This commentary focuses on one of the many issues raised in Geary's target article: the importance of gender differences in spatial ability to gender differences in mathematics. I argue that the evidence for the central role of spatial ability in mathematical ability, or in gender differences in it, is tenuous at best.

In his posthumously published lectures, Politics in Commercial Society, István Hont argues that Jean-Jacques Rousseau and Adam Smith should be understood as theorists of commercial society. This article challenges Hont’s interpretation of both thinkers and shows that some of his key claims depend on conflating the terms ‘commercial society’ and ‘commercial sociability’. I argue that, for Smith, commercial society should not be defined in terms of the moral psychology of commercial sociability, before questioning Hont’s Epicurean interpretation of Smith’s theory of (...) sociability. I then turn to Rousseau and outline some of the difficulties involved with classifying him as a theorist of commercial society, the most important of which is that he often appeared to be more deeply opposed to commercial progress than Hont suggests. I conclude by highlighting some of the most salient differences between Rousseau’s and Smith’s views of the politics of eighteenth-century Europe. (shrink)

Bentham and J. S. Mill can be regarded as utilitarian tax-reformers distinguished from political economists who were simply averse to taxation. The purpose of this paper is to elucidate the difference between Bentham's and Mill's tax reform programmes. Bentham proposed the law of escheat and a tax on bankers' and stock dealers' profits, subject to the principle of least sacrifice of enjoyment. He also planned to correct the inequality of the land tax by extending it into a general income tax. (...) Mill proposed an income tax on the basis of the principle of equal sacrifice of enjoyment. He also proposed a progressive inheritance tax and a variable land tax, regarding unearned income as a fit subject for a special tax. Consequently, Mill used Bentham's ideas and tools to take a step towards a more egalitarian programme. (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)

The principle of limited liability is one of the defining characteristics of modern corporate capitalism. It is also, we argue in this article, a powerful structural source of moral hazard. Engaging in a double conceptual genealogy, we investigate how the concepts of moral hazard and limited liability have evolved and diffused over time. We highlight two parallel but unconnected paths of construction, diffusion, moral contestation, and eventual institutionalization. We bring to the fore clear elective affinities between both concepts and their (...) respective evolution. Going one step further, we suggest that both concepts have come to be connected through time. In the context of contemporary capitalism, limited liability has to be understood, we argue, as a powerful structural source of moral hazard. In conclusion, we propose that this structural link between limited liability and moral hazard is an important explanatory factor of the systemic instability of contemporary capitalism and, as a consequence, of a pattern of recurrent crises that are regularly disrupting our economies and societies. (shrink)

Morality and business ethics are topics facing increased attention in modern management, yet they tend to be looked at only in relation to external relationships. However one of the most important contributions to management practice and theory (human relations) was built upon a sociological theory that was totally concerned with morality. That sociological theory was borrowed by Mayo (the father of human relations) without reading the original theory; consequently he missed the real point that the theory made, i.e. a common (...) morality embracing everyone was necessary to maintain order and social cohesion. Such a morality was only possible when we realised our social dimension through continuous contact with each other. Moral man had to be social man; occupational groups were a way of attempting to achieve this. Yet morality is a dimension of group dynamics and management training rarely mentioned, partly through ignorance, partly through a fear of what discussions of morality might lead on to, and partly through a structural blindness to non-operational problems. (shrink)

Democracy is in serious difficulties. Three features of the crisis stand out. First is the dominant culture of disillusionment in democracy, which transpires as the mistrust in constitutionalist institutions and values. Second, political authority, both at domestic and international levels, is largely substituted by the rule of non-transparent and unpredictable social powers. Third, democratic states are deprived of much of their capacity to govern, but they retain a non-negligible capacity to coerce.The article is structured as follows. Section I introduces Karl (...) Polanyi’s concept of embeddedness and juxtaposes it to the theoretical defense of market disembeddedness advanced by the classical political economy. It then points to the challenge that the complexity of the contemporary society poses to the idea of embeddedness and identifies the need for further analytical clarification of the idea. Section II tries to explain why the idea of embeddedness is intuitively suspect. One reason is found in the domi... (shrink)

