Derivational robustness may increase the degree to which various pieces of evidence indirectly confirm a robust result. There are two ways in which this increase may come about. First, if one can show that a result is robust, and that the various individual models used to derive it also have other confirmed results, these other results may indirectly confirm the robust result. Confirmation derives from the fact that data not known to bear on a result are shown to be relevant (...) when it is shown to be robust. Second, robustness may increase the degree to which the robust result is indirectly confirmed if it increases the weight with which existing evidence indirectly confirms it. This may happen when it strengthens the connection between the core and the robust result by showing that auxiliaries are not responsible for the result. (shrink)

Jones and Felps claim that social welfare would be enhanced, if corporate managers adopted the goal of directly improving the happiness of their stakeholders instead of profit maximization. I argue that their argument doesn’t establish this. They show that a utilitarian case for profit orientation cannot be made from the armchair. But neither can the case for Jones and Felps’ preferred alternative. And their defense of it relies on empirically unsubstantiated assumptions.

Contractualism is one of the most promising ‘centers of gravity’ in business ethics. In this guest editorial we provide a concise roadmap to the field, sketching contractualism’s historic and disciplinary antecedents, the basic argumentative structure of the contract model, and its boundary conditions. We also sketch two main dimensions along which contributions to the contractualist tradition can be positioned. The first dimension entails positive versus normative theorizing – does a given contribution analyze the world as it is or how it (...) ought to be? The second dimension involves four different levels of analysis that are commonly employed in contractualist business ethics: the nano, micro, meso, and macro levels. We then proceed to position the articles comprising this special issue along these two dimensions. (shrink)

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)

This article examines the relationship between economic rationality and the possibility of a moral science of business ethics. The purpose of this inquiry is to consider whether a universal and non-controversial moral science of business ethics can be defined satisfactorily, and linked to economic rationality of managers and other stakeholders of firms operating in market economies. Economic rationality connotes economic efficiency, meaning a strictly instrumental maximization of actor utility from limited resources. This rationality is a universal and value free (or (...) value neutral) axiom: actors should and generally will be rationally efficient. Utilitarianism accepting aggregation across values is the moral framework associated with market exchange. Business ethics is about normative valuation of motives, actions, and consequences. This article argues that the common foundation across relevant ethical frameworks – moral common sense, Kantianism, virtue theory, religion as a belief system, and utilitarianism – is a first or axiomatic principle of no harm without acceptable justification. A moral science of business ethics proceeds from this no harm axiom. (shrink)

This article distinguishes between philosophy for managers and philosophy of managers. Philosophy for managers is prescriptive advice concerning the content of wisdom in practical judgment and action. Managers in action rely on a self-constructed operational code – a concept borrowed here from earlier literature – that unavoidably emphasizes turf, reputation, and coalition in career advancement. The organization is a political arena for decisions, resources, and career opportunities. While elements of operational philosophy are addressed in formal management education, treatment is haphazard (...) and fragmented in a way that leaves managers to develop a personal operational philosophy. How managers address these elements depends on whether they are idealists, realists, or social darwinists in personal philosophy. The author develops these three options as illustrative categories of operational codes for managers. (shrink)

The relationship between politics and economic knowledge is contested. One general view claims that economics should be devoid of politics because of its corrupting effects, while another view posits the converse – that politics can be distorted by the impact of economic knowledge. Both views hold that the solution is to remove the influence of the one on the other. I construe these two broad views as variations on the same contamination thesis, the idea that politics and economics are separate (...) domains and so should not contaminate one another. I suggest that this thesis is a version of the political/non-political distinction required by the ubiquitous ideal of a self-governing community, and that it therefore exhibits the limitations intrinsic to this ideal. The remedial possibilities of Michel Foucault's investigations into governmentality are then briefly explored. (shrink)

In Defense of Advertising is a theoretical defense based on the philosophy of Ayn Rand and the economics of Ludwig von Mises. It argues that the proper foundations of advertising are reason, ethical egoism, and laissez-faire capitalism. Its theme is that the social and economic criticisms of advertising are false because they are based on a false philo­sophic and economic world view. Only an alter­native world view can refute the charges and put forth a positive moral evaluation of advertising's role (...) in human life. The author defends advertising because it appeals to the rational self-interest of consumers for the rationally selfish, profit-making gain of the capitalists. (shrink)

