Pragmatism about Economics

The aim of this work is to illustrate the psychological contributions of Pragmatism and of the Original Institutional Economics, and their relevance for improving the process of social valuing and, as a consequence, the effectiveness of policy action. As a matter of fact, both institutionalist and pragmatist theories were well acquainted with various strands of psychology, and some of them also provided relevant contributions in this respect. Moreover, these theories reveal, along with various differences, significant complementarities, both between themselves and (...) with important concepts of social psychology and psychoanalysis. The work will address the following aspects: The main characteristics of pragmatist psychology with particular attention to their social implications. For space reasons, we will focus attention on the contributions of authors – John Dewey, William James and George Herbert Mead – more oriented to social sciences. The psychological contributions of institutionalism. We will pay particular attention to Thorstein Veblen's theory of instincts and John Rogers Commons' theory of negotiational psychology. We highlight that these theories present, despite a number of differences, relevant complementarities. (shrink)

The methodological foundations of any scientific discipline are shaped by the goals towards which that discipline is aiming. While it is almost universally accepted that the goals of explanation and prediction of natural and non-human phenomena have been met with great success since the scientific revolution, it is almost just as universally accepted that the social sciences have not even come close to achieving these goals. This raises the question addressed in this paper, namely, what is economics, and social science (...) more broadly speaking, for? What is their aim, and how is it similar and dissimilar to that of the natural sciences as we have come to classify them? I take up this question from a pragmatic perspective in this paper, setting economics within the wider context of social inquiry. Specifically, I turn to Hilary Putnam and John Dewey as exemplars of the pragmatic critique of any economics that sees its goals in line with those of the natural sciences, that is, as aiming for explanation and prediction according to governing laws of human behaviour. NB: this is a preprint that underwent some minor edits. (shrink)

ABSTRACT Pragmatism as a theoretical enterprise has been criticized since its inception for not having a coherent account of the role of power and violence in human affairs as well as a moral justification and criteria for marshaling arguments in favor of democracy. In this essay I approach recent developments in pragmatic democratic theory with those persistent criticisms in mind. Rather than lacking justificatory resources and underthematizing the role of violence and asymmetrical power relations, Robert Talisse's and James Bohman's works, (...) respectively, demonstrate the epistemological depth and power of updating pragmatism as a theory of situated and critical political inquiry. However, each could be extended by utilizing a more robust description of the problematic situation polities currently face. Specifically, I turn to Dewey for guidance in how our pragmatic epistemological and evaluative practices might incorporate the facts of our problematic situation. I do this in terms of the power structures of economic processes both in terms of contract and in terms of the intellectual discourses that attempt to scientifically describe these processes. (shrink)

Scientific pluralism, a normative endorsement of the plurality or multiplicity of research approaches in science, has recently been advocated by several philosophers (e.g., Kellert et al. 2006, Kitcher 2001, Longino 2013, Mitchell 2009, and Chang 2010). Comparing these accounts of scientific pluralism, one will encounter quite some variation. We want to clarify the different interpretations of scientific pluralism by showing how they incarnate different models of democracy, stipulating the desired interaction among the plurality of research approaches in different ways. Furthermore, (...) the example of scientific pluralism is used to advocate the application of democratic theory to philosophy of science problems in general. Drawing on the parallels between models of science and models of democracy, we can articulate how the plurality of research approaches in science should interact within a democratic framework as well as how to cultivate multiple research approaches in the epistemically most productive way possible. This will not only improve our understanding of scientific plurality, but it can also help us stipulating how different research approaches should interact to constitute the most objective account possible or how the ideal of scientific consensus has to be understood. Ultimately, developing democratic models of science bears on the question of how deeply science and democracy are entwined. (shrink)

I address the topic of pragmatic methodology as a practitioner in applied microeconomics who has been working in the still nascent field of the ?economics of organization?. My purpose is both to make explicit the methodology out of which transaction cost economics works and to suggest that other theories of economic organization do the same. Conceivably convergence will develop in the process, maybe even a consensus. At a minimum, it will be useful to have each implicit methodology made explicit. I (...) begin with some contrasting views on methodology. Section 2 sets out the rudiments of pragmatic methodology. Section 3 examines how transaction cost economics responds to the four precepts of pragmatic methodology. Additional methodological considerations that are posed by transaction cost economics are discussed in section 4. Concluding remarks follow. (shrink)

A cultural economic perspective focuses on values as they affect behavior, the valuations in various spheres as well as the valorization, that is, the enhancement or the changing of values. The pragmatic view focuses on the way values function in everyday life and in particular on the deliberations in which they are formed and expressed. Values matter; the challenge is to render them susceptible to analysis in economic contexts. The illustrations are derived from the economics of the arts.

This paper poses a Deweyan challenge to both the neoclassical framework of rational choice and models of bounded rationality and deliberation, especially the procedural theory of rationality advanced by Herbert Simon. We demonstrate how modern theories on procedural or instrumental rationality trace their origin to the tradition of British empiricism, especially the philosophy of David Hume. Most theories of action such as Simon's assume actors may control their bodies 'at will.' For Dewey, habits are will; we control them when we (...) identify them and condition them through reflective deliberation. To clarify our Deweyan critique, we use empirical research on consumer's use of mathematical calculation in supermarkets, by Jean Lave, which rejects calculative Turing machine rationality. We argue that a theory that can deal with deliberation regarding incommensurable values better explains economic behavior in the everyday marketplace. Thus, economists would do better to concentrate on social practices in specific contexts and the neurophysiological basis of need and desire. (shrink)

