Idealization is ubiquitous in human cognition, and so is the inclination to be puzzled by it: what to make of ideal gas, infinitely large populations, homo economicus, perfectly just society, known to violate matters of fact? This is apparent in social science theorizing (from J. H. von Thünen, J. S. Mill, and Max Weber to Milton Friedman and Thomas Schelling), recent philosophy of science analyzing scientific modeling, and the debate over ideal and non-ideal theory in political philosophy (since John Rawls). (...) I will offer a set of concepts and principles to improve transparency about the precise contents of idealizations (in terms of negligibility, applicability, tractability, and early-step status) and their distinct functions (such as contributing to minimal modeling, benchmark modeling, and how-possibly modeling). (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)

This paper uses Michel Foucault’s lectures on biopolitics as a starting point for thinking historically about neoliberalism. Foucault’s lectures offer a rich and detailed account of the emergence of neoliberalism, but this account is far from complete. This paper addresses some of the blind-spots in Foucault’s lectures by focusing on the space between the decline of classical liberalism at the end of the 19th century and the subsequent attempt to develop a ‘positive’ or ‘ordo’ liberalism in post-war Germany. The primary (...) concern of this paper is to chart the emergence of a new or neo- liberalism in the writings of Ludwig von Mises and Friedrich von Hayek through the 1920s and 1930s. These writings, which are barely considered by Foucault, are important as they redefine the liberal project against the political economy of the late 19th century and, in particular, against the threat of socialism. In conclusion, it is argued that by returning to the work of Mises and Hayek it is possible to develop a critical sociology of neoliberalism, one that not only engages with the writings of these two thinkers but which also exposes the fracture lines that exist within the neoliberal project, and reconsiders the political positions that neoliberalism initially sought to reject. (shrink)

In this paper I argue that it is finally time to move beyond the Nagelian framework and to break new ground in thinking about epistemic reduction in biology. I will do so, not by simply repeating all the old objections that have been raised against Ernest Nagel’s classical model of theory reduction. Rather, I grant that a proponent of Nagel’s approach can handle several of these problems but that, nevertheless, Nagel’s general way of thinking about epistemic reduction in terms of (...) theories and their logical relations is entirely inadequate with respect to what is going on in actual biological research practice. (shrink)

In mill the principle of utility does not ascribe rightness or wrongness to anything. It governs not just morality but the whole art of life. It says that happiness is the only thing desirable as an end. But the meaning of this formulation is problematic, Since mill's theory of practical reason conceives this desirability as an end as generating reasons for action for all agents in a way implying impartiality between self and others, Whereas in the ordinary sense it does (...) not. This interpretation is supported by detailed textual analysis. (shrink)

Most papers in theoretical economics contain thought experiments. They take the form of more informal bits of reasoning that precede the presentation of the formal, mathematical models these papers are known for. These thought experiments differ from the formal models in various ways. In particular, they do not invoke the same idealized assumptions about the rationality, knowledge, and preferences of agents. The presence of thought experiments in papers that present formal models, and the fact that they differ from the formal (...) models in this way, is often ignored in debates on what, if anything, we can learn from formal models in theoretical economics. I show that paying due attention to thought experiments in theoretical economics has serious implications for this debate. Differences between thought experiments and formal models are especially problematic for Robert Sugden’s “credible worlds” account. (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)

There is a common view that the utilitarian theory of John Stuart Mill is morally realist and involves a strong kind of practical obligation. This article argues for two negative theses and a positive thesis. The negative theses are that Mill is not a moral realist and that he does not believe in certain kinds of obligations, those involving external reasons and those I callrobustobligations, obligations with a particular, strong kind of practical authority. The positive thesis is that Mill's metaethical (...) position can be interpreted as a Humean constructivist view, a metaethical view that is constructivist about value and entails the existence of practical reasons, but not external reasons or robust obligations. I argue that a Humean constructivist reading of Mill's theory is reasonable, and strengthens Mill's argument from desire for the value of happiness, an important but notoriously weak aspect of his theory. (shrink)

