Philosophy of Economics

Many proponents of the Harm Principle seem to implicitly assume that the principle is compatible with permitting the free exchange of goods and services, even if such exchanges generate so-called market harms. I argue that, as a result, proponents of the Harm Principle face a dilemma: either the Harm Principle’s domain cannot include a large number of non-market harm cases or market harms must be treated on par with non-market harms. I then go on to discuss three alternative arguments defending (...) the status of market harms as exceptions to the Harm Principle and discuss why these arguments also fail. (shrink)

This is a suggestion for a predictable economy.

Amartya Sen’s remarkable endeavour to realize the normative capability of welfare economics goes beyond the impecunious resultants of the neoclassical welfare economy. The neoclassical welfare economy decoratively bracketed values to speculate about factual observations. This was due to the influence of logical positivists and their convictions about experimental scientific statements (primarily mathematical) and their vicinity to empirical truths and analytic statements. Sen adequately inquires “whether morality can be expressed in the form of choice between preference patterns rather than between actions” (...) (Sen, 1997a, 78). “A new phase classical theory” in economics from the hands of Sen and some others put forth two pivotal issues in a unified manner: a. Mathematical models of an economy. b. Ethical reflection on the subject of welfare economy–a value-laden enterprise in Sen’s literature. -/- In general, welfarists and utilitarians affirm that moral values are anchored in individual agency and involve mental metric utilities (pleasure, happiness, pain etc.). This focus, first of all, results in a disadvantage, as it undermines freedom in terms of achievement. Secondly, it pays no heed to achievement reasonably giving more importance to those who are incapable of reflecting on any one of those mental metrics. Besides, Sen argues that equality of opportunity does not accord with the equality of freedom, and its reason is rooted in the scope of the incongruity of human beings and the diversified meanings of efficiency. Developing a general methodological approach to revisit the notion of inequality concerned by exploring a particular substantive stand that Sen aims to underscore involves examining how social arrangements work to define freedom, capabilities, and welfare to ensure comparisons and assessments of quality of life. (shrink)

I examine the once popular claim according to which interpersonal comparisons of welfare are necessary for social choice. I side with current social choice theorists in emphasizing that, on a narrow construal, this necessity claim is refuted beyond appeal. However, I depart from the opinion presently prevailing in social choice theory in highlighting that on a broader construal, this claim proves not only compatible with, but even comforted by, the current state of the field. I submit that all in all, (...) the most accurate philosophical assessment consists not in flatly rejecting this necessity claim, but in accepting it in suitably revised form. (shrink)

Consider a subjective expected utility preference relation. It is usually held that the representations which this relation admits differ only in one respect, namely, the possible scales for the measurement of utility. In this paper, I discuss the fact that there are, metaphorically speaking, two additional dimensions along which infinitely many more admissible representations can be found. The first additional dimension is that of state-dependence. The second—and, in this context, much lesser-known—additional dimension is that of act-dependence. The simplest implication of (...) their usually neglected existence is that the standard axiomatizations of subjective expected utility fail to provide the measurement of subjective probability with satisfactory behavioral foundations. (shrink)

In this paper, I present some responses to an argument made by an economist in an online video: that when Britain leaves the European Union, it will be taking many high ranking universities with it, which will lead to an innovation deficit in the union. I present some responses by means of a pastiche of a widely read European fiction writer.

Cette note épistémologique porte sur le statut, en théorie de la décision, des concepts d’attitude par rapport au risque. A première vue, l’analyse axiomatique ne les exploite pas, ce qui reflète une certaine neutralité des modèles de décision au sujet de l’attitude par rapport au risque. Mais un examen plus poussé met en valeur la variation conditionnelle et le renforcement de l’attitude par rapport au risque, qui rattachent les concepts d’attitude par rapport au risque à l’analyse axiomatique.