The dissertation concerns F. A. Hayek’s critique of legislation. The purpose of the investigation is to clarify and assess that critique. I argue that there is in Hayek’s work a critique of legislation that is distinct from his well-known critique of social planning. Further that the main claim of this critique is what I refer to as Hayek’s legislation tenet, namely that legislation that aims to achieve specific aggregate results in complex orders of society will decrease the welfare level. The (...) legislation tenet gains support; from the welfare claim – according to which there is a positive correlation between the utilization of knowledge and the welfare level in society; from the dispersal of knowledge thesis – according to which the total knowledge of society is dispersed and not available to any one agency; and from the cultural evolution thesis – according to which evolutionary rules are more favorable to the utilization of knowledge in social cooperation than are legislative rules. More specifically, I argue that these form two lines of argument in support of the legislation tenet. One line of argument is based on the conjunction of the welfare claim and the dispersal of knowledge thesis. I argue that this line of argument is true. The other line of argument is based on the conjunction of the welfare claim and the cultural evolution thesis. I argue that this line of argument is false, mainly because the empirical work of political scientist Elinor Ostrom refutes it. Because the two lines of argument support the legislation tenet independently of each other, I argue that Hayek’s critique of legislation is true. In this dissertation, I further develop a legislative policy tool as based on the welfare claim and Hayek’s conception of coercion. I also consider Hayek’s idea that rules and law are instrumental in forging rational individual action and rational social orders, and turn to review this idea in light of the work of experimental economist Vernon Smith and economic historian Avner Greif. I find that Smith and Greif support this idea of Hayek’s, and I conjecture that it contributes to our understanding of Adam Smith’s notion of the invisible hand: It is rules – not an invisible hand – that prompt subjects to align individual and aggregate rationality in social interaction. Finally, I argue that Hayek’s critique is essentially utilitarian, as it is concerned with the negative welfare consequences of certain forms of legislation. And although it may appear that the dispersal of knowledge thesis will undermine the possibility of carrying out the utilitarian calculus, due to the lack of knowledge of the consequences of one’s actions – and therefore undermine the legislation tenet itself – I argue that the distinction between utilitarianism conceived as a method of deliberation and utilitarianism conceived as a criterion of correctness may be used to save Hayek’s critique from this objection. (shrink)

The Efficient Market Hypothesis often seems to suggest only that most people cannot outguess the financial markets. But the originator of the hypothesis, Eugene Fama, made the stronger claim that people cannot outguess the financial markets because financial-market prices are correct: They incorporate all known information accurately. This view omits the role that human traders’ interpretations of information must play if the information is to prompt them to buy or sell. Buyers and sellers disagree about the meaning of current information, (...) so at least half of them must be wrong. Bringing in many more (but equally fallible) people to predict the future does not somehow make their (collective) answer “right.” This is a logical disproof of the Fama hypothesis, but the inherently speculative nature of financial markets makes its empirical falsification (or verification) ambiguous if not impossible. The hypothesis must therefore be considered an unscientific article of faith. (shrink)

Trust has been widely investigated both theoretically and empirically. Whether thought of as the result of a calculation of costs/benefits, a shared identity, or a leap of faith, there always seems to be an ‘as if’ rhetorical gesture which is ultimately needed to explain how actors move from the base of trust to expectations of trust via suspending judgment on uncertainty and fear of vulnerability to betrayal and exploitation — the actors ultimately act ‘as if’ they do not fear uncertainty (...) and vulnerability to betrayal. Yet this ‘as if’ element has remained seriously under-theorised. Drawing on Derrida's deconstruction, I propose a way of thinking this ‘as if’ element of trust. I thus argue that the decision to trust occurs in a terrain of structural undecidability. The latter is thought of as the possibility condition of trust as well as the subject of trust and a sense of responsibility for this trust. The aporiatic nature of undecidability makes this trust an auto-immune trust which obeys the tripartite logic of ‘without’ which both negates and affirms trust. (shrink)

In legal academia it is highly controversial how to ‘be original’ in legal research. This article will try to maintain an attitude of tolerance in not promoting or discrediting one particular methodology. Instead, it will identify four different ways of ‘being original’. Perhaps the most common approach is to deal with ‘micro-legal questions’. Many legal academics also pursue research in ‘macro-legal questions’. Less common but growing is the importance of ‘scientific legal research’ and research in ‘non-legal topics’.