The Action Theory of Exchanges is based on three main assumptions: i) an exchange is motivated by people having convergent preferences, ii) people exchange actions, and iii) offers and acceptances are crucial parts of an exchange and they bring about rights and obligations. The main aim of this paper is to discuss three aspects of this theory to better understand its ontological implications and, possibly, improve it. I first examine the expression “transferring the ownership” by showing an ontological issue behind (...) it; after that, I propose an interpretation that might solve this issue. I then show that convergent preferences are not enough to motivate an exchange; accordingly, one has to introduce two more preferences possessed by the agents. I finally propose a characterization of buying and selling (and buyer and seller) which, in addition to being compatible with the Action Theory of Exchanges, has the advantage of accounting for both monetary and non-monetary exchanges. (shrink)

This article responds to recent criticism regarding the application of consequentialism and rational choice theory in the social and moral sciences. It clarifies the limited scope of the presented criticism and its overly simplistic view of social scientific inquiry that, together, lead to the presentation of an argument that claims more than it warrants. Moreover, I argue that the criticism overlooks one of the most important uses of instrumentalism in moral theory that may be considered the most challenging case for (...) the application of rational choice theory. (shrink)

In Adam Smith’s Inquiry into the Nature and Causes of the Wealth of Nations the term ‘rational’ occurs only twice. Neither of these uses assigns the property of rationality either to human beings or to economic agents. Despite that, Smith is widely recognised as the founder of modern mainstream economics, a science which is defined by the assumption of the rationality of an economic agent. This paper aims to locate and discuss the notion of rationality which is implied by Smith’s (...) work. To achieve that a double-track approach is taken. First, the current paper reconstructs Smith’s general view on human nature which was presented mainly in his earlier book The Theory of Moral Sentiments. This is followed by a discussion of Smith’s theses on selected mechanisms which drive the economy as presented in The Wealth of Nations. (shrink)

The usefulness of models that describe the world lies in their simplicity relative to what they model. But simplification entails inaccuracy, so models should be treated as provisional. Nancy Cartwright's account of science as a modeling exercise, in which fundamental laws hold true only in theory—not in reality, given the complexities of the real world—suggests that Rational Choice Theory (RCT) should not be rejected on the traditional basis of its lack of realism: that, after all, is to be expected of (...) any simulacrum model. But when RCT has been extended to domains, such as politics, in which there is no necessary reason to expect systemic pressures against people who depart too far from the model, RCT is a simulacrum without any particular claim to expressing underlying causal laws. This cautions against the tendency to rest content with models and to treat their assumptions as if they were true. (shrink)

Mostrando le analogie tra il modello di Homo oeconomicus e quello che chiameremo Animal oeconomicum, nonché la genealogia del ragionamento “economico” applicato al comportamento animale, vengono messi in risalto gli impliciti e le debolezze di alcuni ragionamenti etologici frequenti; revisioni e critiche che hanno ridimensionato il concetto di Homo oeconomicus sono applicabili anche all’interpretazione raziocinante e calcolatrice del comportamento animale.

Mill (1872, 1874) is an early proponent of the thesis that economics has a special domain in which it can operate relatively independently of findings from other sciences. Contra Mill, I argue that this so-called separateness-thesis is best defendedunder an externalist interpretation of Rational Choice Theory (RCT). Mill’s defence is consistent with an internalist interpretation of RCT. Internalism holds that RCT depicts psychological mechanisms operating in economic agents. I argue that such a defence fails to establish separateness, because it makes (...) economics highly depended on psychological findings. However, externalism understands RCT as an adequate description of how agents react to incentives if certain environmental structures are present. Under this interpretation, we can defend separateness by investigating which features of an environmental structure will lead agents to behave in accordance with RCT. Thereby, we can derive indicators that enable us to demarcate a separate domain for economics. (shrink)

Since the beginning of business research and teaching, the basic assumptions of the discipline have been intensely debated. One of these basic assumptions concerns the behavioral aspects of human beings, which are traditionally represented in the construct of homo economicus. These assumptions have been increasingly challenged in light of findings from social, ethnological, psychological, and ethical research. Some publications from an integrative perspective have suggested that homo economicus embodies to a high degree dark character traits, particularly related to the construct (...) of psychopathy, representing individuals who are extremely self-centered and ruthless, without feelings of remorse or compassion. While a growing body of research notes such a similarity on a more or less anecdotal basis, this article aims to explore this connection from a more rigorous perspective, bridging insights from psychological, economic, and business research to better understand the potentially dark traits of homo economicus. The analysis shows that homo economicus is not simply some kind of psychopath, but specifically a so-called subclinical or Factor 1 psychopath, who is also referred to as a “corporate psychopath” in business research. With such an analysis, the paper adds an additional perspective and a deeper psychological level of understanding as to why homo economicus is often controversially debated. Based on these insights, several implications for academic research and teaching are discussed and reflected upon in light of an ethics of virtue and care. (shrink)