In recent years, there has been an increasing interest in the development of well-founded conceptual models for Service Management, Accounting Information Systems and Financial Reporting. Economic ex- changes are a central notion in these areas and they occupy a prominent position in frameworks such as the Resource-Event Action (REA) ISO Standard, service core ontologies (e.g., UFO-S) as well as financial stan- dards (e.g. OMG’s Financial Industry Business Ontology - FIBO). We present a core ontology for economic exchanges inspired by a (...) recent view on this phenomenon. According to this view, economic exchanges are based on an agreement on the actions that the agents are committed to perform. This view enables a unified treatment of economic exchanges, regardless the object of the transaction. We ground our core ontology on the Unified Foundational Ontology (UFO), discussing its formal and conceptual aspects, instantiating it as a reusable OntoUML model, and confronting it with the REA standard and the UFO-S service ontology. (shrink)

Why should be ‘better than’ be transitive? The leading answer in ethics is that values do not change with context. But this cannot be the entire source of transitivity, I argue, since transitivity can fail even if values never change, so long as they are complex, with multiple dimensions combined non-additively. I conclude by exploring a new hypothesis: that all alleged cases of nontransitive betterness, such as Parfit’s Repugnant Conclusion, can and should be modeled as the result of complexity, not (...) context-relativity. (shrink)

In recent years, much public attention has been devoted to the existence of pay discrepancies between men and women at the upper end of the income scale. For example, there has been considerable discussion of the ‘Hollywood gender pay gap’. We can refer to such discrepancies as cases of millionaire inequality. These cases generate conflicting intuitions. On the one hand, the unequal remuneration involved looks like a troubling case of gender injustice. On the other, it’s natural to feel uneasy when (...) confronted with the suggestion that multi-millionaires are somehow being paid inadequately. In this paper, we consider two arguments for rectifying millionaire inequality, clarifying their appeal but also identifying the obstacles that each will have to surmount in order to succeed. (shrink)

Questa pubblicazione intende fornire uno sguardo sulla situazione dell’Europa, intesa come continente fatto di diverse entità politiche, etniche e culturali, in relazione alla geopolitica mondiale che sta cambiando la propria impostazione, diventando sempre più multipolare. L’approccio offerto dalla geosofia, affiancata alla noologia, permette di comprendere con quale fondamento etnosociologico ed identitario i diversi popoli possano prendere parte alla nuova configurazione del mondo multipolare, superando l’ideologia globalista e riconquistando il valore delle proprie identità.

This paper presents a dilemma for the additive model of reasons. Either the model accommodates disjunctive cases in which one ought to perform some act \phi just in case at least one of two factors obtains, or it accommodates conjunctive cases in which one ought to \phi just in case both of two factors obtains. The dilemma also arises in a revised additive model that accommodates imprecisely weighted reasons. There exist disjunctive and conjunctive cases. Hence the additive model is extensionally (...) inadequate. The upshot of the dilemma is that one of the most influential accounts of how reasons accrue to determine what we ought to do is flawed. -/- . (shrink)

Aggregating individuals’ consistent attitudes might produce inconsistent collective attitudes. Some groups therefore need the capacity to form attitudes that are irreducible to those of their members. Such groups, group-agent realists argue, are agents in control of their own attitude formation. In this paper, however, I show how group-agent realism overlooks the important fact that groups consist of strategically interacting agents. Only by eliminating group agency from our social explanations can we see how individuals vote strategically to gain control of their (...) groups and produce collective attitudes we cannot make sense of if we treat groups as agents. (shrink)

Social entrepreneurship is usually understood as an economic activity which focuses at social values, goals, and investments that generates surpluses for social entrepreneurs as individuals, groups, and startups who are working for the benefit of communities, instead of strictly focusing mainly at the financial profit, economic values, and the benefit generated for shareholders or owners. Social entrepreneurship combines the production of goods, services, and knowledge in order to achieve both social and economic goals and allow for solidarity building. From a (...) broader perspective, entities that are focused on social entrepreneurship are identified as parts of the social and solidarity economy. These are, for example, social enterprises, cooperatives, mutual organizations, self-help groups, charities, unions, fair trade companies, community enterprises, and time banks. Social innovation is a key element of social entrepreneurship. Social innovation is usually understood as new strategies, concepts, products, services, and organizational forms that allow for the satisfaction of needs. Such innovations are created in particular in the contact areas of various sectors of the social system. For example, these are spaces between the public sector, the private sector, and civil society. These innovations not only allow the solving of problems but also extend possibilities for public action. (shrink)

The term collaborative economy itself is relatively new, and according to the European Commission, the term is used interchangeably with the term sharing economy. The term SE was frequently used when early models, such as Airbnb or ZipCar, appeared and gained popularity, especially in the United States, but it was afterwards substituted with the term CE in the European contexts. The country reports in this collection often use the two terms interchangeably, further illustrating the fact that a generally agreed definition (...) is still missing. However, the ambition driving the term CE is to create specific European economic models with greater emphasis on the community’s involvement. In Europe, it is still the case that the definition of the CE and SE remains fuzzy, including both non-profit and for-profit models, supported by both monetary and non-monetary exchanges among participants. The phenomenon is complex, covering various fields of activity, as well as operating at various levels, ranging from the international to the national, regional, and local. Some definitions focus mostly on sustainability, while others highlight technological and financial aspects and business models specific to the phenomenon. This chapter is organized as follows. First, a short overview of the basic theoretical approaches to CE is presented. Further, the structure of the book is discussed in detail, and the text closes with a summary. M4 - Citavi. (shrink)

