This is a comprehensive anthology of works concerning the nature of economics as a science, including classic texts and essays exploring specific branches and schools of economics. Apart from the classics, most of the selections in the third edition are new, as are the introduction and bibliography. No other anthology spans the whole field and offers a comprehensive introduction to questions about economic methodology.

We presuppose a position of scientific realism to the effect (i) that the world exists and (ii) that through the working out of ever more sophisticated theories our scientific picture of reality will approximate ever more closely to the world as it really is. Against this background consider, now, the following question: 1. Do the empirical theories with the help of which we seek to approximate a good or true picture of reality rest on any non-empirical presuppositions? One can answer (...) this question with either a 'yes' or a 'no'. 'No' is the preferred answer of most contemporary methodologists -- Murray Rothbard is one distinguished counterexample to this trend -- who maintain that empirical theories are completely free of non-empirical ('a priori') admixtures and who see science as a matter of the gathering of pure 'data' obtained through simple observation. From such data scientific propositions are then supposed to be somehow capable of being established. (shrink)

Recently four different papers have suggested that the supervaluational solution to the Problem of the Many is flawed. Stephen Schiffer (1998, 2000a, 2000b) has argued that the theory cannot account for reports of speech involving vague singular terms. Vann McGee and Brian McLaughlin (2000) say that theory cannot, yet, account for vague singular beliefs. Neil McKinnon (2002) has argued that we cannot provide a plausible theory of when precisifications are acceptable, which the supervaluational theory needs. And Roy Sorensen (2000) argues (...) that supervaluationism is inconsistent with a directly referential theory of names. McGee and McLaughlin see the problem they raise as a cause for further research, but the other authors all take the problems they raise to provide sufficient reasons to jettison supervaluationism. I will argue that none of these problems provide such a reason, though the arguments are valuable critiques. In many cases, we must make some adjustments to the supervaluational theory to meet the posed challenges. The goal of this paper is to make those adjustments, and meet the challenges. (shrink)

It is sometimes argued that the fact that possession of perfect knowledge about the future is impossible, means that it is impossible for decisions to be rational. This reasoning is fallacious. If rationality is given a new interpretation, then decisions can be considered rational. A theory of decision that has as its basis Peirce’s theory of abduction can provide a new way of understanding decisions as rational processes. The Peircean theory of decision (i) considers decisions as part of a complete (...) strategy, and (ii) shows that decision making is governed by the same rules as scientific abduction. These rules are neither permissive rules like rules of deductive inference nor predictive like laws of nature, but rather genuine laws of conduct that determine what step should be made, if a given end is to be reached. (shrink)

It is argued that rather than a well defined F-Twist, Milton Friedman’s “Methodology of positive economics” offers an F-Mix: a pool of ambiguous and inconsistent ingredients that can be used for putting together a number of different methodological positions. This concerns issues such as the very concept of being unrealistic, the goal of predictive tests, the as-if formulation of theories, explanatory unification, social construction, and more. Both friends and foes of Friedman’s essay have ignored its open-ended unclarities. Their removal may (...) help create new common ground for more focused debate in economics. Here I show how F53 can be reread/rewritten as a socially constructivist fallibilist, and realist statement – in contrast to the received instrumentalist interpretation. (shrink)

The subjectivism of the Austrian school of economics is a special case of Dewey's transactional philosophy, also known as pragmatism or pragmatic epistemology. The Austrian economists Carl Friedrich Menger (1840-1921) and Ludwig von Mises (1881-1973) adopted an Aristotelian deductive approach to economic issues such as social behavior and exchange. Like Menger and Mises, Friedrich A. Hayek (1899-1992) viewed scientific knowledge, even in the social sciences, as asserting and aiming for objective certainty. Hayek was particularly critical of attempts to apply the (...) empiricism of the natural sciences in the social sciences. Though Hayek was not a positivist in the sense ascribed to Milton Friedman (1912-), because he accepted the possibility of final, objective certainty, Hayek's view of scientific knowledge was closer to that of the logical positivists of the Vienna circle than to Dewey's pragmatism. Mises' a priorism, asserting and aiming for apodictic certainty, represented a more extreme form of objectivism even than Hayek's. Mises was similar in this regard to non-Austrian axiomatists such as Gerard Debreau (1921-2005), though he joined Hayek in eschewing mathematical formalism. In Dewey's contrasting view, the scientist commends new, alternative ways of knowing to the scientific community, offering more profound insight or more efficacious practical applications. Alternative ways of knowing which do not offer practical or intellectual benefits are to be rejected. Both the radical subjectivism of the Austrian school and Dewey's transactional strategy justify rejection of the mirage of social justice. Dewey's knowledge as ways of knowing suggests a broader and more fundamental critique of the socialist position in the calculation debate. The arguments presented by the Austrian school can be reformulated in terms of Dewey's pragmatic philosophy. (shrink)