The paper addresses the ‘rational choice only’ reconstruction, characterization, and interpretation of classical and neoclassical economics. It argues that such a reconstruction is inaccurate failing to do justice to the dual theoretical character of classical/neoclassical economics. The paper instead proposes and shows that the latter involves not only elements of ‘rational choice theory’ but also those of an alternative conception. It identifies various and important ideas, observations, and implications of irrational choice and action within classical/neoclassical economics. One class of such (...) ingredients involves forms, expressions, and cases—i.e. specification and classification—of irrational choices in the economy. Another class comprises the social and other factors—i.e. economic sociology or social economics—of irrational choices in the economy. The paper’s intended contribution is to help identify and clarify the extant sources and alternatives of rational choice theory in conventional economics.... (shrink)

The present article problematizes current dominating approaches to method and theory in the study of religion by pointing to their inapplicability to theorists working outside secular worldviews. The first section of this article introduces decolonialist narratives by touching on important topics which are subsumed within larger discussions, such as secularism, positionality, and others. This is done by putting René Guénon (1886–1951) in conversation with other theorists, the foremost of whom is Bruce Lincoln. Section two introduces Guénon using Wael Hallaq's categorisation (...) of him as a subversive author, and sections three and four elaborate on his subversion through touching on two key theories. The first relates to problematizations of the term ‘religion’ itself along with a treatment of Guénon's actual theory of religion. The second is Guénon'smetaphysicalmethod, which, contrasted against the historical, opens new avenues for our study of the past in manners unrestricted to materialism alone, expanding thereby the academic frameworks with which we come to the table in the academic study of religion. (shrink)

The culture-economy dialectic (CED) – the opposition of the concepts and phenomena of culture and economy – is one of the most important ideas in the modern history of ideas. Both disciplinary boundaries and much theoretical thought in social science are strongly influenced or even determined by the CED. For that reason, a thorough analysis and evaluation of the CED is needed to improve understanding of the history of ideas in social science and the currently fashionable research on the cultural (...) influences on economic differences between countries and regions. This thesis is an attempt to do just that. The concepts of “culture” and “economy” (and related concepts) and the (assumed) relations therebetween are compared and analyzed. Empirical results from earlier studies are summarized and some new test are presented. These new tests are partly based on a measurement of Dutch regional culture. However, most theories of the CED are (nearly) impossible to verify (empirically). There appears to be some influence of wealth on specific cultural phenomena (such as individualism and post-materialism), but the often assumed influence of culture on entrepreneurship and economic growth remains unconfirmed. Moreover, from an analysis of the theories themselves, it appears that most of these cannot be falsified and are, therefore, hardly 'scientific'. Many of the theories of the CED and, in fact, many theories of social science in general are of a conceptual rather than a causal nature. These theories cannot be falsified (or verified) by empirical means alone, but must be studied by means of conceptual analysis. In the final conclusions, this thesis, therefore, argues for conceptual analysis in – and a more anarchist approach to – social science. (shrink)

Rooted in theory of planned behavior (TPB) supplemented with self-determination theory (SDT), this study explores determinants of willingness to receive and provide resources in Europe's non-remunerated and remunerated collaborative consumption (CC). The exploration was conducted within a single research model by assessing the role of (a) TPB constructs reflecting attitude towards participation in CC, perceived social pressure to engage, and perceived level of difficulty that engagement requires and (b) SDT constructs of environmental, social, and economic motives for participation. The data (...) were collected through an online questionnaire, and the structural relationships were analyzed using structural equation modeling. Willingness to consume in non-remunerated and remunerated CC was positively directly influenced by social pressure to engage in CC and participation being perceived as pleasant, negatively by the level of difficulty that engagement requires, as well as positively indirectly influenced by environmental concern and sociability. Additionally, environmental concern had positive direct effect on willingness to consume only in the remunerated context. Willingness to provide in non-remunerated CC was positively directly influenced by perceiving participation as pleasant and indirectly by environmental concern and sociability. Resource provision in remunerated CC was not explained by any of the determinants. (shrink)

Many epistemic anomalies of the neoclassical research programme originate from its ontologically reductionist meta-axioms, which predicate how economic macro-systems are constituted from their micr...

