Nancy Cartwright claims that "Causality is a hot topic today both in philosophy and economics." She may be right about philosophers, but not when it comes to economists. Cartwright talks about "economics" but nothing she says about it corresponds to what is taught in economics classes. Today, economics is dominated by model builders—but not all models involve econometrics. While all model builders do respect an endogenous-exogenous distinction between variables, this distinction will not be on the basis of which type of (...) variable "causes" which, but on which variables are "determined" (and hence explained) by the model and those which are not. (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)

This dissertation looks at a set of interconnected questions concerning the foundations of probability, and gives a series of interconnected answers. At its core is a piece of old-fashioned philosophical analysis, working out what probability is. Or equivalently, investigating the semantic question of what is the meaning of ‘probability’? Like Keynes and Carnap, I say that probability is degree of reasonable belief. This immediately raises an epistemological question, which degrees count as reasonable? To solve that in its full generality would (...) mean the end of human inquiry, so that won’t be attempted here. Rather I will follow tradition and merely investigate which sets of partial beliefs are coherent. -/- The standard answer to this question, what is commonly called the Bayesian answer, says that degrees of belief are coherent iff they form a probability function. I disagree with the way this is usually justified, but subject to an important qualification I accept the answer. The important qualification is that degrees of belief may be imprecise, or vague. Part one of the dissertation, chapters 1 to 6, looks largely at the consequences of this qualification for the semantic and epistemological questions already mentioned. It turns out that when we allow degrees of belief to be imprecise, we can discharge potentially fatal objections to some philosophically attractive theses. Two of these, that probability is degree of reasonable belief and that the probability calculus provides coherence constraints on partial beliefs, have been mentioned. Others include the claim, defended in chapter 4, that chance is probability given total history. -/- As well as these semantic and epistemological questions, studies of the foundations of probability usually include a detailed discussion of decision theory. For reasons set out in chapter 2, I deny we can gain epistemological insights from decision theory. Nevertheless, it is an interesting field to study on its own, and it might be expected that there would be decision theoretic consequences of allowing imprecise degrees of belief. As I show in part two, this expectation seems to be mistaken. Chapter 9 shows that there aren’t interesting consequences of this theory for decision theory proper, and chapters 10 and 11 show that Keynes’s attempt to use imprecision in degrees of belief to derive a distinctive theory of interest rates is unsound. -/- Chapters 7 and 8 provide a link between these two parts. In chapter 7 I look at some previous philosophical investigations into the effects of imprecision. In chapter 8 I develop what I take to be the best competitor to the theory defended here – a constructivist theory of probability. On this view degrees of belief are precise, but the relevant coherence constraint is a constructivist probability calculus. This view is, I think, mistaken, but the calculus has some intrinsic interest, and there are at least enough arguments for it to warrant a chapter-length examination. (shrink)

This book consists of a dialogue between two interlocutors, Pablo and a student, who discuss a great range of issues in social philosophy and political theory, and in particular, the emergence, working properties and economic effects of institutions. It uses the dialogical form to make philosophy more accessible, but also to show how ideas develop through intellectual interaction. The fact that one of the interlocutors is the "student" in a place in the real world makes the dialogue quasi-fictive in character (...) and enables the active engagement of the reader. After all, we are all philosophers and we develop our own philosophy by exchanging views and arguments. The dialogue form is and should remain the principal form of philosophizing, since ideas, like butterflies, do not merely exist – they develop. This is certainly the case in actual philosophical interaction, and it can be the case in written philosophical exposition. Although the dialogue does not presuppose prior acquaintance with the respective philosophical and social scientific literature under discussion in this book, it makes arguments more accessible, and conveys the feeling that there are no definite solutions to philosophical problems. (shrink)

Our response to Davidson is two‐pronged. First, we dispute the basis for his dismissal of Austrian economics as presented by O'Driscoll and Rizzo. In particular, we reject his claim, dictated entirely by his Post Keynesian perspective, concerning an “identical axiomatic foundation” of Austrian and neoclassical economics. Second, we seek to show that Davidson's criticism of neoclassicism is based on a superficial, incorrect, and outmoded reading of neoclassical economics.

‘Situational Analysis’ constitutes Popper's methodological proposal for the social sciences. There is an apparent inconsistency in the fact that, on the one hand, Popper maintains that we lear...

Uncertainty is a feeling of anxiety and a part of culture since the dawn of civilization. Civilizations have invented numerous ways to cope with uncertainty, statistics is one of those technologies. The rhetoric as the discourse of investment theory uncovers that the theory of statistics applied is a blind spot in the current conversation about investment theory and practice. Probability and prediction in investment theory look like a tying sale, since investment theory is founded on stochastical predictability. The proof of (...) unpredictability, however, lies outside the paradigm of statistics, because statistics assumes that the substrate, that produces probability outcomes, is stable. The theory of objective probabilities founds the Capital Asset Pricing Model but does not stochastically predict, and neither do Markowitz’s subjective probabilities for his portfolio theory. Statistical models for investing have a function, despite that they cannot predict: in essence, the models try to quantify statistically the equity, the fairness of the distribution of risk and return between parties involved. In the dissertation, a lot of ideas to change finance have had attention: the alternative statistical theory of Mandelbrot, bubble theory, political finance, the analysis of rhetoric, the analysis of culture, innovative practices, ethics in the form of virtue and value ethics, and the history of finance. How to make the culture of finance more heterogeneous? That starts with awareness of the current problems, the introduction of multiform metaphors for investment theory, and handling the ambiguity of theory uncertainty, by presenting, explaining and elaborating the alternatives. (shrink)

The recently formed French School of the “économie des conventions” have claimed that they are developing a revolutionary new approach to the social sciences. This group of researchers in economics, philosophy, sociology, law and history attempt to transcend the inherited analytical frameworks of structural-functionalist sociology and neoclassical economics and provide an alternative picture of the social world. This article will investigate some of these claims in detail. First, I trace the cohesion of the Convention School's ideas around the key concept (...) of convention. Conventionalist theory reflects an ontological shift towards the recognition of intersubjectivity. This shift leads to tension between the advocacy of methodological individualism on the one hand and the use of convention as a central analytical category on the other. (shrink)

Our response to Davidson is two?pronged. First, we dispute the basis for his dismissal of Austrian economics as presented by O'Driscoll and Rizzo. In particular, we reject his claim, dictated entirely by his Post Keynesian perspective, concerning an ?identical axiomatic foundation? of Austrian and neoclassical economics. Second, we seek to show that Davidson's criticism of neoclassicism (and by implication of Austrianism) is based on a superficial, incorrect, and outmoded reading of neoclassical economics.