The book titled The Collaborative Economy in Action: European Perspectives is one of the important outcomes of the COST Action CA16121, From Sharing to Caring: Examining the Socio-Technical Aspects of the Collaborative Economy that was active between March 2017 and September 2021. The Action was funded by the European Cooperation in Science and Technology - COST. The main objective of the COST Action Sharing and Caring is the development of a European network of researchers and practitioners interested in investigating the (...) collaborative economy models, platforms, and their socio-technological implications. The network involves scholars, practitioners, communities, and policymakers. The COST Action Sharing and Caring helped to connect research initiatives across Europe and enabled scientists to develop their ideas by collaborating with peers. This collaboration opportunity represented a boost for the participants’ research, careers, and innovation potential. The main aim of this book is to provide a comprehensive overview of the collaborative economy in European countries with a variety of its aspects for a deeper understanding of the phenomenon as a whole. For this reason, in July 2017, an open call for country reports was distributed among the members of the COST Action Sharing and Caring. Representatives of the member countries were invited to produce short country reports covering: definition of the CE; types and models of the CE; key stakeholders involved; as well as legislation and technological tools relevant for the CE. Submitted reports varied in length and regarding the level of detail included, in accordance with how much information was available in each respective country at the time of writing. Editors of the book have compiled these early reports into a summary report, which was intended as a first step in mapping the state of the CE in Europe. The Member Countries Report on the Collaborative Economy, edited by Gaia Mosconi, Agnieszka Lukasiewicz, and Gabriela Avram that was published on the Sharing and Caring website, represented its first synergetic outcome and provided an overview of the CE phenomenon as interpreted and manifested in each of the countries part of the network. Additionally, Sergio Nassare-Aznar, Kosjenka Dumančić, and Giulia Priora compiled a Preliminary Legal Analysis of Country Reports on Cases of Collaborative Economy. In 2018, after undertaking an analysis of the previous reports’ strengths and weaknesses, the book editors issued a call for an updated version of these country reports. Prof. Ann Light advised the editorial team, proposing a new format for country reports and 4000 words limit. The template included: Introduction, Definition, Key Questions, Examples, Illustration, Context, Developments, Issues, Other Major Players, and Relevant Literature. The new template was approved by the Management Committee in October 2018. The task force that had supported the production of the first series of country reports acted as mentors for the team of authors in each country. The final reports arrived at the end of 2018, bringing the total number of submissions to 30. A call for book editors was issued, and a new editorial team was formed by volunteers from the participants of the COST Action: Andrzej Klimczuk, Vida Česnuityte, Cristina Miguel, Santa Mijalche, Gabriela Avram, Bori Simonovits, Bálint Balázs, Kostas Stefanidis, and Rafael Laurenti. The editorial team organized the double-blind reviews of reports and communicated to the authors the requirements for improving their texts. After reviews, the authors submitted updated versions of their country reports providing up-to-date interdisciplinary analysis on the state of the CE in 2019, when the reports were collected. During the final phase, the chapters were again reviewed by the lead editors together with all editorial team members. At the time, the intention was to update these reports again just before the end of the COST Action Sharing and Caring in 2021 and to produce a third edition. However, the COVID-19 pandemic changed these plans. Thus, this final volume was created by 82 scholars-editors and contributors-and consists of reports on 27 countries participating in the COST Action. M4 - Citavi. (shrink)

This paper discusses Bolivar Echeverria’s concept of «abundance» in the specific sense of “surplus”. The criticism that we formulate is based on the Marxist conceptual affinity between “surplus” and “surplus-product”, understanding the latter as objectification of “surplus-labour”. In Marxist terms “surplus-labour” stands for a workday segment under conditions of exploitation. According to this, we believe that the echeverrian concept of “abundance” fails in its attempt to rise above the productivist and capitalist frame of thought.

Introduction au Numéro spécial de la Revue Philosophique de Louvain.