This paper critiques the view, widely held by philosophers of mind and cognitive scientists, that psychological explanation is a matter of ascribing propositional attitudes (such as beliefs and desires) towards language-like propositions in the mind, and that cognitive mental states consist in intentional attitudes towards propositions of a linguistic quasi-linguistic nature. On this view, thought is structured very much like a language. Denial that propositional attitude psychology is an adequate account of mind is therefore, on this view, is tantamount to (...) eliminative materialism, the denial that human beings are thinking beings. -/- I dispute this on the basis of recent work in cognitive psychology and artificial intelligence. Mental models theory, on which thought is better understood as nonpropositional intentional psychology, accords better with the evidence and offers an alternative view to propositional attitude psychology -- one that means that the denial that that is propositional is not eliminative. However, I argue that propositional attitude psychology is a useful idealization, as classical mechanics is of relativity theory, strictly but not radically false, and useful for prediction and indeed, as long as its idealized character is born in mind, for explanation of behavior. (shrink)

How, as Caldwell puts it, does one choose between rival systems all of which claim to rest on a priori foundations? On the nonfallibilistic conception it is difficult to make sense even of the possibility of rival systems of this sort. On the conception here defended, in contrast, the existence of such rival systems can be seen to be a perfectly natural and acceptable consequence of the just-mentioned difficulties we will often fact in coming to know even the intelligible traits (...) of reality: one adjudicates between such systems in the same way in which one adjudicates between all rival scientific hypotheses, namely via a complex mixture of empirical and a priori considerations. (shrink)

I argue that moral philosophers have either misunderstood the problem of moral demandingness or at least failed to recognize important dimensions of the problem that undermine many standard assumptions. It has been assumed that utilitarianism concretely directs us to maximize welfare within a generation by transferring resources to people currently living in extreme poverty. In fact, utilitarianism seems to imply that any obligation to help people who are currently badly off is trumped by obligations to undertake actions targeted at improving (...) the value of the long-term future. Reflecting on the demands of beneficence in respect of the value of the far future forces us to view key aspects of the problem of moral demandingness in a very different light. GPI Working Paper No. 1-2020. (shrink)

It is commonly held that political ignorance is rational, a response to the high costs and low benefits of acquiring political information. But many recent critics of the claim that political ignorance is rational instead urge that it is a simple consequence of agents not concerning themselves with the acquisition of political information whatsoever. According to such critics, political ignorance is inadvertent radical ignorance rather than a rational response to the incentives faced by agents in democracies. And since political ignorance (...) is not a response to incentives, these critics urge, it cannot be ameliorated by incentivizing the acquisition of political information. This paper has two goals. First, I show that these seemingly competing accounts of political ignorance are in fact complementary, together explaining much political ignorance. Indeed, there is a sense in which political ignorance can be both rational and radical at the same time. Second, I more closely examine the relationship between incentives, kinds of political ignorance, and the acquisition of political information. On the one hand, from the fact that political ignorance is rational it does not follow that it can be overcome by incentivizing the acquisition of information. On the other hand, from the fact that political ignorance is radical it does not follow that it cannot be overcome by incentivizing the acquisition of information. Lastly, the complexity of the information in question is more relevant to determining whether ignorance can be overcome than whether such ignorance is rational or radical. (shrink)

This chapter contains sections titled: Copernicus, Darwin, and Freud Some Views of Humankind Scientism and the Freudian Model of Personality The Social Sciences beyond Freud Evolution and the Social Sciences Freud and Revolutions in Thought Reading List Essay Questions.