Charles Peirce had significant interests in economics. He reworked the mathematical economic models of Cournot and Jevons in the 1870s. He conceived of the transitive axiom of consumer preferences in 1874. Peirce also developed a thesis of the cognitive efficiency of the human mind, abduction. He criticized Newcomb's economic writings. These forays into economics affected the six essays on pragmatism. These interests in economics are integrated with the meaning of the pragmatic maxim in Peirce's 1903 Harvard Lectures.

In this paper, I argue that recent sociological theory has become increasingly bifurcated into two mutually incompatible styles of theorizing that I label formalist and behavioral-realist. Formalism favors mathematization and proposes an instrumentalist ontology of abstract processes while behavioral-realist theory takes at its basis the "real" physical individual endowed with concrete biological, cognitive and neurophysiological capacities and constraints and attempts to derive the proper conceptualization of social behavior from that basis. Formalism tends to lead toward a conceptually independent sociology that (...) in principle requires only minimal reference to the empirical and ontological storehouse of other disciplines, while behavioral-realist theory leads to an interdisciplinary sociology that can be located within a hierarchy of behavioral sciences, leading to questions regarding the relationship between sociology and other disciplines as well as issues of transdisciplinary unification and possible interdisciplinary reduction. I explore the consequences of this split for the project of explanatory sociological theory within the context of how it has manifested itself in sociological network theory and social psychology. I close with a critique and assessment of formalist tendencies in sociological theorizing. (shrink)

In this response to the symposium on our two books we try to deal as fully as possible in the brief space available with most of the major issues raised by our distinguished commentators. Although at least three of them are in agreement with the main thrust of the arguments put forward in our books, they all raise important issues relating to methodology, the history of economic thought, and a number of more specific issues. Our answer is based on the (...) restatement of the chief purpose of our two books, describing the intellectual history of the evolution of economic science emphasising the role of the excision of the social and the historical from economic theorising in the transition from political economy to economics, only for the two to be reunited through the vulgar form of economics imperialism following the monolithic dominance of neoclassical economics at the expense of pluralism after the Second World War. The importance of political economy for the future of economic science is vigorously argued for. (shrink)

Although since the 1960s human capital theory has played a major role in guiding educational policy, philosophical issues that stem from this development have rarely been discussed. In this article, I critically examine how the idea that human capital should serve as a guide to educational policy making stands in relation to the role assigned to education in promoting social cooperation. I begin by exploring the conception of human conduct that underlies human capital theory. I then move to examine the (...) conception of social cooperation that tacitly guides human capital theory and maintain that it could not be effectively defended. I, therefore, turn to examine alternative ways to combine between human capital theory and the promotion of social cooperation. My main argument is that under existing conditions there is a deep theoretical incompatibility between the philosophical foundations of human capital theory and the ways in which education seeks to promote social cooperation. (shrink)

This study investigates the relationship between moral schemas and corruption in public procurement. It adopts a moral schema framework to examine procurement-induced corruption from Uganda. Experiences, attitudes, and values of respondents are used to construct future behavior of public procurement staff. The schema framework was built around the premise that procurement-related corruption is a function of the social framework and human nature paradox, constructing logical justification for the acts of corruption. The study uses data from 474 public procurement staff to (...) demonstrate that social identity, ethical egoistic, legislative, amoral, and religious moral schemas account for 78.51% of the variance in moral schema of respondents. All these schemas were found to be significant predictors, accounting for 73.3% of public procurement corruption. The paper urges managers of procuring and disposing entities to utilize moral scripts in reducing corruption. Managers are encouraged to engage in morally responsible behaviors to promote ethics and value-for-money transactions. The paper provides an alternative framework for examining corruption in sub-Saharan Africa where explicit elaboration of insights on corruption is still lacking. (shrink)

In his book Economics as a Moral Science , Bernard Hodgson argues that economics is not value neutral as is often claimed, but is a value-laden discipline. In the long argument for this in his book, Hodgson never discusses or even mentions corporations. This article explains that corporations are absent from Hodgson’s discussion because he considers only the consumption side of general equilibrium theory (GET), and it shows that if Hodgson had included corporations and the production side, his overall argument (...) would have been more complete and convincing. This article shows that Hodgson’s methodology, when applied to the production side of GET, has value implications for CEOs of large corporations, for shareholders and members of Boards of Directors, and for legislators and regulators of business. Hodgson’s claim that economics must consider the ability of economic agents to create or change the institutional, cultural, and organizational conditions of their own economic actions is supported and expanded. (shrink)