Salim Rashid purports to have established some facts about Adam Smith's scholarship, significant among which are Smith's plagiarism, the poor quality of Smith's arguments or ideas compared with those of his predecessors or contemporaries, and Smith's inconsistent arguments regarding laissez faire. Alas, Rashid's case is faulty, as well as often misleading and vexatious. This comment is an attempt to draw the requisite evidence from Rashid, if he indeed has such evidence, to back up his case, and to advance the scholarship (...) on Smith in general. (shrink)

“Das Adam Smith Problem” is the name given by eighteenth-century German scholars to the question of how to reconcile the role of self-interest in the Wealth of Nations with Smith’s advocacy of sympathy in Theory of Moral Sentiments. As the discipline of economics developed, it focused on the interaction of selfish agents, pursuing their private interests. However, behavioral economists have rediscovered the existence and importance of multiple motivations, and a new Das Adam Smith Problem has arisen, of how to accommodate (...) self-regarding and pro-social motivations in a single system. This question is particularly important because of evidence of motivation crowding, where paying people can backfire, with payments achieving the opposite effects of those intended. Psychologists have proposed a mechanism for the crowding out of “intrinsic motivations” for doing a task, when payment is used to incentivize effort. However, they argue that pro-social motivations are different from these intrinsic motivations, implying that crowding out of pro-social motivations requires a different mechanism. In this essay I present an answer to the new Das Adam Smith problem, proposing a mechanism that can underpin the crowding out of both pro-social and intrinsic motivations, whereby motivations are prompted by frames and motivation crowding is underpinned by the crowding out of frames. I explore some of the implications of this mechanism for research and policy. (shrink)

Resumen La tesis principal del artículo es que la estrategia estándar de modelización económica basada en la construcción de sistemas cerrados y de agentes optimizadores es ineficaz para el tratamiento de la incertidumbre. Puesto que bajo incertidumbre los agentes económicos desconocen cuál es el resultado final de un curso de acción, las decisiones de estos no deberían ser representadas por el cálculo de optimización bajo restricciones. La construcción de sistemas axiomáticos deductivos que conducen a la derivación de un único resultado (...) también será puesta en tela de juicio, y se propondrá su reemplazo por una lógica de investigación basada en simulaciones.The purpose of this essay is to show that the standard approach of economic modelling is ineffective for the issue of uncertainty. Since under uncertainty economic agents do not know the final outcome of a course of action, their decisions should not be represented by the process of constrained optimization. The construction of axiomatic systems that lead to the derivation of a single result is also put into question; its replacement by a simulation-based approach is proposed. (shrink)

I argue in this text that the economic mind is a culturally hegemonic, naturalistic interpretation of the behavior produced by the revolutionary nature of the economic and technical developments of the nineteenth and early twentieth centuries. Despite persistent criticism, people fulfilled the predictions of the economic model of a human being for so long that they committed an attribution error and took it to be the adequate vision of human nature. Neoclassical economic theory played a significant, even if involuntary, role (...) in the spread of this illusion. I also claim that the concept of economic mind—as the dominant interpretation of human nature—currently functions as a self-fulfilling prophecy, reproducing behaviors that would have a chance to change (refuting the theory developed on their basis), were it not for the popularity of this concept as commonsensical definition of human nature. (shrink)

Marx: Later Political Writings brings together the most important texts in political philosophy written by Marx after 1848. All are in new translations, and the collection is introduced by the leading Marx scholar Terrell Carver. Unlike other collections, the works are presented complete, according to their earliest edition or manuscript text, and include the Manifesto of the Communist Party, and the little-known Notes on Adolph Wagner. These texts allow the close contact between Marx and contemporary politics to emerge in a (...) clearer light. (shrink)