Institutions can be strong or weak. But what does this mean? Equilibrium theories equate institutions with behavioural regularities. In contrast, rule theories explicate them in terms of a standard that people are supposed to meet. I propose that, when an institution is weak, a discrepancy exists between the regularity and the standard or rule. To capture this discrepancy, I present a hybrid theory, the Rules-and-Equilibria Theory. According to this theory, institutions are rule-governed behavioural regularities. The Rules-and-Equilibria Theory provides the basis (...) for two measures of institutional strength. First, institutions that pertain to coordination games solve problems of information. Their strength is primarily a matter of the expected degree of compliance. Second, institutions that concern mixed-motive games solve problems of motivation. Their strength can be measured in terms of the weight people attribute to its rule. (shrink)

Neoclassical economists use expected utility theory to explain, predict, and prescribe choices under risk, that is, choices where the decision-maker knows---or at least deems suitable to act as if she knew---the relevant probabilities. Expected utility theory has been subject to both empirical and conceptual criticism. This chapter reviews expected utility theory and the main criticism it has faced. It ends with a brief discussion of subjective expected utility theory, which is the theory neoclassical economists use to explain, predict, and prescribe (...) choices under uncertainty, that is, choices where the decision-maker cannot act on the basis of objective probabilities but must instead consult her own subjective probabilities. (shrink)

According to Burri (2020), a major reason why suicide is often irrational lies in the option value of life. Remaining alive is valuable because this allows for a larger menu of options, and the possibility of committing suicide in the future adds further value to the act of remaining alive now. In this note, I represent life as a trust game played by two selves – the young self and the old self – and I argue that the possibility to (...) commit suicide in the future can encourage committing suicide now, against what the theory of the option value of life predicts. (shrink)

La experiencia histórica confirma la necesaria presencia de relaciones mercantiles en cualquier proyecto socialista diseñado hoy con un mínimo de realismo. Parece ya evidente que no es la mera exclusión o inclusión del mercado lo que distingue al socialismo y al capitalismo. Mas el alto consenso actual que el mercado ha logrado a su favor, no mitiga las importantes secuelas negativas que este origina cuando es dejado a su funcionamiento espontáneo. De ahí que todos los modelos socialistas que se discuten (...) en la actualidad tengan este asunto como uno de sus ejes centrales de análisis. Las relaciones mercantiles en el socialismo tienen necesariamente que ser reguladas y subordinadas a determinados valores, de manera que puedan ser garantizadas las cuotas de justicia social que tal tipo de sociedad incorpora a las relaciones humanas. ¿Cuáles son esas regulaciones? ¿Hasta dónde han de limitar el libre juego de las leyes del mercado? ¿Es, en principio, posible la moralización exterior de este último? Para aproximar una respuesta a estas interrogantes, se hace imprescindible reflexionar sobre otra cuestión: ¿qué implicaciones humanas tienen las relaciones mercantiles?, ¿por qué exigen reguladores especiales externos al trascender a la nueva sociedad socialista? (shrink)

In this paper, I argue for a new normative theory of rational choice under risk, namely expected comparative utility (ECU) theory. I first show that for any choice option, a, and for any state of the world, G, the measure of the choiceworthiness of a in G is the comparative utility (CU) of a in G—that is, the difference in utility, in G, between a and whichever alternative to a carries the greatest utility in G. On the basis of this (...) principle, I then argue that for any agent, S, faced with any decision under risk, S should rank his or her decision options (in terms of how choiceworthy they are) according to their comparative expected comparative utility (CECU) and should choose whichever option carries the greatest CECU. For any option, a, a's CECU is the difference between its ECU and that of whichever alternative to a carries the greatest ECU, where a's ECU is a probability-weighted sum of a's CUs across the various possible states of the world. I lastly demonstrate that in some ordinary decisions under risk, ECU theory delivers different verdicts from those of standard decision theory. (shrink)

Molti esperti concordano sul fatto che la pandemia di Covid-19 sia l'occasione giusta per iniziare a tassare l’anidride carbonica, ora che la domanda e quindi anche il prezzo dei combustibili fossili sono scesi. Tuttavia, la carbon tax continua ad essere vista con sospetto, soprattutto tra i progressisti, che temono che questa misura abbia effetti regressivi. Allo stesso tempo, i sostenitori di una carbon tax a entrate positive, che finanzi investimenti in progetti ecologici, rischiano di allarmare eccessivamente l’elettorato conservatore. In questo (...) articolo, sostengo dunque che una carbon tax neutra dal punto di vista delle entrate e che miri a ridurre il cuneo fiscale può combinare gli obiettivi redistributivi della sinistra europea, la lotta contro il cambiamento climatico e un’ampia accettabilità sociale. Tuttavia, il modo in cui la carbon tax viene proposta deve essere invertito: non più “mitigare il cambiamento climatico e così facendo raggiungere anche un secondo obiettivo sociale (in questo caso l'aumento del reddito salariale)”, ma “raggiungere un certo obiettivo sociale attraverso la tassazione dell’anidride carbonica”. (shrink)