One prominent aspect of recent developments in science studies has been the increasing employment of economic concepts and models in the depiction of science, including the notion of a free market for scientific ideas. This gives rise to the issue of the adequacy of the conceptual resources of economics for this purpose. This paper suggests an adequacy test by putting a version of free market economics to a self-referential scrutiny. The outcome is that either free market economics is self-defeating, or (...) else there must be two different concepts of free market, one for the ordinary economy, the other for science. Both conclusions will impose limits on the applicability of the ordinary economic concept of the market to the study of science. (shrink)

All social phenomena, all social interaction, anything that exists in society, is temporal. Anticipation of futures is a necessary part of all social actions, and particularly so in the world of modern organisations. If social sciences are to be relevant they should also be able to say something about possible and likely futures. My paper articulates an ontology for futures studies and then, on that ontological basis, specifies the methodology of futures studies. Critical realist ontology explains why there are multiple (...) possible futures. The actual is only a part of the real world, which also consists of non-actualised possibilities and unexercised powers of the already existing structures and mechanisms that are transfactually efficacious in open systems. Social sciences are also involved in envisaging better possible futures in terms of concrete utopias. However, building concrete utopias is not the only task of a futurologist. We are also interested in other possible and likely futures, and in determining the ways in which our actions and the actions of others contribute—sometimes via unintended effects and consequences—to making some of them real. Empirico-analytical models have a role to play, as do systematic modelling of geo-historical realities: embodied agency and actors; modes of action; rules and principles; resources, as competencies and facilities; practices; relational structures ; and self-organising social systems. However, scenario-construction should also be seen as self-reflective exercise in cultural studies, moral philosophy and creative ability. (shrink)

Milton Friedman’s 1953 essay created controversy and consternation amongst economists. It provided a prescription, based on empirically generated predictive success, of how to do economics, yet many saw it as a concession of the search for truth and theoretical beauty within the discipline. This article reviews a 50th anniversary festschrift devoted to views of the essay. The purpose of the volume is to provide today’s reader with the essay, responses, and a guide to interpreting it. The volume is selective and (...) several contributors have their own agendas, but the feeling of tumult the essay still engenders is nicely conveyed. (shrink)

In any academic discipline, published articles in respective journals represent "production units" of scientific knowledge, and bibliometric distributions reflect the patterns in such outputs across authors or "producers." Closely following the analysis approach used for similar studies in the economics and finance literature, we present the first study to examine whether there exists an empirical regularity in the bibliometric patterns of research productivity in the business ethics literature. Our results present strong evidence that there indeed exists a distinct empirical regularity. (...) It is the so-called Generalized Lotka's Law of scientific productivity pattern: the number of authors publishing ç papers is about Í /n c of those publishing one paper. We discuss the likely processes that underlie the productivity pattern postulated by the Generalized Lotka's Law. We find that the value of the exponent is equal to about 2.6 for the comprehensive bibliometric data across the two leading business ethics journals. The observed research productivity pattern in the business ethics area, a relatively young discipline, is interestingly very consistent with those found in much older, related business disciplines like economics, accounting, and finance. We discuss the general implications of our findings. (shrink)

Business research and teaching institutions play an important role in shaping the way businesses perceive their relations to the broader society and its moral expectations. Hence, as ethical scandals recently arose in the business world, questions related to the civic responsibilities of business scholars and to the role business schools play in society have gained wider interest. In this article, I argue that these ethical shortcomings are at least partly resulting from the mainstream business model with its taken-for granted basic (...) assumptions such as specialization or the value-neutrality of business research. Redefining the roles and civic responsibilities of business scholars for business practice implies therefore a thorough analysis of these assumptions if not their redefinition. The taken-for-grantedness of the mainstream business model is questioned by the transformation of the societal context in which business activities are embedded. Its value-neutrality in turn is challenged by self-fulfilling prophecy effects, which highlight the normative influence of business schools. In order to critically discuss some basic assumptions of mainstream business theory, I propose to draw parallels with the corporate citizenship concept and the stakeholder theory. Their integrated approach of the relation between business practice and the broader society provides interesting insights for the social reembedding of business research and teaching. (shrink)

