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.

Ronald Dworkin's theory of equality of resources draws heavily on conceptual tools developed in economic theory. His criterion for a just distribution of resources is closely connected with two economic ideas: first, the idea that a distribution of resources reflects a concern for equality if it is envy-free; second, the idea that such an envy-free distribution of resources is attainable as a competitive equilibrium from equal split. The objective of this paper is to show that the criterion of equality of (...) resources has been misinterpreted by normative economics, largely due to Dworkin's own lack of precision, and that it needs to be reformulated in order to be intelligible. The dimensions along which the reformulation is needed concern the nature of the preferences used in what Dworkin calls the ‘envy test’ and the nature of the envy test itself. (shrink)

Is a government required or permitted to redistribute the gains and losses that differences in biological endowments generate? In particular, does the fact that individuals possess different biological endowments lead to unfair advantages within a market economy? These are questions on which some people are apt to have strong intuitions and ready arguments. Egalitarians may say yes and argue that as unearned, undeserved advantages and disadvantages, biological endowments are never fair, and that the market simply exacerbates these inequities. Libertarians may (...) say no, holding that the possession of such endowments deprives no one of an entitlement and that any system but a market would deprive agents of the rights to their endowments. Biological endowments may well lead to advantages or disadvantages on their view, but not to unfair ones.I do not have strong intuitions about answers to these questions, in part because I believe that they are questions of great difficulty. To begin, alternative answers rest on substantial assumptions in moral philosophy that seem insufficiently grounded. Moreover, the questions involve several problematical assumptions about the nature of biological endowments. Finally, I find the questions to be academic, in the pejorative sense of this term. For aside from a number of highly debilitating endowments, the overall moral significance of differences between people seems so small, so I interdependent and so hard to measure, that these differences really will 1 not enter into practical redistributive calculations, even if it is theoretically i permissible that they do so.Before turning to a detailed discussion of biological endowments and their moral significance, I sketch my doubts about the fundamental moral theories that dictate either the impermissibility or the obligation to compensate for different biological endowments. (shrink)

How valuable is the market mechanism for practical morality? What is its moral standing? We can scarcely doubt that as individuals we do value tremendously the opportunity of using markets. Indeed, without access to markets most of us would perish, since we don't typically produce the things that we need to survive. If we could somehow survive without using markets at all, our quality of life would be rather abysmal. It is natural to feel that an institution that is so (...) crucial to our well-being must be valuable. And since moral evaluation can hardly be indifferent to our interests and their fulfillment, it might appear that there is nothing much to discuss here. The market's moral standing “has to be” high. (shrink)