Nudge is a popular public policy tool that harnesses well-known biases in human judgement to subtly guide people’s decisions, often to improve their choices or to achieve some socially desirable outcome. Thanks to recent developments in artificial intelligence (AI) methods new possibilities emerge of how and when our decisions can be nudged. On the one hand, algorithmically personalized nudges have the potential to vastly improve human daily lives. On the other hand, blindly outsourcing the development and implementation of nudges to (...) “black box” AI systems means that the ultimate reasons for why such nudges work, that is, the underlying human cognitive processes that they harness, will often be unknown. In this paper, we unpack this concern by considering a series of examples and case studies that demonstrate how AI systems can learn to harness biases in human judgment to reach a specified goal. Drawing on an analogy in a philosophical debate concerning the methodology of economics, we call for the need of an interdisciplinary oversight of AI systems that are tasked and deployed to nudge human behaviours. (shrink)

This PhD thesis focuses on the philosophical foundations of Neuroeconomics, an innovative research program which combines findings and modelling tools from economics, psychology and neuroscience to account for human choice behaviour. The proponents of Neuroeconomics often manifest the ambition to foster radical modifications in the accounts of choice behaviour developed by its parent disciplines. This enquiry provides a philosophically informed appraisal of the potential for success and the relevance of neuroeconomic research for economics. My central claim is that neuroeconomists can (...) help other economists to build more predictive and explanatory models, yet are unlikely to foster revolutionary modifications in the economic theory of choice. The contents are organized as follows. In chapters 1-2, I present neuroeconomists’ investigative tools, distinguish the most influential approaches to neuroeconomic research and reconstruct the case in favour of a neural enrichment of economic theory. In chapters 3-7, I combine insights from neuro-psychology, economic methodology and philosophy of science to develop a systematic critique of Neuroeconomics. In particular, I articulate four lines of argument to demonstrate that economists are provisionally justified in retaining a methodologically distinctive approach to the modelling of decision making. My first argument points to several evidential and epistemological concerns which complicate the interpretation of neural data and cast doubt on the inferences neuroeconomists often make in their studies. My second argument aims to show that the trade-offs between the modelling desiderata that neuroeconomists and other economists respectively value severely constrain the incorporation of neural insights into economic models. My third argument questions neuroeconomists’ attempts to develop a unified theory of choice behaviour by identifying some central issues on which they hold contrasting positions. My fourth argument differentiates various senses of the term ‘revolution’ and illustrates that neuroeconomists are unlikely to provide revolutionary contributions to economic theory in any of these senses. (shrink)

Introduction au Numéro spécial de la Revue Philosophique de Louvain.

The study analyzes Mises‘s approach to the question of apriorism in a broader methodological context. It shows that it is not inevitable to advocate the aprioristic character of economics (resp. science of human action), as Mises does, to maintain the subjectivist-individualist methodology and the effort to adequately grasp the general laws of human action from its perspective. The present redefinition of apriorism is developed on the basis of thoughts of Barry Smith and Alfred Schutz. It suggests abandoning the apodictic character (...) of apriori (which is untenable) and move closer to a broadly defined empiricism. The methodological insights developed in the paper are finally used to contribute to the debate between the behavioral economists and the proponents of rational choice theory. (shrink)

Feminist economics draws increasing attention from professional mainstream economists. In this paper, we discuss methodological issues, some theoretical developments – notably on the household – and issues of economic policy. We point to parallels between feminist economics and institutional economics, and argue that these relations might be strengthened to the benefit of both.

Due to the famous methodenstreit it is often well argued that Menger’s approach to social sciences can be seen as anti-historical, as according to him pure empirical studies are insufficient to establish a firm economic theory. By suggesting that some theorems have to precede historical studies, Menger may be seen as a representative of the a priori tradition in scientific method. The modern method in the mainstream of economic thinking is also to a large extent anti-historical and a priori, but (...) because of its lack of realism and extensive reliance on very limiting assumptions. The main strength of the Mengerian anti-historical approach is lesser faith in imaginary constructs, implying a higher degree of realism in theorizing. (shrink)