This paper evaluates the current use of the Principal Agent Model (PAM) in accounting and finance, focusing on the agent'ss use of private information. The agent'ss behavioral norms in the the PAM deviate from commonly held ethical values in society, from models of man in conventional economic theory, and also from behavioral foundations of related business school fields like corporate strategy, business ethics, and human resource management. Still, it would be unwise to reject the PAM solely because of its distasteful (...) ethical assumptions. The model does appear to have predictive power, but its descriptive or normative qualities remain unexplored. The popularity of the PAM, with its extreme model of man, raises fundamental questions about the impact of this model on business school stakeholders and society at large. (shrink)

From the mid-1960s until the late 1980s, the well-known general philosophies of science of the time were applied to economics. The result was disappointing: none seemed to fit. This paper argues that this is due to a special feature of economics: it possesses ‘orientational paradigms’ in high number. Orientational paradigms are similar to Kuhn’s paradigms in that they are shared across scientific communities, but dissimilar to Kuhn’s paradigms in that they are not generally accepted as valid guidelines for further research. (...) As will be shown by several examples, orientational paradigms provide economics with common points of reference that support its epistemic coherence and make scientific discourse more easily possible across school boundaries. With the help of systematicity theory, a newer general philosophy of science, one can further elucidate the role of orientational paradigms with regard to scientific progress. (shrink)

A political epistemology that enables us to determine if political actors are likely to know what they need to know must be rooted in an ontology of the actors and of the human objects of their knowledge; that is, a political anthropology. The political anthropology developed in Power Without Knowledge envisions human beings as creatures whose conscious actions are determined by their interpretations of what seem to them to be relevant circumstances; and whose interpretations are, in turn, determined by webs (...) of belief built from somewhat heterogeneous streams of incoming ideas. This anthropology, then, has two components. Ideational heterogeneity undermines the aspiration of technocracy to predict human behavior and the aspiration of social science to arrive at lawlike generalizations about it. Ideational determinism, however, which is less important than ideational heterogeneity to the critique of technocracy, may be more important to generating epistemological approaches to other forms of politics, all of which involve the actions of human beings who, as such, are largely at the mercy of the fallible ideas to which they have been exposed. (shrink)

Read Donald Gillies' original paper 'The Empirical Success of Keynesianism'...

The paper takes a fresh look at two essays that Adam Smith wrote at the very beginning of his career. In these essays, Smith explains his philosophy of science, which is social constructivist. A social constructivist reading of Smith strengthens the scholarly consensus that The Wealth of Nations needs to be interpreted in light of the general moral theory he explicates in The Theory of Moral Sentiments, as the two essays and TMS stress the importance of the same concepts: e.g., (...) moral imagination, the socially embedded individual, and humility. The connecting tissue between all three works is made up of sentiments and values. Smith regards the socially embedded human as the agent in all three realms, and humans are always driven by values. Smith not only conceives of economics as an applied moral philosophy, but also bases both research areas on a view of knowledge creation that stresses specific epistemic values. If mainstream economic theory wants to have any claim to Adam Smith, it would have to change not only what it argues but also how it argues. Economists would have to replace the language of mathematics with the language and logic of moral philosophy and give values centre stage. (shrink)

This paper discusses the development of the field of economic methodology during the last few decades emphasizing the early influence of the "shelf" of Popperian philosophy and the division between neoclassical and heterodox economics. It argues that the field of methodology has recently adopted a more naturalistic approach focusing primarily on the "new pluralist" subfields of experimental economics, behavioral economics, neuroeconomics, and related subjects.