RÉSUMÉ: La notion de propriété de soi présuppose la définition des droits de propriété sur les ressources externes que le libertarisme de gauche limite habituellement aux ressources naturelles. Or, dans une économie spécialisée, la propriété de soi doitégalement être complétée par une définition des droits de propriété sur le surplus coopératif. S'il est cohérent, pour un libertarien de gauche, de considérer le surplus coopératif comme ressource externe et de le distribuer d'une manière égale, on doit en outre observer qu'une théorie (...) de la justice doit se prononcer sur les questions distributives dans plusieurs contextes. Articuler les différences entre ces contextes nous permet de préciser la relation que le libertarisme de gauche entretient avec d'autres théories de la justice.ABSTRACT: Any substantive notion of self-ownership presupposes well-defined property rights over external resources. Left-libertarians usually limit this category to natural resources. I argue that in a specialized economy, substantive self-ownership equally needs to be complemented by a definition of property rights to the cooperative surplus. The natural way for left-libertarianism to provide such a definition is to view the cooperative surplus as an external resource and to distribute it equally. The second part of the article makes the general point that a complete theory of justice needs to take a stance on distribution in various contexts. Articulating the differences between these contexts allows us to gain a better understanding of how left-libertarianism relates to other theories of justice. (shrink)

What explains and justifies factor shares, that is, the returns that workers and capital owners receive on their contribution to economic production? Arguably, neither economic theory nor theories of distributive justice give a satisfactory answer to this question. One important explanation of this shortcoming, this paper argues, lies in the fact that they fail to take the full measure of the phenomenon of increasing returns from specialisation or, as economist often call it, of total factor productivity. This paper aims to (...) fill this gap by asking what follows for distributive justice from taking this phenomenon seriously. The paper proceeds in four steps. First, it demonstrates in detail how a sophisticated division of labour creates a cooperative surplus. Second, it puts forward a counterfactual experiment to measure this surplus. Third and crucially, the paper argues that justice requires an equal division of this surplus and that this idea turns out to be a surprisingly ecumenical one. The final section defends the equal surplus proposal against two objections, namely the suggestion that an equal distribution of the cooperative surplus is either politically unfeasible or economically inefficient. (shrink)

Teleological thinking about money reasons from what money is for to both how it ought to be used and what forms it should take. One type, found in Aristotle’s argument against usury, takes teleological considerations alone to decisively settle normative questions. Another type, found in Locke’s argument about monetary durability, takes teleological considerations to contribute to the settling of normative questions, but sees them as one consideration among many. This paper endorses the type made by Locke while rejecting the type (...) made by Aristotle, and identifies further teleological tendencies in the work of Adam Smith and other philosophers. (shrink)

Increasing the “truth per dollar” of money spent on science is one legitimate long-run goal of the economics of science. But before this goal can be achieved, we need to increase our knowledge of the successes and failures of past and current reward structures of science. This essay reviews what economists have learned about the behavior of scientists and the reward structure of science. One important use of such knowledge will be to help policy-makers create a reward structure that is (...) more efficient in the future. (shrink)

The notion of the ‘division of physiological labour’ is today an outdated relic in the history of science. This contrasts with the fate of another notion, which was so frequently paired with the division of physiological labour, which is the concept of ‘morphological differentiation.’ This is one of the elementary modal concepts of ontogenesis. In this paper, we intend to target the problems and causes that gradually led biologists to combine these two notions during the 19th century, and to progressively (...) dissociate them, retaining only the concept of differentiation by the early 20th century. We shall adhere to the following: 1. The primitive economic concept of the division of labour is not a descriptive notion denoting a type of organisation of labour, but an etiological one: the idea of a causal relationship between this type of organization and the improvement of the whole. 2. This concept rapidly interested naturalists such as Henri Milne-Edwards, who were keen to find a rational ground for hierarchizing living forms based on anatomical complexity. 3. The validation of this notion in the realms of biology was subject to at least two conditions which were far from being fully satisfied. This did not prevent, however, the initial success of the concept of the division of physiological labour during the second half of the 19th century. 4. Finally, the gradual disqualification, within the Darwinian theoretical context, of the conception of an intrinsic hierarchical rank of organisms, led to a lack of interest in the concept of the physiological division of labour, at least in its non-Darwinian and non-ecological variant (the link between the division of labour within an organism and organic perfection). (shrink)

The appropriate MBA curriculum has been debated for nearly a half century. More recently, critics contend that the emphasis on functional fields in MBA education has incorrectly elevated the importance of shareholder value resulting in unethical behavior. Although some criticism of MBA programs has merit, shareholder wealth maximization should remain the dominant management objective because it is relatively easy to implement and generally consistent with the interests of stakeholders.

