In this article, we address why our management of the economy, community and business has led to global warming and we discuss the importance of worldviews, ontology, epistemology and axiology in the search for alternative paths of development. We do this by focusing on the concept of Circular Economy. Circular Economy is often presented as a solution to the problems of a globalized economy in the form of over-exploitation of resources, climate change and pollution of the environment. Within the mainstream (...) economics paradigm, the aim is how to increase the effectiveness of resource extraction and utilization in order to maintain growth. We contrast this with the paradigm of Ecological Economics where the goal of the economy is to achieve and secure a higher quality of life. Circular Economy often side steps the deep ontological and epistemological questions we need to answer if we are to address the complex and interrelated environmental, economic and social problems we face today. This can be a limiting factor in the search for creative and long-term solutions. However, within the Circular Economy discourse, we find strands that critically engage with the foundations of mainstream Economics and so, innovative solutions for the society of the future are a possibility. We argue that to bring about a lasting solution to the interconnected social, economic and environmental problems, Circular Economy must engage with the ontological, epistemological and axiological foundations of mainstream economics. To further this argument, we apply Imre Lakatos’ ‘research program’ model to philosophy of science as our framework of analysis and draw lessons for business and communities. (shrink)

Social science employs teleological explanations which depend upon the rationality principle, according to which people exhibit instrumental rationality. Popper points out that people also exhibit critical rationality, the tendency to stand back from, and to question or criticise, their views. I explain how our critical rationality impugns the explanatory value of the rationality principle and thereby threatens the very possibility of social science. I discuss the relationship between instrumental and critical rationality and show how we can reconcile our critical rationality (...) with the possibility of social science if we invoke Popper’s conception of limited rationality and his indeterminism. (shrink)

The disagreement about intertemporal coordination between Austrians and Keynesians is explained pointing out to differences both in the way expectations and motivations are treated and the methodological principles assumed by each view. Austrians believe that research should proceed showing first what guarantees a successful coordination in individualsŠ plans, and only latter showing which could hinder the “natural” course. Keynes, on the contrary, do not start with any ideal state of affairs, but allows economies to work either “good” or “bad” according (...) to the prevailing expectations among entrepreneurs. In this way uncertainty and expectations are fully incorporated into economic theory. A link between Austrian approach and popperian situational analysis is suggested. (shrink)

This work consists of two parts. Part I will be a contribution to a philo- sophical discussion of the nature of causal explanation. It will present my contrastive counterfactual theory of causal explanation and show how it can be used to deal with a number of problems facing theories of causal explanation. Part II is a contribution to a discussion of the na- ture of interest explanation in social studies of science. The aim is to help to resolve some controversies (...) concerning interest explanation by explicating the concept of interest and its explanatory uses by using the account of explanation developed in Part I. (shrink)

Popper's version of situational analysis, with its focus on the logic of situations and the rationality principle, fails to provide cogent explanations of the human decisions and actions underpinning social phenomena. It so fails because where he demanded objectivism and formalism in the social sciences, his substantive arguments lost contact with the psychological and subjectivist realities of the human realm. But Popper also devised some key elements of a social ontology. It is argued that although there are crucial gaps in (...) his ontology, it can be augmented to give situational analysis the potential to reach beyond pure logic and rationality and to bring social theory closer to grasping the real world of human action. (shrink)

Many methodologists are firmly convinced that Popper's arguments concerning the status of the rationality principle (RP) are incoherent or incompatible with the essentials of falsificationism. The present essay first shows that the accusation of incompatibility of situational logic with falsificationism does not hold up to scrutiny but then shows that Popper's arguments are nonetheless flimsy if not indefensible. For it seems that one can distinguish between two different versions of the RP in Popper's writings. If the first version is plainly (...) "objectivist" and can be characterized with Popper as empirically false, the second one is rather "subjectivist" and is not falsifiable as such. The essay shows that this second reading of the RP is the one that Popper finally adopts but that, unfortunately enough, this formulation of the RP looks more like a metaphysical statement than like an empirical law. It could then be held to be a priori valid as such, by analogy with Popper's line of argument concerning the principle of causality. If this is correct, then Popper's thesis on the empirical status of the RP is confuted. (shrink)

Since the early days of economics, the rationality principle has been a core element of economic theorizing. It is part of almost any theoretical framework that economists use to generate knowledge. Despite its central role, the principle’s epistemic status and function continue to be debated between empiricists and rationalists, and a clear winner is yet to emerge. One point of contention is that we cannot explain the principle’s special status in light of clear evidence against its empirical validity and the (...) continuous conceptual changes it undergoes. In this paper, I argue that we should think of the rationality principle as a functional a priori principle along the lines of a pragmatic theory of constitutive elements recently put forward by David Stump. Such an approach would explain the principle’s persistence and changing status. More generally, the pragmatic theory of constitutive elements in science offers a viable alternative to rationalism and empiricism that allows for approaching the debate about the status and function of the rationality principle in economics. It provides a new framework and starting point to think about the usefulness of a central first principle in economics in a constructive way. (shrink)