According to Streeck and Vogl, the neoliberalization of the state has been the result of political-economic developments that render the state dependent on financial markets. However, they do not explain the discursive shifts that would have been required for demoting the state to the role of an agent to bondholders. I propose to explain this shift via the performative effect of neoliberal agency theory. In 1976, Michael Jensen and William Meckling claimed that corporate managers are agents to shareholding principals, which (...) implied that their main task was the procurement of shareholder value. Agency theory subsequently prescribes a series of measures to ensure the alignment of principal and agent interests in corporations. The diffusion of agency theory, however, moved beyond corporate governance to reconfigure the state. Due to its reliance on capital markets, the state supposedly likewise becomes an agent of the investment public and should procure bondholder value. (shrink)

Within the social sciences, much controversy exists about which status should be ascribed to the rationality assumption that forms the core of rational choice theories. Whilst realists argue that the rationality assumption is an empirical claim which describes real processes that cause individual action, instrumentalists maintain that it amounts to nothing more than an analytically set axiom or ‘as if’ hypothesis which helps in the generation of accurate predictions. In this paper, I argue that this realist-instrumentalist debate about rational choice (...) theory can be overcome once it is realised that the rationality assumption is neither an empirical description nor an ‘as if’ hypothesis, but a normative claim. (shrink)

ABSTRACTThis essay argues that in spite of the powerful arguments by Kolodny and Broome there is a reason to be rational. The suggested reason to be rational is that if an agent complies with ratio...

Scientific models are important, if not the sole, units of science. This thesis addresses the following question: in virtue of what do scientific models represent their target systems? In Part i I motivate the question, and lay out some important desiderata that any successful answer must meet. This provides a novel conceptual framework in which to think about the question of scientific representation. I then argue against Callender and Cohen’s attempt to diffuse the question. In Part ii I investigate the (...) ideas that scientific models are ‘similar’, or structurally morphic, to their target systems. I argue that these approaches are misguided, and that at best these relationships concern the accuracy of a pre-existing representational relationship. I also pay particular attention to the sense in which target systems can be appropriately taken to exhibit a ‘structure’, and van Fraassen’s recent argument concerning the pragmatic equivalence between representing phenomena and data. My next target is the idea that models should not be seen as objects in their own right, but rather what look like descriptions of them are actually direct descriptions of target systems, albeit not ones that should be understood literally. I argue that these approaches fail to do justice to the practice of scientific modelling. Finally I turn to the idea that how models represent is grounded, in some sense, in their inferential capacity. I compare this approach to anti-representationalism in the philosophy of language and argue that analogous issues arise in the context of scientific representation. Part iii contains my positive proposal. I provide an account of scientific representation based on Goodman and Elgin’s notion of representation-as. The result is a highly conventional account which is the appropriate level of generality to capture all of its instances, whilst remaining informative about the notion. I illustrate it with reference to the Phillips-Newlyn machine, models of proteins, and the Lotka-Volterra model of predator-prey systems. These examples demonstrate how the account must be understood, and how it sheds light on our understanding of how models are used. I finally demonstrate how the account meets the desiderata laid out at the beginning of the thesis, and outline its implications for further questions from the philosophy of science; not limited to issues surrounding the applicability of mathematics, idealisation, and what it takes for a model to be ‘true’. (shrink)

Our best social scientific theories try to tell us something about the social world. But is talk of a “social world” a metaphor that we ought not take too seriously? In particular, do the denizens of the social world—cultural values like the Protestant work ethic, firms like ExxonMobil, norms like standards of dress and behavior, institutions like the legal system, teams like FC Barcelona, conventions like marriages—exist? The question is not merely academic. Social scientists use these different social entities to (...) explain social phenomena such as the rise of capitalism, the decline in oil prices, or the effect of unions on the sports labor market. But how could these explanations possibly work if social entities don’t exist? (shrink)

In this paper, I shall defend two main claims. First, Friedman’s famous paper “On the methodology of positive economics” (“F53”) cannot be properly understood without taking into account the influence of three authors who are neither cited nor mentioned in the paper: Max Weber, Frank Knight, and Karl Popper. I shall trace both their substantive influence on F53 and the historical route by which this influence took place. Once one has understood these ingredients, especially Weber’s ideal types, many of F53’s (...) astonishing sentences like “the more significant the theory, the more unrealistic the assumptions”, make good sense. Second, I shall claim that the much-discussed question whether Friedman’s essay espouses an instrumentalist or a realist position, is the wrong question to be asked. I shall illustrate that by a comparison with examples from physics in which also unrealistic assumptions are made. Also there, the question whether these assumptions are indicators of instrumentalism or realism is not appropriate. Cleared from these misunderstandings, F53 presents itself as an interesting and reasonable but much less controversial contribution to the methodology of economics. (shrink)