Some of the most significant policy responses to cases of fraudulent and questionable conduct by scientists have been to strengthen professionalism among scientists, whether by codes of conduct, integrity boards, or mandatory research integrity training programs. Yet there has been little systematic discussion about what professionalism in scientific research should mean. In this paper I draw on the sociology of the professions and on data comparing codes of conduct in science to those in the professions, in order to examine what (...) precisely the model of professionalism implies for scientific research. I argue that professionalism, more than any other single organizational logic, is appropriate for scientific research, and that codes of conduct for scientists should strengthen statements concerning scientific autonomy and competence, as well as the scientific service ideal. (shrink)

In both biology and psychology, the notion of an individual is indispensable yet puzzling. It has played a variety of roles in diverse contexts, ranging from philosophical problems of personal identity to scientific questions about the immunological mechanisms for telling ‘self’ from ‘non-self.’ There are notorious cases in which the question of individuality is difficult to settle — ant hill, slime mold, or beehive, for instance. Yet the notion of an individual organism, both dependent on and independent of other individuals (...) in specific ways, is crucial to our conception of life itself. It is also crucial to our notion of mentality, and hence to other concepts — moral and social — which must be explicated in terms of individual mentality. (Think, for example, of the importance of the quality and nature of individual consciousness to debates about abortion and euthanasia.). (shrink)

The target article by Baumard et al. uses their previous model of bargaining with outside options to explain fairness and other features of human sociality. This theory implies that fairness judgments are determined by supply and demand but humans often perceive prices (divisions of surplus) in competitive markets to be unfair.

This book series deals with religion and its interface with the state and society in Southeast Asia. It examines the multidimensional facets of politics, public policies and social change in relation to contemporary forms of religions, religious communities, thinking, praxis and ethos. All articles in this Book Series were a direct result of a policy-relevant research collaboration conducted by investigators from the participating countries from 2013–2016. The issues under examination in this Series include: state management of diversity, multicultural policies, religious (...) social activism and state-society relations. All of the analyses in this Book Series are fixed within the context of a rapidly changing society in Southeast Asia. (shrink)

In this article, I define a cultural epistemology as a set of socially reinforced assumptions about how knowledge and truth are produced. Unlike a philosophical epistemology, a cultural epistemology is largely the product of culture and largely invisible. As products of culture, cultural epistemology are relatively unquestioned and, in many cases, philosophically unsophisticated. There are three common types of cultural epistemologies, influenced by who holds power in a given society: an epistemological monarchy, an epistemological oligarchy and an epistemological democracy. A (...) given cultural epistemology subsequently influences the legitimacy of culture and government itself. I argue argue that Americans tend to hold an "epistemological democracy" with two distinct facets: a trust in consensus, linked to living in a democratic republic, and a trust in their own self-interest, linked to market economics and capitalism more generally. These two facets combine, interact, and even oppose each other to legitimize and challenge American culture and its political and economic systems. (shrink)

Biomedical research is increasingly carried out in low- and middle-income countries. International consensus has largely been achieved around the importance of valid consent and protecting research participants from harm. But what are the responsibilities of researchers and funders to share the benefits of their research with research participants and their communities? After setting out the legal, ethical and conceptual frameworks for benefit sharing, this collection analyses seven historical cases to identify the ethical and policy challenges that arise in relation to (...) benefit sharing. A series of recommendations address possible ways forward to achieve justice for research participants in low- and middle-income countries. (shrink)

Fifty Key Sociologists: The Contemporary Theorists covers the life, work, ideas and impact of some of the most important thinkers in this discipline. Concentrating on figures writing predominantly in the second half of the twentieth century, such as Zygmunt Bauman, Pierre Bourdieu, Judith Butler, Michel Foucault and Claude Le;vi-Strauss, each entry includes: · full cross-referencing · a further reading section · biographical data · key works and ideas · critical assessment. Clearly presented in an easy-to-navigate A-Z format, this accessible reference (...) guide is ideal for undergraduate and postgraduate students of sociology, cultural studies and general studies, as well as other readers interested in this fascinating field. (shrink)