The standard version of sufficientarianism maintains that providing people with enough, or as close to enough as is possible, is lexically prior to other distributive goals. This article argues that this is excessive - more than distributive justice allows - in four distinct ways. These concern the magnitude of advantage, the number of beneficiaries, responsibility and desert, and above-threshold distribution. Sufficientarians can respond by accepting that providing enough unconditionally is more than distributive justice allows, instead balancing sufficiency against other considerations.

John Maynard Keynes’s A Treatise on Probability is the seminal text for the logical interpretation of probability. According to his analysis, probabilities are evidential relations between a hypothesis and some evidence, just like the relations of deductive logic. While some philosophers had suggested similar ideas prior to Keynes, it was not until his Treatise that the logical interpretation of probability was advocated in a clear, systematic and rigorous way. I trace Keynes’s influence in the philosophy of probability through a heterogeneous (...) sample of thinkers who adopted his interpretation. This sample consists of Frederick C. Benenson, Roy Harrod, Donald C. Williams, Henry E. Kyburg and David Stove. The ideas of Keynes prove to be adaptable to their diverse theories of probability. My discussion indicates both the robustness of Keynes’s probability theory and the importance of its influence on the philosophers whom I describe. I also discuss the Problem of the Priors. I argue that none of those I discuss have obviously improved on Keynes’s theory with respect to this issue. (shrink)

Critical theory has long resisted the notion that an “invisible hand” can operate within the real social dynamics of a free market. But despite the most radical desires of the socially critical imagination, the optimization of that “spontaneous order” or depersonalized way of ordering things known as “the economy” has become the dominant playing field and decisive electoral issue of modern politics. Within this broad contemporary context, Michel Foucault made a strange theoretical intervention that, to this day, continues to baffle (...) readers. During a lecture, he argued that Adam Smith’s invisible hand was, after all, truly and purposively, that is, for technical rather than ideological reasons, “invisible.” This article argues that there is a counter-positivism or tactical irony contained within the logic of such a controversial thesis; namely, that when one acknowledges that the principle of economic competition encourages an efficient self-organizing effect at all times, regardless of context, one is also immediately in a position to appreciate why the art of government should always maintain its political primacy over the spontaneous order of the market. (shrink)

According to lexical views in population axiology, there are good lives x and y such that some number of lives equally good as x is not worse than any number of lives equally good as y. Such views can avoid the Repugnant Conclusion without violating Transitivity or Separability, but they imply a dilemma: either some good life is better than any number of slightly worse lives, or else the ‘at least as good as’ relation on populations is radically incomplete, in (...) a sense to be explained. One might judge that the Repugnant Conclusion is preferable to each of these horns and hence embrace an Archimedean view. This is, roughly, the claim that quantity can always substitute for quality: each population is worse than a population of enough good lives. However, Archimedean views face an analogous dilemma: either some good life is better than any number of slightly worse lives, or else the ‘at least as good as’ relation on populations is radically and symmetrically incomplete, in a sense to be explained. Therefore, the lexical dilemma gives us little reason to prefer Archimedean views. Even if we give up on lexicality, problems of the same kind remain. (shrink)

In this article, I firstly discuss the person-affecting view of harm, distinguishing between the liability and the structural models of responsibility, and also explaining why it is unsatisfactory, from a moral point of view, to interpret a given harm as a loss with respect to a diachronic baseline. Then, I take sweatshops as an example and I entertain two further issues that are related to the assessment of harm and that are necessary for operationalising a comprehensive model of responsibility, that (...) takes into account both liability and structural injustice. The first one is how to interpret harm when it is coexistent with a diachronic benefit and/or the parties involved in the social structures leading to harm seek to unload their responsibility by hiding behind a cooperative deadlock. The second one is how far along the chain of actions leading to harm can structural responsibility be extended. (shrink)