The Lucas critique has been – and continues to be – the cornerstone of modern macroeconomic modelling. In this note we apply the Lucas critique to macroeconomic modelling using deep rational expectations. In conclusion, we point out that Lucas's critique reveals a fundamental flaw in Lucas's own, popular 'solution', i.e., the so-called forward-looking rational expectations models. Heeding Lucas's call for model-consistent policy advice eventually requires an ontological shift in economics – which throws the door wide open to an exciting, hardly-explored (...) field of economic research. (shrink)

Disentangling Privacy and Intimacy: Intimate Citizenship, Private Boundaries and Public Transgressions Recent theorisations of transformations of intimacy—like Ken Plummer's (2003) Intimate Citizenship project—concentrate on social and cultural transformations that erode the containment of intimacy within the private sphere. They have less to say about the character of and oppositions to that erosion, and specifically how far the idea of the private stands in opposition to intimacy transgressing into the public. In this essay, the private is explored through its constitutive features—liberal (...) codifications of rights, liberty and property, medico-moral discourses and conservative values and legal and political regulation—to give a more political and critical reading. This reading suggests that an explicit disentangling of the private and the intimate is necessary if tendencies toward public and emancipated intimacies are to become meaningful transformations, and this involves a dissembling of and critical engagement with the powerful historically entrenched idea of privacy in western societies. (shrink)

The paper surveys selected alternative conceptions of rationality in contemporary and (especially) traditional economics and sociology. While the status of rationality as one of the master concepts, subjects and objectives of social science and philosophy has been further promoted in contemporary economics and sociology, questions often arise among economists and sociologists themselves as to its meaning or definition. As an attempt to help address this issue, the paper selects and examines a (limited) number of pertinent definitions and conceptions of rationality (...) from both economic and sociological theory. By virtue of its coverage of economics and sociology, this study is thoroughly interdisciplinary and contributes toward filling in a void in the current literature in which such studies are relatively rare. (shrink)

In the final sentence of the "Preliminary Remarks" to the Principles of Political Economy, John Stuart Mill declaresThe laws of Production and Distribution, and some of the practical consequences deducible from them, are the subject of the following treatise. It is almost two hundred pages before Mill asserts thatThe laws and conditions of the Production of wealth partake of the character of physical truths. There is nothing optional or arbitrary in them. … It is not so with the Distribution of (...) wealth. That is a matter of human institution solely. (shrink)

The thesis is a philosophical analysis of the consumption based capital asset pricing model, investigating in particular its epistemological and methodological foundations. Financial markets are integral parts of advanced and developing economies. They matter because they channel unspent household income into banks’ savings accounts and assets such as bonds and stocks. Financial economists have traditionally taken interest in the pricing mechanism that underlies this capital allocation. The consumption based capital asset pricing model is a prominent effort to describe, explain and (...) predict such prices. It tells a story of investors’ trade-off between consumption now and later and which portfolio of assets to hold. The CCAPM based narrative intuitively makes sense, and the chosen methodology involving theoretical assumption, mathematical models and empirical tests follows the professions’ standards of good scientific practise. But does CCAPM’s research programme provide knowledge for use? My thesis seeks to answer this question in a novel way. Instead of embarking on yet another asset pricing research project, I let Philosophy of Science inform my analysis. Following a “primer” introducing essential CCAPM topics and notations, I discuss, in turn, its theoretical foundation, mathematical model, and empirical test results from a philosophy of science perspective. I find that a few fundamental principles and several auxiliary assumptions combine to develop a simplified, partial and idealized theory of investors, financial markets and assets. The model reflects and represents this theory but also makes narrow claims that are distances away from the real situations they target. Unsurprisingly, ideal model assertions fail standard statistical tests of significance. I conclude that mathematical deductive modelling rooted in orthodox, a priori based fundamental principles create ideal and fictional settings that limit their scope and portability. The development of even more granular models within this orthodox paradigm that searches for “event regularities” will not render the desired knowledge for use. The real situations are possibly too complex to be captured in simplified assumptions, ideal theories and mathematical structures. Novel methodological and ontological approaches to asset pricing are in demand. Hence, claims about tendencies in the real data might replace the current focus on point-forecasts. (shrink)