Abstract
This article examines and assesses Bernard Hodgson’s critique of the Neoclassical concept of rationality and its place in the literature. It is argued that Hodgson’s Trojan horse critique is superior to the others because it addresses the role of empiricist epistemology in reducing reason to instrumental rationality and consequent disappearance of the human subject of political economy. The second phase of the empiricist level of analysis reintroduces the capacities for ethical deliberation, self-determination, and the socio-historical conditions and institutional setting of the economic agent. Because Hodgson’s solutions presuppose empiricist terrain, they are arbitrary. This occurs because the fundamental problem of Neoclassical rationality is its ontology. Yet by introducing the human subject into economic theory, Hodgson’s solutions move onto an ontological terrain adequate for economic analysis of human subjects.
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Notes
Amartya Sen uses the term fact/value dichotomy which denotes ethical neutrality, and the engineering approach, to denote the naturalist thesis. For the purpose of this study, the terms are interchangeable.
Pareto Optimality occurs when there is no way of reallocating resources such that even one person is made better off by the allocation without making other person(s) worse off. Both better of and worse off are defined in terms of consumer utility, i.e., the allocation of total consumer utility in the economy such that no consumer can be allocated more utility without at least one consumer having less. A general competitive equilibrium, its conditions, guarantee Pareto Optimality.
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Badeen, D. Bernard Hodgson’s Trojan Horse Critique of Neoclassical Economics and the Second Phase of the Empiricist Level of Analysis. J Bus Ethics 108, 15–25 (2012). https://doi.org/10.1007/s10551-011-1083-7
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DOI: https://doi.org/10.1007/s10551-011-1083-7