The lifting of lockdown is a typical case of the tragedy of the commons, and as such should be regulated by public authority, instead of being left to the ethics and responsibility of single individuals. I would therefore argue that we should think about an intermediate phase between the lockdown and the opening of shops (which in the Italian case is the transition from the red zone to the orange zone): diversified access to commercial activities, on an hourly basis, for (...) different population groups. This can be achieved either by creating different opening hours for different commercial activities and offices, or by opening them all at the same time but introducing free entrance hours based on age groups of clients. Both solutions would imply an extension of business and office hours, contrary to what has happened in most countries, where an attempt has been made to shorten the days and in some cases, such as in Italy, a curfew has even been introduced at a certain time of the day (in Italy, at 10 pm). (shrink)

This editorial sketches the relevancy and urgency of philosophical reflection on issues in ecological management. It subsequently provides a research agenda for future research on ecological management in the field of philosophy of management. Finally, it introduces the three articles that are part of this special issue.

The paper advances a new comprehensive complex approach to the investigation of the civilizational aspects in the development of regional associations of countries. The research starts with the overview of historical dimensions of the civilizational approach and the contribution of the founding scholars to its development. It continues with the analysis of the scientific and methodological input of the followers and the critics of this approach. The authors suggest their theoretical approach to the identification of the modern local civilizations according (...) to six parameters: natural, biological, technical, economic, social, and governing. The civilizational affiliation of countries and the civilizational structure of major 17 regional associations of countries are identified. The results demonstrate that some regional groups have been more homogeneous in terms of civilizational composition, others – less homogeneous, which does not interfere with their dynamic development. However, the logic of the historical dynamics of human development indicates the inevitability of changing the current situation through prolonged civilizational conflicts resulting in significant changes in the global social dynamics and the civilizational structure of the world and of regional associations of countries. The identification of the civilization structure of countries and regional associations contributes to the rational decision-making in the areas of international economic relations and to the formation of the integration/disintegration policies on the national and regional levels. It is predicted that from 2030 global social dynamics will undergo a fundamental breakthrough that will radically change the civilizational structure of the world and regional unions of countries. Methods. The research is based on the application of the systemic and historical approach, combined with the methods of analysis, synthesis, analogy, abstraction, generalization and method of individual expert assessment. Novelty of the research. The authors have identified the civilizational structure of countries using statistically available criteria for the six groups of factors, which allows to determine the homogeneity level of the major regional groups of countries. Practical significance. Identification of civilization structure of countries and regional associations creates the opportunity for adjusting national and subregional integration and disintegration policies. The aim of the study is to determine the civilizational structure of the regional associations of countries. To achieve this goal the following tasks are set and solved: –to analyze and optimize the existing approaches to the identification of local civilizations; –to identify the current state of the countries’ belonging to this or that civilization, their civilizational structure; –to reveal the civilizational structure of the major regional blocs. (shrink)

The article analyzes the phenomenon of ownership in its legal, economic, political and philosophical perspectives. Ownership is considered as an opportunity and as a guarantee of sustainable development. Comparative context is used to identify the specificity of the bourgeois model of owners’ power (social state) and the domestic concept of power-ownership (including socialist state). The author draws conclusions about ways to overcome the competition between the state and the market for the human resource and proposes to explore the ideological provision (...) of power-ownership in order to appreciate its progressive potential and predilection in relation to the liberal model of social development . (shrink)

The economy is based on the prevailing legal system; however, the economy could go into a tailspin if the laws lose their impartiality. A perfect worker creates infinite high value with limited cost, and the result is a perfect product, usually eternal knowledge. However, free access to their products discourages workers, causing a substantial deviation from optimal resource allocation, and thereby making the supply of perfect products seriously inadequate. This significantly hurts the interests of future society. To maximize the overall (...) interests of humankind, the best policy would be to produce perfect products expeditiously, which in turn requires correcting the value society places on perfect products to respect the interests of perfect workers and future generations. Future society should essentially buy licenses from perfect workers instead of lending money to modern society for consumption. Then, the one-way trade between the present and the future will greatly increase. New companies and services will emerge around perfect products, and long-term economic growth rates will increase significantly. (shrink)