This paper offers an overview of consciousness and personal identity in eighteenth-century philosophy. Locke introduces the concept of persons as subjects of consciousness who also simultaneously recognize themselves as such subjects. Hume, however, argues that minds are nothing but bundles of perceptions, lacking intrinsic unity at a time or across time. Yet Hume thinks our emotional responses to one another mean that persons in everyday life are defined by their virtues, vices, bodily qualities, property, riches, and the like. Rousseau also (...) takes persons to be fundamentally determined by our socially-mediated emotional responses to one another, though unlike Hume or Locke, he has little interest in placing this account of persons alongside a larger discussion of the human mind and its operations. Developing this idea further, Kant argues that our moral commitments require that we must take ourselves to be free. The fundamental equality that Rousseau sought in the political order is, for Kant, a requirement that reason puts on all of us. (shrink)

This article presents the most important strands of the philosophical debate about markets. It offers some distinctions between the concept of markets and related concepts, as well as a brief outline of historical positions vis-à-vis markets. The main focus is on presenting the most common arguments for and against markets, and on analyzing the ways in which markets are related to other social institutions. In the concluding section questions about markets are connected to two related themes, methodological questions in economics (...) and the topics of business ethics and corporate social responsibility. (shrink)

The complexity that we observe in nature can often be explained in terms of cooperative behavior. For example, the major transitions of evolution required the emergence of cooperation among the lower-level units of selection, which led to specialization through division-of-labor ultimately resulting in spontaneous order. There are two aspects to address explaining how such cooperation is sustained: how free-riders are prevented from free-riding on the benefits of cooperative tasks, and just as importantly, how those social benefits arise. We review these (...) problems from an economic perspective, and highlight how ideas from economics can help us to better understand how the benefits of social interactions arise, how they are sustained, and how they affect the underlying social dilemmas. (shrink)

The concept of time is examined using the second law of thermodynamics that was recently formulated as an equation of motion. According to the statistical notion of increasing entropy, flows of energy diminish differences between energy densities that form space. The flow of energy is identified with the flow of time. The non-Euclidean energy landscape, i.e. the curved space–time, is in evolution when energy is flowing down along gradients and levelling the density differences. The flows along the steepest descents, i.e. (...) geodesics are obtained from the principle of least action for mechanics, electrodynamics and quantum mechanics. The arrow of time, associated with the expansion of the Universe, identifies with grand dispersal of energy when high-energy densities transform by various mechanisms to lower densities in energy and eventually to ever-diluting electromagnetic radiation. Likewise, time in a quantum system takes an increment forwards in the detection-associated dissipative transformation when the stationary-state system begins to evolve pictured as the wave function collapse. The energy dispersal is understood to underlie causality so that an energy gradient is a cause and the resulting energy flow is an effect. The account on causality by the concepts of physics does not imply determinism; on the contrary, evolution of space–time as a causal chain of events is non-deterministic. (shrink)

Many mechanisms, functions and structures of life have been unraveled. However, the fundamental driving force that propelled chemical evolution and led to life has remained obscure. The second law of thermodynamics, written as an equation of motion, reveals that elemental abiotic matter evolves from the equilibrium via chemical reactions that couple to external energy towards complex biotic non-equilibrium systems. Each time a new mechanism of energy transduction emerges, e.g., by random variation in syntheses, evolution prompts by punctuation and settles to (...) a stasis when the accessed free energy has been consumed. The evolutionary course towards an increasingly larger energy transduction system accumulates a diversity of energy transduction mechanisms, i.e. species. The rate of entropy increase is identified as the fitness criterion among the diverse mechanisms, which places the theory of evolution by natural selection on the fundamental thermodynamic principle with no demarcation line between inanimate and animate. (shrink)

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

Examining the moral sense theories of Francis Hutcheson, David Hume, and Adam Smith from the perspective of the is-ought problem, this essay shows that the moral sense or moral sentiments in those theories alone cannot identify appropriate morals. According to one interpretation, Hume's or Smith's theory is just a description of human nature. In this case, it does not answer the question of how we ought to live. According to another interpretation, it has some normative implications. In this case, it (...) draws normative claims from human nature. Anyway, the sentiments of anger, resentment, vengeance, superiority, sympathy, and benevolence show that drawing norms from human nature is sometimes morally problematic. The changeability of the moral sense and moral sentiments in Hume's and Smith's theories supports this idea. Hutcheson's theory is morally more appropriate because it bases morality on disinterested benevolence. Yet disinterested benevolence is not enough for morality. There are no sentiments the presence of which alone makes any action moral. (shrink)

