The global economic crisis makes closer collaboration between economics and other social sciences even more urgent. One major cause of divergence has been the attitudes of the parties towards the ‘market’. Yet, the market economy, in all its diversity, is one of the immutable facts of modern life. Understanding the causes of its survival will improve the dialogue. Another interesting puzzle is the lack of credible alternatives to it despite the depth of the crisis. The experience of the economists in (...) constructing models of society based on the behaviour of individuals composing it can be valuable for other social sciences. We apply the framework developed by ‘institutional economics’ to gain insights into the relations between Islam, capitalism and democracy. The article finishes with some observations on Turkey and draws lessons for other Muslim societies. (shrink)

The Stern Review on The Economics of Climate Change is a highly influential welfare analysis of climate policy measures which has been published in 2006. This paper identifies and systematically assesses the long-term socioeconomic and climatic predictions the Stern Review relies on, and reflects them philosophically. Being a cost-benefit analysis, the Stern Review has to predict the benefits of climate mitigation policies, i.e.the damaging consequences of climate change which might be avoided, as well as the costs of implementing such policies. (...) While distinguishing deterministic, probabilistic, and possibilisitic forecasts, this paper finds that the Review's major predictions severly suffer from a lack of robustness. It argues, moreover, that the use of subjective probabilities as well as the fact/value entanglement pose additional problems. Given our ignorance, this assessment raises finally the question how detailed an analysis of climate policy decisions should reasonably be at all, and whether the argument for acting against climate change is maybe very simple. (shrink)

continues to receive many reviews. Judging by recent reviews, this is a very controversial book. The question considered here is, how can one fairly review a controversial book—particularly when the book is widely popular and, for a history of economic thought book, a best seller? This essay uses Mirowski’s book as a case study to propose one answer for this question. In the process, it will examine how others seem to have answered this question. Key Words: methodology • reviews • (...) Mirowski • Machine Dreams. (shrink)

One way of responding to the question of what PPE is involves mobilizing the tools that PPE involves. That is the exercise attempted in this article. The object is to use PPE as a method to analyze PPE as a subject matter. PPE is, whatever else, an interdisciplinary enterprise; so the point of departure involves analyzing the role and properties of disciplines within the institutional organization of enquiry. The basic idea is that enquiry is governed by a ‘division of epistemic (...) labour’ in Adam Smith’s sense, and that that division of labour depends for its working on institutions for the reliable certification of claims. Disciplines are such ‘institutions’. As such, they are indispensable. But they impose centripetal forces within the organization of enquiry that stand against interdisciplinary work. Understanding these forces offers some hope of securing an ‘optimal’ compromise between the benefits and costs that disciplines entail. Examples are offered from each of the disciplines involved in PPE separately, and some observations are offered about the architecture of the three disciplines’ interrelationships. (shrink)

(No abstract is available for this citation).

Focusing on the work of Friedrich von Hayek and Vernon Smith, we discuss some conceptual links between Austrian economics and recent work in behavioral game theory and experimental economics. After a brief survey of the main methodological aspects of Austrian and experimental economics, we suggest that common views on subjectivism, individualism, and the role of qualitative explanations and predictions in social science may favour a fruitful interaction between these two research programs.

Altruism is a deep and complex phenomenon that is analysed by scholars of various disciplines, including psychology, philosophy, biology, evolutionary anthropology and experimental economics. Much confusion arises in current literature because the term altruism covers variable concepts and processes across disciplines. Here we investigate the sense given to altruism when used in different fields and argumentative contexts. We argue that four distinct but related concepts need to be distinguished: (a) psychological altruism , the genuine motivation to improve others’ interests and (...) welfare; (b) reproductive altruism , which involves increasing others’ chances of survival and reproduction at the actor’s expense; (c) behavioural altruism , which involves bearing some cost in the interest of others; and (d) preference altruism , which is a preference for others’ interests. We show how this conceptual clarification permits the identification of overstated claims that stem from an imprecise use of terminology. Distinguishing these four types of altruism will help to solve rhetorical conflicts that currently undermine the interdisciplinary debate about human altruism. (shrink)

