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While in medicine, comparison of the data supplied by a clinical syndrome with the data supplied by the biological system is used to arrive at the most accurate diagnosis, the same cannot be said of financial economics: the accumulation of statistical results that contradict the Brownian hypothesis used in risk modelling, combined with serious empirical problems in the practical implementation of the Black-Scholes-Merton model, the benchmark theory of mathematical finance founded on the Brownian hypothesis, has failed to change the Brownian (...) |
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This book consists of a dialogue between two interlocutors, Pablo and a student, who discuss a great range of issues in social philosophy and political theory, and in particular, the emergence, working properties and economic effects of institutions. It uses the dialogical form to make philosophy more accessible, but also to show how ideas develop through intellectual interaction. The fact that one of the interlocutors is the "student" in a place in the real world makes the dialogue quasi-fictive in character (...) |
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This essay criticizes the current approach to epistemic democracy. Epistemic democrats are preoccupied with the question of how a society can best exploit a given stock of knowledge. This article argues that the problem-solving capability of a society depends on two factors rather than one. The quality of decision-making depends both on how a democracy is able to make use of its stock of knowledge and on the size of the knowledge stock. Society’s problem-solving capability over time is therefore a (...) |
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One way to show that text interpretation can be treated as a scientific problem is to show that the standards that are currently used in the natural sciences when dealing with problems not involving meaningful material can also be successfully employed in the case of text interpretation. These standards involve intersubjective intelligibility, testability with the use of evidence, rational argumentation, and making methodological decisions aiming at the attainment of truth, accuracy, simplicity and other epistemic values. In the case of text (...) |
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This paper articulates and defends three interconnected claims: first, that the debate on the role of values for science misses a crucial dimension, the institutional one; second, that institutions occupy the intermediate level between scientific activities and values and that they are to be systematically integrated into the analysis; third, that the appraisal of the institutions of science with respect to values should be undertaken within the premises of a comparative approach rather than an ideal approach. Hence, I defend the (...) |
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Scientific progress has many facets and can be conceptualized in different ways, for example in terms of problem-solving, of truthlikeness or of growth of knowledge. The main claim of the paper is that the most important prerequisite of scientific progress is the institutionalization of competition and criticism. An institutional framework appropriately channeling competition and criticism is the crucial factor determining the direction and rate of scientific progress, independently on how one might wish to conceptualize scientific progress itself. The main intention (...) |
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There is a long tradition in philosophy and the social sciences that emphasizes the meaningfulness of human action. This tradition doubts or even negates the possibility of causal explanations of human action precisely on the basis that human actions have meaning. This article provides an argument in favor of methodological naturalism in the social sciences. It grants the main argument of the Interpretivists, that is, that human actions are meaningful, but it shows how a transformation of a "nexus of meaning" (...) |
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This paper written as a dialogue between two interlocutors, Julie and a Student, deals with Understanding and its role in the social sciences. The fictional dialogue takes place in Hannover, Germany, and the interlocutors are exchanging arguments about Verstehen and how it should be conceptualized in the philosophy of the social sciences. A range of different approaches is discussed and a naturalistic strategy emerges as a defensible alternative. |
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In this paper I will discuss the problem of evaluating dynamic properties of the procedural rules that govern science. I will propose a novel framework for evaluating dynamic properties of such rules. This framework is based upon an analogy from New Institutional Economics. I will argue that the concept of ‘adaptive efficiency’, as it has been developed by Douglass North, solves a problem in economics that is analogous to the problem of evaluating dynamic properties of the procedural rules that govern (...) |
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In this paper I will analyze and criticize Linsbichler’s recent proposition to interpret the fundamental axiom of Praxeology as analytic. I will first describe Linsbichler’s problem situation. I will then describe and criticize Linsbichler’s proposed solution to his problem; namely his interpretation of the fundamental axiom as analytic. I will argue that this idea does not fully utilize critical potentials that are available to improve the fundamental axiom. I will propose an alternative interpretation which I call the ‘critical interpretation’ that (...) |
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Institutions generate cooperative benefits that explain why they exist and persist. Therefore, their etiological function is to promote cooperation. The function of a particular institution, such as money or traffic regulations, is to solve one or more cooperation problems. We go on to argue that the teleological function of institutions is to secure values by means of norms. Values can also be used to redesign an institution and to promote social change. We argue, however, that an adequate theory of institutions (...) |
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Understanding Institutions offers a theory that is able to unify the two dominant approaches in the scientific and philosophical literature on institutions. Moreover, using the ‘rules-in-equilibrium’ theory, it tackles several ancient puzzles in the philosophy of social science. |
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The folk conception of money as an object is not a promising starting point to develop general, explanatory metaphysical accounts of the social world. A theory of institutions as rules in equilibrium is more consistent with scientific theories of money, is able to shed light on the folk view, and side-steps some unnecessary puzzles. |
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The article provides an overview of the basic concepts and principles of the theory of institutions as well as of the mechanisms of emergence and evolution of social institutions. It introduces a distinction between formal and informal institutions based on the the criterion of the enforcement agency of institutions. Finally it discusses the problem of path dependence. |
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This paper explores the relationship between federalism and individual liberty. It is shown that a complete treatment of the relationship between federalism and individual liberty should consider two countervailing effects. On the one hand, a federalist structure enhances individual liberty by enlarging the choice set of the citizens. On the other hand, however, a federalist system leads to institutional diversity, a fact that per se leads to higher exit costs, which a citizen must bear if he or she decides to (...) |
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