This chapter considers the encounter of skepticism with the Kantian and post-Kantian philosophical enterprise and focuses on the intriguing feature whereby it is assimilated into this enterprise. In this period, skepticism becomes interchangeable with its other, which helps understand the proliferation of many kinds of views under its name and which forms the background for transforming skepticism into an anonymous, routine practice of raising objections and counter-objections to one’s own view. German philosophers of this era counterpose skepticism to dogmatism and (...) criticism, ancient to modern skepticism, and, importantly, conceptualize the transitions from one form to another, which forms the conceptual matrix in which new disciplinary forms, such as psychology, anthropology, and historicism contend for cultural-intellectual standing beside philosophy. I present this assimilationist trajectory by reviewing three well-known moments of this encounter of skepticism and idealism: (1) Kant’s idealization of skepticism as a floating position amidst various philosophical positions through the dialectic, polemics, systematics, and history of pure reason; (2) Fichte’s schematic conception of skepticism as a dispute of systems in the early Wissenschaftslehre following his review of the skeptic G. E. Schulze’s attacks on Critical philosophy; (3) Hegel’s historicizing conception of skepticism in the context of differences between subjective idealism and speculative thought and his early Jena review of another work by the same skeptic Schulze. (shrink)

Libertarianism holds that agents initially fully own themselves and have moral powers to acquire property rights in external things under certain conditions. It is normally advocated as a theory of justice in the sense of the duties that we owe each other. So understood, it is silent about any impersonal duties (i.e., duties owed to no one) that we may have.

This article provides an overview of the field of business ethics.

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.

Introduction Conceptual Distinctions: Work, Labor, Employment, Leisure The Value of Work and the ‘Anti-Work’ Critique Work, Meaning, and Dignity Work and Distributive Justice Work and Contributive Justice Work and Productive Justice Work and its Future BIBLIOGRAPHY .

Pope Francis argues for a shift to a new economic model that is in the service of the human life and is "more attentive to ethical principles" (LS 189). He does not endorse a specific model except that he provides conditions, principles, and frameworks by which its ethos must be grounded against. As part of his pastoral approach and his vision of a synodal Church, he invites everyone to participate and contribute to this discussion because "not all discussions of doctrinal, (...) moral or pastoral issues need to be settled by interventions of the magisterium" (AL 3). It is within this papal invitation of discoursing this new economic model where this paper aims to contribute particularly on the centrality of the anthropological criterion. The first section explores the meaning of his articulation on economics; situating it within the economic discourse of Pope John Paul II and Pope Benedict XVI. The second section focuses on the anthropological criterion as problematized by the identification of the homo economicus as self-interested. The third section draws a theoretical framework from substantivist economics in forwarding the desired economic ethos while the fourth section provides praxeological inputs and argues that homo economicus can be prosocial when the culture that is embedded in a particular economic model is put together to nurture such ethos. (shrink)

This article is in praise of the labor of reading profound and rich texts, in this case the essay on 'estranged labor' by Karl Marx. Comparing in detail what Marx wrote on estranged labor with current social practices of learning and education leads us to comprehensive ideas about learning - including the social practices of alienated learning. We then emphasize the importance of distribution in the institutionalized production of alienated learning. And we end this article with critical reflections on the (...) importance of alienation for the relationship between teaching and learning in the social practice of scholars. (shrink)

This paper discusses Rawls’s thesis that the social basis of self-respect is one of the primarysocial goods. While the central element of the social basis consists in the attitudes of others(e.g. respect or esteem) the social basis may include also possession of various goods. Further,one may distinguish, following Honneth, universalistic basic respect from differential esteem andfrom loving care. This paper focuses on esteem, and further distinguishes three importantvarieties thereof (anti-stigmatization; contributions to societal goods, projects of self-realization),which all differ from recognition (...) of cultural identity. The normative implications will differ in these different contexts. (shrink)