This paper aims (a) to provide characterizations of realism and instrumentalism that are philosophically interesting and applicable to economics; and (b) to defend instrumentalism against realism as a methodological stance in economics. Starting point is the observation that ‘all models are false’, which, or so I argue, is difficult to square with the realist's aim of truth, even if the latter is understood as ‘partial’ or ‘approximate’. The three cheers in favour of instrumentalism are: (1) Once we have usefulness, truth (...) is redundant. (2) There is something disturbing about causal structure. (3) It's better to do what one can than to chase rainbows. (shrink)

Der libertäre Paternalismus befürwortet Eingriffe in die Entscheidungsfindung von Bürgern, ohne ihnen Optionen völlig nehmen zu wollen. Vielmehr soll die Lenkung des Willens durch Schubser geschehen. Im folgenden Beitrag möchte ich zeigen, dass der libertäre Paternalismus auf tönernen Füßen steht. Ich bediene mich dabei des polemischen Bilds von Quacksalbern. Dieses Bild passt zu meinem argumentativen Vorgehen, da ich erstens zeigen will, dass der libertäre Paternalismus falsche Diagnosen über vermeintliche Krankheiten der Willensbildung stellt, und zweitens, dass er die falsche Therapie empfiehlt. (...) Im ersten Teil des Artikels kritisiere ich die Diagnose des libertären Paternalismus, wonach Menschen in ihrer Entscheidungsfindung systematisch fehlschlagen. Die Auswirkungen der zugrundeliegenden psychologischen Forschung werden missinterpretiert und damit vielen menschlichen Entscheidungen eine Art Defekt zugeschrieben. Der zweite Teil des Beitrags hinterfragt die Therapie des libertären Paternalismus. Für entsprechende Interventionen in die Wahlarchitektonik muss Wissen erlangt werden über die Richtung, in welche die Menschen jeweils geschubst werden sollten. Die hier genannte epistemische Aufgabe kann mit den theoretischen Mitteln des libertären Paternalismus nicht gelöst werden. (shrink)

In this article it is argued that there are notable parallels between all of the different strands within ethics on the one hand, and accountancy on the other that, in teaching, can be drawn upon to enhance students’ understanding of the latter. Accountancy, part of economics, draws on utilitarian ethics, but not solely so. Accounting, in addition, draws on deontological and communitarian strands in ethics. The article suggests that the teaching of accounting – especially to non-economists – would benefit substantially (...) from highlighting and developing these parallels. (shrink)

In robustness analysis, hypotheses are supported to the extent that a result proves robust, and a result is robust to the extent that we detect it in diverse ways. But what precise sense of diversity is at work here? In this paper, I show that the formal explications of evidential diversity most often appealed to in work on robustness – which all draw in one way or another on probabilistic independence – fail to shed light on the notion of diversity (...) relevant to robustness analysis. I close by briefly outlining a promising alternative approach inspired by Horwich’s (1982) eliminative account of evidential diversity. (shrink)

Econophysics is a new and exciting cross-disciplinary research field that applies models and modelling techniques from statistical physics to economic systems. It is not, however, without its critics: prominent figures in more mainstream economic theory have criticized some elements of the methodology of econophysics. One of the main lines of criticism concerns the nature of the modelling assumptions and idealizations involved, and a particular target are ‘kinetic exchange’ approaches used to model the emergence of inequality within the distribution of individual (...) monetary income. This article will consider such models in detail, and assess the warrant of the criticisms drawing upon the philosophical literature on modelling and idealization. Our aim is to provide the first steps towards informed mediation of this important and interesting interdisciplinary debate, and our hope is to offer guidance with regard to both the practice of modelling inequality, and the inequality of modelling practice. _1_ Introduction _1.1_ Econophysics and its discontents _1.2_ Against burglar economics _2_ Modelling Inequality _2.1_ Mainstream economic models for income distribution _2.2_ Econophysics models for income distribution _3_ Idealizations in Kinetic Exchange Models _3.1_ Binary interactions _3.2_ Conservation principles _3.3_ Exchange dynamics _ 4 _ Fat Tails and Savings _ 5 _ Evaluation. (shrink)