This special issue collects papers presented at the EIPE Conference ?Economics Made Fun in the Face of the Economic Crisis? held on 10?11 December 2010 in Rotterdam. The central theme of the conference was the tension between the bold claim in Economics Made Fun books that economics can explain the hidden side of everything and the apparent failure of economics to foresee, let alone prevent the financial crisis. Economics is understandably unpopular as a subject because of the financial crisis, and (...) yet the popular appetite for economics seems only to have increased in recent years. In this Introduction to the special issue I want to explore some reasons that might explain this paradox. (shrink)

This paper compares two aspects of the use of ?fun? within the economics profession. It analyzes the way in which a recently emerged genre of economics-made-fun uses fun and surprising insights to reach new audiences. And it also analyzes the way in which humor is used within and from outside the economics profession to criticize certain practices and characteristics of economists. It argues that the economics-made-fun genre, ?Freakonomics? being the prime example, not only redefines the domain of economics, as is (...) widely acknowledged, but also changes the identity of economists. In a similar way, humor is used by both insiders and outsiders to (re)define the appropriate identity and domain of economists. It draws on recent work in the history of science which distinguishes between various professional identities of scientists, such as the quirky genius and the intuitive and playful amateur. We argue that Levitt and other authors within this new genre redefine the identity of economists toward this latter type. On the other hand, humor is often used by critics of this economistic outlook on life to show the limitations of this perspective and to delineate its appropriate domain. (shrink)

Adam Smith was a philosopher before he ever wrote about economics, yet until now there has never been a philosophical commentary on the Wealth of Nations . Samuel Fleischacker suggests that Smith's vastly influential treatise on economics can be better understood if placed in the light of his epistemology, philosophy of science, and moral theory. He lays out the relevance of these aspects of Smith's thought to specific themes in the Wealth of Nations , arguing, among other things, that Smith (...) regards social science as an extension of common sense rather than as a discipline to be approached mathematically, that he has moral as well as pragmatic reasons for approving of capitalism, and that he has an unusually strong belief in human equality that leads him to anticipate, if not quite endorse, the modern doctrine of distributive justice. Fleischacker also places Smith's views in relation to the work of his contemporaries, especially his teacher Francis Hutcheson and friend David Hume, and draws out consequences of Smith's thought for present-day political and philosophical debates. The Companion is divided into five general sections, which can be read independently of one another. It contains an index that points to commentary on specific passages in Wealth of Nations . Written in an approachable style befitting Smith's own clear yet finely honed rhetoric, it is intended for professional philosophers and political economists as well as those coming to Smith for the first time. (shrink)

Studies have shown that when students are tested about their knowledge of basic economic principles six months after completing an introductory economics course, they score no better, on average, than those who never took the course. That remarkable failure is explained in part by the fact that many professors try to teach their students far too much, and in part because many employ excessive mathematical formalism. This paper describes an alternative approach inspired by evidence that the human brain absorbs new (...) ideas most efficiently when they are expressed in narrative form. It describes an extraordinarily effective pedagogical device?the economic naturalist?writing assignment, in which the student is asked to pose an interesting question based on personal observation or experience, and then use basic economic principles in an attempt to craft a plausible answer to it. (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)

This paper develops a taxonomy of reflexive development practice, suggesting an examination of external values and norms; an assessment of the importance of local context; a recognition that policies can worsen the problems that they try to solve; and the idea that theory and policy should be revised as circumstances change. The taxonomy is developed as a way of addressing the difficulties encountered by the modernist Washington Consensus on the one hand and postmodernism on the other. The discussion draws on (...) the sociologist Pierre Bourdieu, who tries to move the debate further using the concept of reflexivity, combining the objectivism of the outsider with the attention to context of the locally embedded researcher. JEL Classifications: O10, B41. (shrink)