Mark White hopes to incorporate John Dewey's appeal to deliberation in preference formation into the neoclassical model of choice. White finds affinities between Dewey and neoclassicism: both reject preordained goals, value consequences above motives, and promote 'scientific ethics.' I claim Dewey's actual theory of value and choice is more radically divergent, and may not simply be integrated with neoclassical model. Specifically, I claim: 1) White's interactional view of agents acting in an environment falls short of Dewey's transactional notion of their (...) reciprocal determination within problem-solving activity; 2) beyond both preference and deliberation, the consequence of valuation activity is the final determinant of a good; 3) Dewey did not advocate relinquishing ethics to the natural and social sciences, but rather viewed moral behavior as the cultivation of a unique 'art.'. (shrink)

Entrepreneurship cannot be explained by any economic theory that isolates innovation from ongoing social processes or locates creativity in a space of given, fixed values. Unfortunately, mainstream economics has committed these mistakes, rooted in instrumentalist and antidemocratic notions of consumption and rationality that permits reasoning only about means toward given ends. Genuine innovation is, on Dewey's pragmatic approach to values, the intelligent modification of both means and ends for experimental action. When joined to an appreciation that consumption is just a (...) phase of production, innovation can be properly seen as productive value-creation. Entrepreneurship is democratic experimentation in the economic realm. (shrink)

The author fundamentally agrees with Mousavi's and Garrison's criticisms of Herbert Simon's version of rational choice theory, underscoring three central points of their analysis: 1) rational choice theory's naïve assumption that consumer preferences are given and fixed, rather than transactionally formed; 2) the truncated notion of 'rationality' assumed by Simon, and other rational choice theories generally; and 3) the impoverished philosophical anthropology assumed by Simon, and the notion of homo economicus generally. The author's only significant disagreement with Mousavi and Garrison (...) is with respect to the second point: they choose not to follow Dewey's shift to 'intelligence,' as a replacement for the abused term 'rationality.'. (shrink)

This article explores the place of values in economic theory and practical decision-making and policy. I argue that Arjo Klamer's pragmatism does not sufficiently distinguish what is valued from what is valuable, and does not sufficiently attend to the experimental inquiry needed to move from the former to the latter. I outline a more robust pragmatism, explaining how it avoids: treating values in isolation from facts; rendering claims about values subjective; and, identifying what is preferred or chosen or valued with (...) what is preferable or worthy of choice or valuable. From this perspective, I explain the severely limited value of rational choice theory, and describe its practical problems and the need for a more self-critical, pragmatic treatment of values in economics. (shrink)

As so many other activities nowadays, modern science revolves around the competition for attention. Unlike in so many other attention games, in science those who seek attention are more or less the same people who are giving it. An important characteristic is the skewness of the distribution of scientific attention. We discuss the effect these characteristics have on scientific institutions. An important thesis of ours is that scientists converge in clusters of likeminded scientists. Given the character of scientific organization and (...) communication we expect that the digitalization of scientific communication will not affect the basic scientific institutions as the principles upon which the Internet functions coincide more or less with the way science functions. However, violation of these principles can in principle disrupt science and fundamentally change its character. Diversity, the key element of scientific conversation, may be destroyed. (shrink)

McCloskey's work on the rhetoric of economics has little to say about Imre Lakatos, and indeed the scientific method prescribed by Lakatos, as it stands, would support McCloskey's claim that philosophers? imperatives bear little relation to what economists actually do. But a Bayesianized version of Lakatos is a different matter, and provides a yardstick against which the various rhetorical devices noted by McCloskey can be measured. We argue that McCloskey's list can be divided into those forms of persuasion which would (...) and would not remain convincing once the reader saw how the persuasion was being worked, and that this distinction corresponds precisely to those forms of persuasion which do and do not represent the ?Bayesianized Lakatos? method. (shrink)

Hermeneutics has become a major topic of debate throughout the scholarly community. What has been called the "interpretive turn" has led to interesting new approaches in both the human and social sciences, and has helped to transform divided disciplines by bringing them closer together. Yet one of the largest and most important social sciences economics has so far been almost completely left out of the transformation. Economics and Hermeneutics takes a significant step towards filling this gap by introducing scholars on (...) both sides of the divide to ways that hermeneutics might help economists address some of their most important problems. Among the topics addressed are entrepreneurship, price theory, rational expectations, monetary theory, welfare economics, and economic policy. The approaches to economics represented include the Austrian school, McCloskey's "rhetoric" approach, Marxian critical theory and institutionalism. (shrink)

Is rhetoric just a new and trendy way to épater les bourgeois? Unfortunately, I think that the newfound interest of some economists in rhetoric, and particularly Donald McCloskey in his new book and subsequent responses to critics, gives that impression. After economists have worked so hard for the past five decades to learn their sums, differential calculus, real analysis, and topology, it is a fair bet that one could easily hector them about their woeful ignorance of the conjugation of Latin (...) verbs or Aristotle's Six Elements of Tragedy. Moreover, it has certainly become an academic cliché that economists write as gracefully and felicitously as a hundred monkeys chained to broken typewriters. The fact that economists still trot out Keynes's prose in their defense is itself an index of the inarticulate desperation of an inarticulate profession. (shrink)

In The Enterprise of Knowledge, I proposed a general theory of rational choice which I intended as a characterization of a prescriptive theory of ideal rationality. A cardinal tenet of this theory is that assessments of expected value or expected utility in the Bayesian sense may not be representable by a numerical indicator or indeed induce an ordering of feasible options in a context of deliberation. My reasons for taking this position are related to my commitment to the inquiry-oriented approach (...) to human knowledge and valuation favored by the American pragmatists, Charles Peirce and John Dewey. A feature of any acceptable view of inquiry ought to be that during an inquiry points under dispute ought to be kept in suspense pending resolution through inquiry. (shrink)