The objective of the paper is threefold. First, to argue that some of Haavelmo's methodological ideas and insights have been neglected because they are largely at odds with the traditional perspective that views empirical modeling in economics as an exercise in curve-fitting. Second, to make a case that this neglect has contributed to the unreliability of empirical evidence in economics that is largely due to statistical misspecification. The latter affects the reliability of inference by inducing discrepancies between the actual and (...) nominal error probabilities. Third, to argue that the ‘bridge pier’ between theory and data, as envisaged by Haavelmo, T [The Probability Approach to Econometrics, Econometrica, 12, 1–115], can be completed by blending some of his key methodological ideas and insights into a refined/extended version of the frequentist approach to inference. This new perspective is used to revisit dynamic stochastic general equilibrium modeling in an attempt to bring.. (shrink)

Economic methodologists most often study the relations between models and reality while focusing on the issues of the model's epistemic relevance in terms of its relation to the ‘real world’ and representing the real world in a model. We complement the discussion by bringing the model's constructive mechanisms or self-implementing technologies in play. By this, we mean the elements of the economic model that are aimed at ‘implementing’ it by envisaging the ways to change the reality in order to bring (...) it more in line with the model. We are thus concerned mainly not with the ways to change the model to ‘fit’ the reality, but rather with the model's own armature that is supposed to transform the world along theoretical lines. The case we study is Arrow–Debreu–McKenzie general equilibrium model. In particular, we show the following: gradient methods and stability could be regarded as constructive mechanisms of general equilibrium modeling in the context of market socialism debates; the obsession of general eq.. (shrink)

This paper points to some limitations of law and economics as both an explanative and a normative theory. In explaining law as the result of efficiency promoting decisions, law and economics theorists often dismiss the reasons actors in the legal system give for their behavior. Recognizing that sometimes actors may be unaware of why institutions evolve as they do, I argue that the case for dismissing reasons for action is weaker when those reasons make reference to rules of practices that (...) constitute the meaning of actions within those practices, or when they have otherwise been given well-considered defenses. In criticizing law and economics as a normative theory, I acknowledge that economic considerations are often important in deciding how to act in the personal sphere and how government should allocate its scarce resources. I argue that while the use of institutions to promote our ideals forces us to take their costs into account, it is a mistake to infer from this that the question of determining social policy is a purely economic problem, and that we should acknowledge the non-utilitarian moral ideals our law and practices promote. This is the basis of both an internal criticism--law and economics theorists have not sufficiently evaluated and weighed the value of fairness and other ideals in their utility calculations--and an external criticism-- these ideals are important in ways that can not be measured in utiles. (shrink)

This paper deals with the concepts of science and social control to be found within interwar institutional economics. It is argued that these were central parts of the institutionalist approach to economics as the key participants in the movement defined it. For institutionalists, science was defined as empirical, investigational, experimental, and instrumental. Social control was defined in terms of the development of new instruments for the control of business to supplement the market mechanism. The concepts of science and social control (...) were joined via John Dewey's pragmatic and instrumental philosophy. These ideas provided important links to the ideals of foundations, such as Rockefeller, and thus to access to research funding. Institutionalist concepts of science and social control were, however, displaced after World War II by Keynesian policy and positivist ideas of scientific methodology. (shrink)

Robert Jervis's System Effects (1997) shares a great deal with game theory, complex-systems theory, and systems theory in international relations, yet it transcends them all by taking account of the role of ideas in human behavior. The ideational element inserts unpredictability into Jervis's understanding of system effects. Each member of a ?system? of interrelated actors interprets her situation to require certain actions based on the effects these will cause among other members of the system, but these other actors' responses to (...) one's action will be based on their own perceptions of their situation and their interpretations of what it requires. These ideas are fallible, but we cannot predict the mistakes people will make if the errors are based on information we do not have or do not interpret in the same way they do. Not only members of a system but social-scientific observers and policy makers are ignorant of others' information and interpretations, and therefore are as likely to err in their behavioral predictions as are members of the system. Thus, Jervis's book raises serious questions about how to evaluate policies directed toward producing positive system effects. The questions are unanswerable at this point, but they might be susceptible to analysis by an ambitious form of political theory. (shrink)