In recent decades education is increasingly perceived as an instrument for generating economic growth and enhancing production. Unexpectedly, however, many prominent economists, throughout history, have rejected this view of education. This article examines the grounds on which Tibor Scitovsky, who was one of the leading economists of twentieth century America, objected to the spread of production oriented education. The article begins by an historical overview of the relationship between economic and educational theory. It then explains why Scitovsky held the economic (...) growth achieved in the 20th necessitates an educational reform and presents the outline of this proposed educational reform. It is argued that by distinguishing between creative and defensive forms of consumption and by highlighting the inherent tension between comfort and pleasure, Scitovsky offers an innovative and challenging conception of the desired relationship between economics and education that can serve as an alternative to the one that prevails today and amend its many fallacies. The paper concludes by briefly exploring some of the educational implications that stem from Scitovsky’s thought. It is maintained that Scitovsky’s views provides an original defense for teaching the arts and humanities and a suggestive perspective on consumer education and teaching of high culture. (shrink)

Economists often try to make plausible inferences from a sizable empirical literature addressing a particular measurement, direction-of-effect, or testing issue. There are serious methodological problems associated with drawing such inferences. This article sets out some of these problems in order to make a case for their importance. After discussing these problems, the paper presents three case study examples of inference difficulties in specific literatures. It then proposes a new hypothesis about the time pattern of publication bias in empirical economics literatures. (...) As support for this hypothesis, it presents evidence that ?reversals in findings? in empirical literatures in economics are not uncommon. Similarities are pointed out between the focus on inference problems in this paper, and the meta-analysis literatures in psychology and medical clinical trials. (shrink)

This paper attempts to assess the recent literature on feminist economics from the perspective of modern Austrian economics. Feminists and Austrians share many epistemological and methodological criticisms of neoclassical theory, although Austrians have never linked those criticisms to gender. Both groups argue that the attempt to mimic the methods of the natural sciences has been a particular source of trouble for neoclassicism. The paper suggests that these common points of criticism can serve as a starting point for dialogue between the (...) two groups. Despite their similar criticisms, the groups do have divergent views on what economic theory should look like, as well as the policy conclusions that likely flow from those theories. The paper explores two examples of theoretical differences (the concept of utility and the relationship between competition and cooperation) and suggests ways that feminists and Austrians might begin to sort out their differences. (shrink)

Attempts to explain human behavior that appeal to economic rationality share many of the same ontological as- sumptions and methodological practices that the so-called ‘adaptationist program’ in biology was criticized for. This program in biology was largely abandoned by biologists as poorly motivated, and replaced with the active testing of both adaptive and non-adaptive hypotheses regarding the spread and maintenance of traits in populations. This development was largely welcome by the biological <span class='Hi'>community</span>, despite having required the development of new (...) tools, both conceptual and method- ological. Many analysts of contemporary microeconomic practice criticize the assumptions and practices employed therein as similarly poorly motivated. Close attention to these criticisms reveal them to have more than superficial similarities to the critiques of adaptationism in biology. These similarities extend to some macroeconomics researchers recent suggestions of ways that hypotheses regarding the causes of people’s actions might be tested; as yet, however, these suggestions have not been embraced by the field as a whole. By attending to the ways in which biological practice has moved beyond the adaptationist program, similar changes in economic practice may be motivated. (shrink)

This article responds to a commentary by Christian Schubert on our 'Evolvability and Progress in Evolutionary Economics'. Our response elaborates the key disagreement between Schubert and us, namely, our views about the purpose of an account of progress in evolutionary economics.

This paper develops an account of evolutionary progress for use in the field of evolutionary economics. Previous work is surveyed and a new account set out, based on the idea of evolvability as it has been used recently in evolutionary developmental biology. The biological underpinnings of this idea are explained using examples of a series of phenomena that influence the evolvability of biological systems. It is further argued that selection pressures and developmental processes are sufficiently similar to make this biological (...) concept useful in economics. The new account is defended against a number of common objections to the notion of progress in evolving systems, including the claim that all stipulated measures of evolutionary progress are essentially arbitrary. It is argued that progress, understood as an increase in evolvability over time, is both philosophically well-justified and provides useful predictive and explanatory resources to those seeking to understand and manipulate evolving economic systems. (shrink)