Whereas many others have scrutinized the Allais paradox from a theoretical angle, we study the paradox from an historical perspective and link our findings to a suggestion as to how decision theory could make use of it today. We emphasize that Allais proposed the paradox as a normative argument, concerned with ‘the rational man’ and not the ‘real man’, to use his words. Moreover, and more subtly, we argue that Allais had an unusual sense of the normative, being concerned not (...) so much with the rationality of choices as with the rationality of the agent as a person. These two claims are buttressed by a detailed investigation – the first of its kind – of the 1952 Paris conference on risk, which set the context for the invention of the paradox, and a detailed reconstruction – also the first of its kind – of Allais’s specific normative argument from his numerous but allusive writings. The paper contrasts these interpretations of what the paradox historically represented, with how it generally came to function within decision theory from the late 1970s onwards: that is, as an empirical refutation of the expected utility hypothesis, and more specifically of the condition of von Neumann–Morgenstern independence that underlies that hypothesis. While not denying that this use of the paradox was fruitful in many ways, we propose another use that turns out also to be compatible with an experimental perspective. Following Allais’s hints on ‘the experimental definition of rationality’, this new use consists in letting the experiment itself speak of the rationality or otherwise of the subjects. In the 1970s, a short sequence of papers inspired by Allais implemented original ways of eliciting the reasons guiding the subjects’ choices, and claimed to be able to draw relevant normative consequences from this information. We end by reviewing this forgotten experimental avenue not simply historically, but with a view to recommending it for possible use by decision theorists today. (shrink)

Preference relations are intensively studied in Economics, but they are also approached in AI, Knowledge Representation, and Conceptual Modelling, as they provide a key concept in a variety of domains of application. In this paper, we propose an ontological foundation of preference relations to formalise their essential aspects across domains. Firstly, we shall discuss what is the ontological status of the relata of a preference relation. Secondly, we investigate the place of preference relations within a rich taxonomy of relations (e.g. (...) we ask whether they are internal or external, essential or contingent, descriptive or nondescriptive relations). Finally, we provide an ontological modelling of preference relation as a module of a foundational (or upper) ontology (viz. OntoUML). The aim of this paper is to provide a sharable foundational theory of preference relation that foster interoperability across the heterogeneous domains of application of preference relations. (shrink)

In this article, we philosophically reflect on the nature of corporate governance. We raise the question whether control is still a feasible ideal of corporate governance and reflect on the implications of the epistemic insufficiency of economic institutions with regard to grand challenges like of global warming for our conceptualization of corporate governance. We first introduce the concept of corporate governance from the perspective of economics and politics. We then trace the genealogy of the concept of governance based on a (...) selective reading of Giorgio Agamben’s work, who has pointed at two interdependent paradigms of governance in the Christian tradition, and apply his categories in the context of corporate governance. We finally engage in a critical reflection on the concept of corporate governance and develop four characteristics of corporate governance that can guide future conceptual as well as empirical research in the field of corporate social responsibility of economic institutions. (shrink)

This paper considers the relevance of the Duhem-Quine thesis in economics. In the introductory discussion which follows, the meaning of the thesis and a brief history of its development are detailed. The purpose of the paper is to discuss the effects of the thesis in four specific and diverse theories in economics, and to illustrate the dependence of testing the theories on a set of auxiliary hypotheses. A general taxonomy of auxiliary hypotheses is provided to demonstrate the confounding of auxiliary (...) hypotheses with the testing of economic theory. (shrink)

Mill (1872, 1874) is an early proponent of the thesis that economics has a special domain in which it can operate relatively independently of findings from other sciences. Contra Mill, I argue that this so-called separateness-thesis is best defendedunder an externalist interpretation of Rational Choice Theory (RCT). Mill’s defence is consistent with an internalist interpretation of RCT. Internalism holds that RCT depicts psychological mechanisms operating in economic agents. I argue that such a defence fails to establish separateness, because it makes (...) economics highly depended on psychological findings. However, externalism understands RCT as an adequate description of how agents react to incentives if certain environmental structures are present. Under this interpretation, we can defend separateness by investigating which features of an environmental structure will lead agents to behave in accordance with RCT. Thereby, we can derive indicators that enable us to demarcate a separate domain for economics. (shrink)

Book Reviews Brian Epstein, Economics and Philosophy, FirstView Article.