My philosophical intuitions are those of a scientific realist. In addition to being realist in its philosophical outlook, my philosophy of economics also aspires to be realistic in the sense of being descriptively adequate, or at least normatively non-utopian, about economics as a scientific discipline. The special challenge my philosophy of economics must meet is to provide a scientific realist account that is realistic of a discipline that deals with a complex subject matter and operates with highly unrealistic models. Unrealisticness (...) in economic models must not constitute an obstacle to realism about those models. What follows is a selective and somewhat abstract summary of my thinking about economics, outlined from two perspectives: first historical and autobiographical, then systematic and comparative. The first angle helps understand motives and trajectories of ideas against their backgrounds in intellectual history. My story turns out to have both unique and generalizable aspects. The second approach outlines some of the key concepts and arguments as well as their interrelations in my philosophy of economics, with occasional comparisons to other views. More space will be devoted to this second perspective than to the first. (shrink)

The Scientific Revolution spawned not just one methodology, but two. We have emphasized Bacon's inductivism at the expense of Galileo's more abstract, sophisticated method of successive approximation, and so have failed to appreciate Galileo's contribution to the ceteris paribus problem in philosophy of science. My purpose here is to help redress this imbalance. I first briefly review the old unsolved problems, and then point out the Baconian basis of ceteris paribus, as this clause is conventionally understood, and its history from (...) Aristotle to twentieth century Positivism. Then I explore Galileo's method of dealing with unwanted impediments, and the more general problem of 'accidents.' I trace his methodology back to Archimedes and forward through the economic theories of Adam Smith (18th century), J. S. Mill (19th) and Milton Friedman (20th). Finally, I point out ways in which I think Galileo's scientific method sheds light on, and provides a partial solution to, the ceteris paribus problem. (shrink)

Ecological communities around the world are under threat while a consensus theory of community structure remains elusive. In the last decade ecologists have struggled with two seemingly opposing theories: niche-based theory that explains diversity with species’ differences and the neutral theory of biodiversity that claims that much of the diversity we observe can be explained without explicitly invoking species’ differences. Although ecologists are increasingly attempting to reconcile these two theories, there is still much resistance against the neutral theory of biodiversity. (...) Here we argue that the dispute between the two theories is a classic example of the dichotomy between philosophical perspectives, realism and instrumentalism. Realism is associated with specific, small-scale and detailed explanations, whereas instrumentalism is linked to general, large-scale, but less precise accounts. Recognizing this will help ecologists get both niche-based and neutral theories in perspective as useful tools for understanding biodiversity patterns. (shrink)

Every time another corporate scandal captures media headlines, the ‘bad apple vs. bad barrel’ discussion starts anew. Yet this debate overlooks the influence of the broader societal context on organizational behavior. In this article, we argue that misbehaviors of organizations (the ‘barrels’) and their members (the ‘apples’) cannot be addressed properly without a clear understanding of their broader context (the ‘larder’). Whereas previously, a strong societal framework dampened the practical application of the Homo economicus concept (business actors as perfectly rational (...) and egocentric utility-maximizing agents without any moral concern), specialization, individualization and globalization led to a business world disembedded from broader societal norms. This emancipated business world promotes a literal interpretation of Homo economicus among business organizations and their members. Consequently, we argue that the first step toward ‘healthier’ apples and barrels is to sanitize the larder, that is, adapt the framework in which organizations and their members evolve. (shrink)

Mathematical models are a well established tool in most natural sciences. Although models have been neglected by the philosophy of science for a long time, their epistemological status as a link between theory and reality is now fairly well understood. However, regarding the epistemological status of mathematical models in the social sciences, there still exists a considerable unclarity. In my paper I argue that this results from specific challenges that mathematical models and especially computer simulations face in the social sciences. (...) The most important difference between the social sciences and the natural sciences with respect to modeling is that in the social sciences powerful and well confirmed background theories (like Newtonian mechanics, quantum mechanics or the theory of relativity in physics) do not exist in the social sciences. Therefore, an epistemology of models that is formed on the role model of physics may not be appropriate for the social sciences. I discuss the challenges that modeling faces in the social sciences and point out their epistemological consequences. The most important consequences are that greater emphasis must be placed on empirical validation than on theoretical validation and that the relevance of purely theoretical simulations is strongly limited. (shrink)