This paper examines a series of Schelling-like models of residential segregation, in which agents prefer to be in the minority. We demon- strate that as long as agents care about the characteristics of their wider community, they tend to end up in a segregated state. We then investigate the process that causes this, and conclude that the result hinges on the similarity of informational states amongst agents of the same type. This is quite dierent from Schelling-like behavior, and sug- gests (...) (in his terms) that segregation is an instance of macro behavior which can arise from a wide variety of micro motives. (shrink)

My philosophical case study concerns textbook presentations of the theory of demand. Does this theory contain anything more than just a collection of tautologies? In order to determine its empirical content, it must be viewed holistically. But then, the theory implies false factual claims. We can avoid this result by embracing the theory’s normative character. The resulting consequences will be illuminated with the new autodetermination thesis recently proposed in the philosophy of physics by Oliver Timmer. Applying his ideas to the (...) theory of demand reveals that the statements of this discipline simultaneously concern both values and facts. (shrink)

Errors in the history of economic analysis often remain uncorrected for long periods due to positive epistemic costs (PEC) involved in allocating time to going back over what older generations wrote. In order to demonstrate this in a case study, the economists’ practice of the “Coase Theorem” is reconsidered from a PEC point of view.

How do ideas evolve? Can one speak of scientific progress when there is more than one pathway of intellectual evolution in which different ideas emerge and flow in different directions? Is the history of economic analysis a compilation of a number of intellectual pathways? This essay argues that it is possible to understand the course of history as a number of overlapping, divergent, and endlessly changing pathways. Such pathways operate in different fashions. They sometimes lead to more coherent and high (...) levels of understanding. And sometimes they delay or obstruct advancement in intellectual history. In both cases, outcomes are unpredictable and multi-directional. (shrink)

Is there not any place in the history of ideas for the imperfect character of human doings (i.e. capability of error) that is repeated for so long until we lately start to think that it had long been wrong? The answer is: In the conventional histories of ideas there is almost none. The importance of the phenomenon,however, is immense. Intellectual history is full of errors. Scholarly errors are among the factors that generate intellectual pathways in which consequences of historical small (...) events feed back up on each other positively and give rise to historical pathologies in the end. Pathways hold the intellectuals dependent on the consequences of errors which interact upon each other and prevent resulting pathologies to disappear fully. As a result, ideas do not converge to a level of perfection. Evolutionary account of errors suggests that errors in the history of ideas matter even though they are often corrected. (shrink)

The frequency of historical materialist explanations in evolutionary social sciences is very low even though historical materialism and evolutionism have great many shared aims towards explaining the long term social change. David Laibman in his Deep History (2007) picks up some of the standard questions of evolutionary social theory and aims at advancing the conception of historical materialism so as to develop a Marxist theory of history from an evolutionary point of view. The contribution of Laibman’s work is to show (...) that historical and materialist explanations are present both in Marxian and evolutionary interpretations of history, and moreover, the traditional borders of historical materialism can be enlarged so as to embrace evolutionary methodology in explaining social change. The unbalanced research methodology of Laibman’s work, however, reduces the evolutionary depth of his contribution. The two main shortcomings of Laibman’s work are discussed under the titles of “The Audience Problem” and “The Evolutionary Problem”. (shrink)

Questions such as ‘What if such small companies as Hewletts and the Varians had not been established in Santa Clara County in California?’ or ‘What if Q-type keyboards had not been invented?’ are well known among economists. The questions point at a phenomenon called path dependence: ‘small events’, the argument goes, may cause the evolution of institutions to lock in to specific paths that may produce undesirable consequences. How about applying such skeptical views in economics to human ideas and thought (...) in general? That is to say, what if we ask such questions as: what if Greek philosophy had not been interested in ‘essences’ and ‘foundations’? What if Kant had not invented the ‘thing-in-itself?’ Nature and society, according to such Platonic philosophers, can be known only if it can be shown that events are governed, regulated and characterised by ‘forms’, which are immutable, complete, and perfect in their nature. But is there an ‘essence’ that makes a man 100 per cent male? Was there really a ‘foundation’ in history that caused a proletarian revolution in Russia? What if we had pushed aside the rhetoric of utopian ideality? What if we had a worldview different than the one depicted by Thomas More in his Utopia? The essay points at the possibility of such skepticism in human ideas and thought. (shrink)