Adaptations have varied relations to their source material, making it hard to formulate a general theory. Avoiding the attempt, we characterize a narrower, more unified class of reflective adaptations which communicate an active and sometimes critical relation to the source's framework. We identify the features of reflective adaptations which give them their distinctive interest. We show how these features are embodied in Akira Kurosawa's Throne of Blood, an adaptation with a radically shifted perspective on the relation between character and situation (...) compared to its Shakespearean source. We identify some of the artistic choices through which this response to the source is conveyed, such choices being a characteristic feature of reflective adaptations. (shrink)

In the methodology of scientific research programs (MSRP) there are important features on the problem of prediction, especially regarding novel facts. In his approach, Imre Lakatos proposed three different levels on prediction: aim, process, and assessment. Chapter 5 pays attention to the characterization of prediction in the methodology of research programs. Thus, it takes into account several features: (1) its pragmatic characterization, (2) the logical perspective as a proposition, (3) the epistemological component, (4) its role in the appraisal of research (...) programs, and (5) its place as a value for scientific research. -/- The notion of “novel facts” is highly relevant in his conception, where several aspects are involved: the directions of novel facts, the different kinds of novelty, and the transition from six possible options of “novel facts” to four choices. Thereafter, the prediction of novel facts as the criterion of appraisal is considered. On the one hand, this requires analyzing the theoretical, empirical, and heuristic possibilities of appraisal; and, on the other, whether there is an overemphasis on the role of prediction in methodology of scientific research programs. As a consequence, there is an analysis of Lakatos’ criterion of appraisal in MSRP and economics. (shrink)

This paper concerns the problem of how to give historical explanations of scientist's decisions to prefer one theory over another. It is argued that such explanations ought to contain only statements about the beliefs and preferences of the agents involved, and, in particular, ought not to include evaluative premises about the theories themselves. It is argued that Lakatos's attempt to build into such historical explanations premises of an evaluative kind is deficient. The arguments of Laudan to the effect that such (...) explanations depend crucially upon evaluative assumptions about the rationality or irrationality of decisions are examined. It is argued that they do not establish the need for such assumptions. Similar criticisms are then shown to be applicable to a version of the 'hermeneutical' model of explanation for human actions. (shrink)

In this article, I revisit Pierre Bourdieu's concept of habitus and contrast it with Herbert Simon's notion of bounded rationality. Through a discussion of the literature of economic sociology on status and Fligstein's political-cultural approach, I argue that this concept can be a source of fresh insights into empirical problems. I find that the greater the change in the social environment, the more salient the benefits of using habitus as a tool to analyze agents' behavior.

To improve our methods of rational inquiry and decision-making we need to recognize that such methods should guide but not fully determine the choices of individuals. Failure to acknowledge the essential incompleteness of rational methods made the methods of Classical Rationalism quite impractical and opened them to skeptical refutation. Mitigated Skepticism and Fideism failed to correct the error, and as a result put undesirable limits on rational inquiry. When the guiding character of rational methods is recognized, existing methods of scientific (...) research of personal and social decision-making can themselves be rationally assessed and improved. Viewing rational methods as guides thus opens a whole field of inquiry, the inquiry into what rational methods are most useful for specific purposes and in specific situations. (shrink)

Some of the problem areas in which British philosophers of science have recently been engaged are described and some of the major contributions noted. Two sets of problems are given special attention: one concerned with the analysis of probability statements and one concerned with the appraisal of scientific theories. Three traditions in the approach to this second set of problems are distinguished. These might be called the Carnapian, the Popperian and the Wittgensteinian traditions.

This thesis attempts to justify a normative role for methodology by sketching a pragmatic way out of the dichotomy between two major strands in economic methodology: empiricism and postmodernism. I discuss several methodological approaches and assess their aptness for theory appraisal in economics. I begin with the most common views on methodology and argue why they are each ill-suited for giving methodological prescriptions to economics. Then, I consider positions that avoid the errors of empiricism and postmodernism. I specifically examine why (...) the two major strands of methodological criticism fail to give helpful methodological advice to economists and sketch out a pragmatic approach that can do this. (shrink)

The repercussion of Imre Lakatos’s methodology in economics has passed through quite different periods. His influence can be seen in discussions that affect economics as basic science (“positive economics”) and applied science (“normative economics”). This study examines the main lines of this historical trajectory and makes a critical analysis of the evolution of its repercussions on economic methodology. Starting with the initial period of promising attitude (1972–74), the analysis moves on through the middle period of more influence (1974–89) and then (...) turns to the critical stance of the later period (1989–). These steps provide a clear picture of strengths and weaknesses of the contributions of Lakatos’s methodology of scientific research programs to economic methodology. (shrink)

Modelling agency in economics rests primarily on the assumption of instrumental rationality. Managerial agency is more often analysed with a more complex ‘behavioural’ approach. This has led for years to a sterile debate about the usefulness of the abstract rationality postulate between those who think that it is all but sufficient and those who doubt if it is even necessary. This paper argues that positing an abstract (but real) rational core to managerial agency that is then ‘concretised’ towards actual managerial (...) behaviour is the way forward. Rationality is a necessary but not sufficient characterisation of managerial agency. The theoretical argument is supported by reference to the case of the ill-fated Long Term Capital Management built around the Black, Merton and Scholes Nobel Prize-winning derivatives pricing model. It is argued that the 1998 failure of the portfolio was not the result of a failure of rational agency but of the complexities of its implementation. (shrink)