In this conceptual paper, the traditional conceptualization of sustainable entrepreneurship is challenged because of a fundamental tension between processes involved in sustainable development and processes involved in entrepreneurship: the concept of sustainable business models contains a paradox, because sustainability involves the reduction of information asymmetries, whereas entrepreneurship involves enhanced and secured levels of information asymmetries. We therefore propose a new and integrated theory of sustainable entrepreneurship that overcomes this paradox. The basic argument is that environmental problems have to be conceptualized (...) as wicked problems or sustainability-related ecosystem failures. Because all actors involved in the entrepreneurial process are characterized by their epistemic insufficiency regarding the solving of these problems, the role of information in the sustainable entrepreneurial process changes. On the one hand, the reduction of information asymmetries primarily aims to enable actors to become critical of sustainable entrepreneurs’ actual business models. On the other hand, the epistemic insufficiency of sustainable entrepreneurs guarantees that information asymmetries remain as a source of new sustainable business opportunities. Three further characteristics of sustainable entrepreneurs are distinguished: sustainability and entrepreneurship-related risk-taking; sustainability and entrepreneurship-related self-efficacy; and the development of satisficing and open-ended solutions, together with multiple stakeholders. (shrink)

This paper addresses the issue of finite versus countable additivity in Bayesian probability and decision theory -- in particular, Savage's theory of subjective expected utility and personal probability. I show that Savage's reason for not requiring countable additivity in his theory is inconclusive. The assessment leads to an analysis of various highly idealised assumptions commonly adopted in Bayesian theory, where I argue that a healthy dose of, what I call, conceptual realism is often helpful in understanding the interpretational value of (...) sophisticated mathematical structures employed in applied sciences like decision theory. In the last part, I introduce countable additivity into Savage's theory and explore some technical properties in relation to other axioms of the system. (shrink)

An examination of Emmanuel Levinas’ writings on money reveals his distance from—and indebtedness to—a philosophical predecessor, Georg Simmel. Levinas and Simmel share a phenomenological approach to analyses of the proximity of the stranger, the importance of the face, and the interruption of the dyadic relationship by the third. Money is closely linked to the conception of totality because money is the medium that compares heterogeneous values. Levinas goes beyond Simmel in positing an ethical relation to money permitting transcendence.

We consider a case where consumers are faced with a choice between sweatshop-produced clothing and identical clothing produced in high-income countries. We argue that it is morally better for consumers to purchase clothing produced in sweatshops and then to compensate sweatshop workers for the difference between their actual wage and a fair wage than it is for them either to purchase the sweatshop clothing without this compensatory transfer or to purchase clothing produced in high-income countries.

This dissertation undertakes a philosophical analysis of “natural capital” and argues that this concept has prompted economists to view nature in a radically novel manner. Formerly, economists referred to nature and natural products as a collection of inert materials to be drawn upon in isolation and then rearranged by human agents to produce commodities. More recently, however, nature is depicted as a collection of active, modifiable, and economically valuable processes, often construed as ecosystems that produce marketable goods and services gratis. (...) Nature consists of various unproduced mechanisms or “natural machines” that are first discovered and then channeled so as to serve human ends. In short, nature as an ideal is a kind of garden that is characterized by natural objects purposefully arranged by intentional human agents. (shrink)

The game theoretic notion of best-response reasoning is sometimes criticized when its application produces multiple solutions of games, some of which seem less compelling than others. The recent development of the theory of team reasoning addresses this by suggesting that interacting players in games may sometimes reason as members of a team – a group of individuals who act together in the attainment of some common goal. A number of properties have been suggested for team-reasoning decision-makers’ goals to satisfy, but (...) a few formal representations have been discussed. In this paper we suggest a possible representation of these goals based on the notion of mutual advantage. We propose a method for measuring extents of individual and mutual advantage to the interacting decision-makers, and define team interests as the attainment of outcomes associated with maximum mutual advantage in the games they play. (shrink)

Exploramos aquí la conexión entre los conceptos de riesgo e igualdad en el argumento del observador imparcial. La concepción de la justicia que elegiría un observador imparcial se justifica por la pureza del procedimiento de elección. Sin embargo, si modelizamos esta decisión utilizando medidas del riesgo habituales en matemática financiera, veremos cómo el criterio de elección del observador bajo el velo de la ignorancia contiene una preferencia implícita por el grado de desigualdad resultante. Esto nos obliga a reconsiderar la pureza (...) procedimental de la elección. (shrink)

in recent years, policy makers have shown increasing interest in implementing policies aimed at promoting individual well-being. But how should policy makers choose their well-being policies? a seemingly reasonable first step is to settle on an agreed-upon definition of well-being. yet there currently is significant disagreement on how well-being ought to be characterized, and agreement on the correct view of well-being does not appear to be forthcoming. Nevertheless, i argue in this paper that there are several reasons to think that (...) the domain of well-being in the public policy context is narrower than that of well-being in general, which makes agreement on how to understand well-being in the public policy context more likely. (shrink)