This paper examines two models used in survey research to explain voting behavior. Although the models rely on the same data they make radically different predictions about the political future. Nevertheless, both models may be more or less correct. The models represent interacting systems and it may be impossible to get a super model of the interactions between their elements. In the natural sciences causal relationships between the elements of interacting models can often be ignored. Because voting behavior models describe (...) phenomena that are roughly the same size, the reciprocal relationships between elements of different models severely restrict the predictive power of voting behavior models. Certain analogies, and disanalogies, between the use of models in natural and social science explain why the social sciences cannot predict many of the events they are able to explain. (shrink)

The notion of bounded rationality has recently gained considerable popularity in the behavioural and social sciences. This article surveys the different usages of the term, in particular the way ‘anomalosus’ behavioural phenomena are elicited, how these phenomena are incorporated in model building, and what sort of new theories of behaviour have been developed to account for bounded rationality in choice and in deliberation. It also discusses the normative relevance of bounded rationality, in particular as a justifier of non‐standard reasoning and (...) deliberation heuristics. For each of these usages, the overview discusses the central methodological problems. (shrink)

By 'positivism' its contemporary critics mean either (a) the comte-Mill views of science, Or (b) methodological naturalism, Or (c) phenomenalism and/or instrumentalism. However, Most philosophers of science are positivists on some of these criteria and antipositivists otherwise. For example, (b) may be combined with the rejection of (c), E.G., Popper; neo-Wittgensteinians, E.G., Wright, Toulmin, Kuhn, Winch, Like nineteenth century neo-Kantians and conventionalists hold instrumentalist views of language, Theories and explanation; 'positive economics' may be either instrumentalist, E.G., Friedman, Or realist; instrumentalism, (...) Contrary to popper's account, Occurs with any admixture of realism and has pioneered anti-Inductivism, Hypotheticism and theoretical pluralism. (shrink)

For more than three decades, Integrative Social Contracts Theory (ISCT) has been lauded as a business ethics theory particularly well suited to the international arena, especially because of its alleged ability to reconcile respect for cultural idiosyncrasies and normative teeth. However, this theory has also faced various objections, many of which its authors have responded to with varying degrees of satisfaction. As a contribution to this debate, this article provides a unifying rationale for many of those objections by exploring their (...) rooting in the Separation thesis. It submits that this fact negatively impacts the theory with three major challenges, namely: significant limitations to correctly frame moral issues and situations; poor identification of hypernorms; and insufficient theoretical grounding of hypernorms. This critique highlights the need for the entanglement of the normative and the empirical in business ethics theorizing. (shrink)

James Baldwin wrote: "People who shut their eyes to reality simply invite their own destruction, and anyone who insists on remaining in a state of innocence long after that innocence is dead turns himself into a monster." When people impute meanings to events--such as the 2020 killing of George Floyd, the shooting of Jacob Blake, and subsequent upheavals--they do so with ideas that already make sense to them. And what makes most sense to people is typically due to others with (...) whom they share identities and experiences, and from whom they’ve inherited their basic intellectual scaffolding. But making sense of an event isn’t enough. We’re driven to mobilize action by convincing ourselves that our cause is morally or politically in the right. So people build on their stable-yet-evolving intellectual scaffolding and explanatory schemes to rationalize, justify, and sanctify their conduct. The easiest part of becoming what Baldwin called a moral monster is to build up these self-justifying rationalizations. The more complicated part is to construct a justifying consciousness that insures we’ll arrive safely at foregone conclusions with little risk of confronting others’ experiences in a way that might unsettle our equilibrium or sap our vehemence. In this way, people avoid facing realities that might upend their pretenses, so they are now ideally positioned to be, in Dewey’s words, “profoundly moral even in their immoralities.". (shrink)

Read Giandomenica Becchio's original paper “The Two Blades of Occam's Razor in Economics: Logical and Heuristic”...