The paper analyzes the methods that macroeconomists can use to provide evidence in support of causal hypotheses: the instrumental variable method and econometric causality tests. It argues that the evidence that macroeconomists provide when using these methods is in principle too inconclusive to support the hypothesis that X directly type-level causes Y, where X and Y stand for macroeconomic aggregates like the real interest rate and aggregate demand. The evidence provided by the IV method is too inconclusive because it derives (...) from conditions requiring that there be no confounders of I and X and X and Y, and because in macroeconomics, confounders that cannot be controlled for or measured are likely to be present. The evidence provided by econometric causality tests is too inconclusive because they can be shown to rely on the conditions of the IV method at least tacitly. (shrink)

Consumers and producers aim to maximize their welfare through economic transactions. Their welfare is determined by choices and preferences. Therefore, understanding social and economic welfare projected by conventional and Islamic economics requires exploring their underlying paradigms and axioms for preference formation, choices, and welfare maximization. Even though conventional economics assumes that preferences are given, it actually considers that they are driven by self-interest. It does not discuss preference formation along determining moral axioms. Rather, it starts from revealed preferences to understand (...) choices of consumers and producers. Thus, preference formation is like a black box. This paper is an attempt to unlock this black box by exploring preference formation along its underlying moral axioms for good life. The paper discusses Islamic moral ideals within the Islamic worldview along the implications of those axioms for consumers, employees, and employers. The paper also explores the gap between those ideals and Muslim reality. It suggests how to empirically test the relationship between moral axioms and ethical behaviors of consumers, employers, and employees. It concludes that internalizing moral axioms would serve as an ethical compass necessary to establish formal and informal institutions for efficient and ethical business organizations. (shrink)

The Meaning of Belief: Religion from an Atheist’s Point of View, by CraneTim. Cambridge, Mass.: Harvard University Press, 2017. Pp. xiv + 203.

A collective volume in memoriam Mihail Radu Solcan.

ABSTRACTIn Robust Political Economy, Mark Pennington argues for a minimal state founded not on neoclassical economic principles but on a return to classical liberalism. Pennington makes his case on the basis of Hayek’s “knowledge” problem and public-choice theory’s “incentive” problem. While this is a welcome start, classical liberalism is a promising agenda for a new economics, and for the “reform of capitalism,” only if it is accompanied by an explicit rejection of Milton Friedman’s subordination of normative to positive economics, and (...) by a move beyond the traditional division of the economy into twin spheres to embrace a third element: the domestic sphere. (shrink)

The financial crisis, and associated scandals, created a sense of a juridical deficit with regard to the financial sector. Forms of independent judgement within the sector appeared compromised, while judgement over the sector seemed unattainable. Elites, in the classical Millsian sense of those taking tacitly coordinated ‘big decisions’ over the rest of the public, seemed absent. This article argues that the eradication of jurisdictional elites is an effect of neoliberalism, as articulated most coherently by Hayek. It characterizes the neoliberal project (...) as an effort to elevate ‘unconscious’ processes over ‘conscious’ ones, which in practice means elevating cybernetic, non-human systems and processes over discursive spheres of politics and judgement. Yet such a system still produces its own types of elite power, which come to consist in acts of translation, rather than judgement. Firstly, there are ‘cyborg intermediaries’: elites which operate largely within the system of codes, data, screens and prices. Secondly, there are ‘diplomatic intermediaries’: elites who come to narrate and justify what markets are ‘saying’. The paper draws on Lazzarato’s work on signifying vs asignifying semiotics in order to articulate this, and concludes by considering the types of elite crisis which these forms of power tend to produce. (shrink)

This essay examines the issue of false assumptions in models via a case study of a prominent economic model of sustainable development, wherein the assumption of an infinite future plays a central role. Two proposals are found to be helpful for this case, one based on the concept of derivational robustness and the other on understanding. Both suggest that the assumption of an infinite future, while arguably legitimate in some applications of the model, is problematic with respect to what I (...) call “Parfitian” welfare functions. This result is relevant to debates about discounting the future in economics and environmental ethics. (shrink)

This paper argues that the subsistence of the fundamental theorem of contemporary financial mathematics is the ethical concept ‘reciprocity’. The argument is based on identifying an equivalence between the contemporary, and ostensibly ‘value neutral’, Fundamental Theory of Asset Pricing with theories of mathematical probability that emerged in the seventeenth century in the context of the ethical assessment of commercial contracts in a framework of Aristotelian ethics. This observation, the main claim of the paper, is justified on the basis of results (...) from the Ultimatum Game and is analysed within a framework of Pragmatic philosophy. The analysis leads to the explanatory hypothesis that markets are centres of communicative action with reciprocity as a rule of discourse. The purpose of the paper is to reorientate financial economics to emphasise the objectives of cooperation and social cohesion and to this end, we offer specific policy advice. (shrink)