Algunos autores han sostenido que es posible que en el pasaje de la mano invisible, en La teoría de los sentimientos morales, Smith esté contestando a Rousseau. Esta hipótesis se basa en una fraseología similar que usan tanto Smith como Rousseau en el Discurso sobre el origen de la desigualdad. En esta nota se mostrará que es posible realizar una distinción importante con relación al período histórico que Smith está analizando en el pasaje de la mano invisible de TSM IV: (...) 10 y el que Rousseau está analizando en el Discurso sobre el origen de la desigualdad, a pesar de la fraseología similar con relación a las rudas selvas de la naturaleza. Some authors have contended that it is possible that Smith is answering Rousseau in The Theory of Moral Sentiments. This hypothesis is based on a similar phraseology used both by Smith and by Rousseau in the Discourse on the Origin of Inequality. In this note, a clear distinction will be made. In the aforementioned works, Rousseau and Smith refer to different periods of time, in spite of the similar phraseology used in relation to "the rude forests of nature". (shrink)

Trust can be thought of as a three place relation: A trusts B to do X. Trustworthiness has two components: competence (does the trustee have the relevant skills, knowledge and abilities to do X?) and willingness (is the trustee intending or aiming to do X?). This chapter is about the willingness component, and the different motivations that a trustee may have for fulfilling trust. The standard assumption in economics is that agents are self-regarding, maximizing their own consumption of goods and (...) services. This is too restrictive. In particular, people may be concerned with the outcomes of others, and they may be concerned to follow ethical principles. I distinguish weak trustworthiness, which places no restrictions on B’s motivation for doing X, from strong trustworthiness, where the behaviour must have a particular non-selfish motivation, in finance the fiduciary commitment to promote the interests of the truster. I discuss why strong trustworthiness may be more efficient and also normatively preferable to weak. In finance, there is asymmetric information between buyer and seller, which creates a need for trustworthy assessment of products. It also creates an ambiguity about whether the relationship is one of buyer and seller, governed by caveat emptor, or a fiduciary relationship of advisor and client. This means that there are two possible reasons why trust may be breached: because the trustee didn’t realise that the truster framed the relationship as a fiduciary one, or because the trustee did realise but actively sought to take advantage of the trust. Correspondingly, there are two possible types of agent: normal people who are not always self-regarding and who are trust responsive (if they believe that they are being trusted then they are likely to fulfill that trust), and knaves, after Hume’s character who is always motivated by his own private interest. We can increase the trustworthiness of normal people by getting them to re-frame the situation as one of trust, so they will be strongly trustworthy (i.e. change of institutional culture), and by providing non-monetary incentives (the correct choice of incentive will depend on exactly what their non-selfish motivation is). Knaves need sanctions, which can make them weakly trustworthy. However, this is a delicate balance because sanctions can crowd out normative frames. We can also increase the trustworthiness of financiers by making finance less attractive to knaves; changing the mix of types in finance could help support the necessary cultural change. (shrink)

While it is well known that Carl Menger and Stanley Jevons adopted very different views on the role of mathematics in economics1, it is usually admitted that their respective views on the theory of value were relatively close. Indeed, both strongly objected to the classical theory of value which is based on objective costs of production, whether these be labour or capital costs. Moreover, each elaborated, roughly at the same time, an alternative economic theory based on a comparison between the (...) various degrees to which needs are fulfilled thanks to goods whose effect tends progressively to diminish with the fulfilment of these needs. Furthermore, each managed to ground a theory of economic exchange on the fact that people are rational enough to choose which of two goods will provide them with the greatest benefit. In the face of such similarities, it is tempting to conclude that, while using very different terminologies, these two economists developed quite similar analyses whose key element is a subjective theory of value which was opposed to the objective theory of the classical economists. It is true that specialists of Austrian economics have often underscored the originality of Menger's position and its differences with those of the two other fathers of the so-called marginalist revolution, but while they have seriously questioned the.. (shrink)

Adam Smith's metaphor of the "invisible hand" and its analogue in classical physics are investigated in detail. Smith's analogue was the mechanics of the solar system. What makes the analogy fail are not the idealisations in the caricature-like model of the rational economic man . The main problem rather is that the metaphor does not employ the correct analogue, which belongs to thermodynamics and statistics. In the simplest macro-economic model, the business cycle has the same formal structure as the heat (...) flow between two heat reservoirs and a business cycle of growing efficiency works like a refrigerator: it pumps money from the poor to the rich. More complicated models do not give a friendlier image. Due to technological push, an economic system behaves like a thermodynamic system far from the equilibrium, showing chaotic behaviour and developing into unpredictable states. (shrink)