpoint assigns a critical role to his own class, the 'educated bourgeoisie' in the reform process he maps out. A distinction, but also an intimate connection, is highlighted between, on the one hand, micro-level individualism (the 'Manchester System, and, on the other, the macro-level collective action ('planning') required to preserve it. Finally Keynes is considered in relation to the themes of laissez-faire, holism, reductionism, providentialism and the invisible hand. (shrink)

When modern economists use the notions of sympathy or empathy, they often claim that their ideas have their roots in Adam Smith's Theory of Moral Sentiments, while sometimes complaining that Smith fails to distinguish clearly enough between the two concepts. Recently, Philippe Fontaine has described various forms of sympathy and empathy, and has explored their respective roles in Smith's work. My objective in this paper is to argue that Smith's analysis of how people's sentiments impinge on one another involves a (...) concept of fellow-feeling that is distinct from both sympathy and empathy. Unlike sympathy and empathy, fellow-feeling does not fit into the ontological framework of rational choice theory – which may explain why it tends to be overlooked by modern readers of Smith. (shrink)

Uncertainty plays an important role in The General Theory, particularly in the theory of interest rates. Keynes did not provide a theory of uncertainty, but he did make some enlightening remarks about the direction he thought such a theory should take. I argue that some modern innovations in the theory of probability allow us to build a theory which captures these Keynesian insights. If this is the right theory, however, uncertainty cannot carry its weight in Keynes’s arguments. This does not (...) mean that the conclusions of these arguments are necessarily mistaken; in their best formulation they may succeed with merely an appeal to risk. (shrink)

Galiani discusses a subject much debated in the eighteenth century, namely, the nature of the currency. He also includes considerations of economic theory and political philosophy around the main motif. He supports the following theses of monetary theory: currency has the function of a sort of register of credits that every individual can have towards the warehouses of goods of which the society is supplied, and precisely in the measure of the contribution he has given to their supply; the metallic (...) currency has the merit, with respect to a hypothetical system of artificial accounting, to be safe from frauds and not to require a bureaucratic apparatus; the value of currency depends on the value of metals, not on legislative interventions. (shrink)

A discussion of the economic work of Genovesi, the first professor of political economy in Europe. Genovesi supports a physiocratic theory of value as the net produce of agricultural work; a theory of interest as the motive of human action, intermediate between the extreme poles of excessive self-love and benevolence; a doctrine of innate rights as a limit to the sovereign's action; a commercial policy that limits dependence on foreign countries. He also took a position in the eighteenth-century debate on (...) "luxury", taking a firm stance in favour of moderate luxury, considered not vice but virtue as the right means between excessive parsimony and prodigality. He also discusses the function of the classes not dedicated to "mechanical arts" and not producing "rents" but nevertheless useful to society (Adam Smith's "unproductive" workers) in which he includes the proprietary classes which he defends against Rousseau's radical criticism, limiting himself to advocating the abolition of inalienable properties. Finally, he advocates population growth as a way to increase public happiness, the development of agriculture, the freedom of grain trade and the interest rate. (shrink)

I suggest that the image of Adam Smith suffers from an emphasis on the role of “utilitarian calculus”, besides on overlooking the role of a “Stoic” point of view from which vanity, selfishness, and even enlightened self-interest are ultimately valueless, and finally a restricted view of prudence.

I argue that the word mercantilism, born in the beginning from a nasty rhetorical move by Adam Smith, still preserves so much evocative power as to be used emblematically as a name for a whole historical period because of its natural use as a label for aggressive and unfair economic policies but, for analytic purposes we should bring to an end cross-purpose talk between historians of ideas and historians of society.

My objections are: first, we may ask whether the achievement of The Wealth of Nations has been that of creating a new and more encompassing conceptual framework where already existing theoretical elements could be integrated and whether the growth of knowledge could have originated from a growth in the consistency of a theoretical framework which synthesized already existing individual elements; secondly, we may ask whether Smith's "tendentious" presentation of the positions of both predecessors and opponents might be some kind of (...) unavoidable sin and he might have been guilty of that sin because this was a price to be paid to his rhetorical strategy; thirdly, whether the fact that a text has been canonized at a certain moment in history for quite contingent reasons is no decisive proof of the intrinsic worth or lack of worth of the text in itself. (shrink)

Although the controversy between Malthus and Ricardo has long been considered to be an important source for the history of economic thought, it has hardly been the object of a careful study qua controversy, i.e. as a polemical dialogical exchange. We have undertaken to fill this gap, within the framework of a more ambitious project that places controversies at the center of an account of the history of ideas, in science and elsewhere. It is our contention that the dialogical co-text (...) is essential for reconstructing the meaning and the evolution of science. In the present paper we try to substantiate this contention by means of a pragma-rhetorical study of this particular controversy. First, we reconstruct, through an analysis of a chunk of the correspondence, a micro-level of specific moves and countermoves which constitute a sequential structure within which also meta-scientific and meta-controversial considerations play a role. We then move to a macro-level of analysis, looking for recurrent patterns of argumentation. Finally, we draw epistemological conclusions on the nature of rationality and progress as manifested in actual scientific controversies. (shrink)