The debate over whether or not economics is value-free has focused on the fact-value distinction: “is” does not imply “ought.” This paper approaches the role of ethics in economics from a Thomistic perspective, focusing not on the content of economic analysis, but on the actions taken by economic researchers. Positive economics, when it satisfies Aristotle's definition of technique, enjoys a certain autonomy from ethics, an autonomy limited by a technique's dependence for guidance and justification on ethical reflection. The modern isolation (...) of technique from ultimate ends entails the risk of mistaking the proximate ends of economics for ultimate ends, especially when applying economic methods in new ways or to new social phenomena. (shrink)

Even though one of the founding aspirations of our field was to foster mutually beneficial exchanges between economics and philosophy, economists never paid much attention to our work. Now that pra...

Mark Blaug and I agree that if there is a realist interpretation of economic behavior to be discerned in Friedman, it is to be found not in Friedman's belief that the profit motive overrides other possible motives, but in his belief that a selection mechanism is working in competitive markets. Our joint sympathy for evolutionary economics is largely based on a conviction that the conception of competition as a dynamic evolutionary process is rather plausible. We disagree, however, on two issues: (...) first, how important the evolutionary conception was for Friedman's overall argument; and, second, whether we can learn something about the real world from rigorous formal analytical models. In this article, I explain and argue for my position on these two issues, and use Nelson and Winter's theory of evolutionary economics to support an illustrate my argument. (shrink)

Although McMahon offers a potentially valuable extension of Joseph Raz's conceptualization of authority by distinguishing three different kinds of authority, this paper argues, first, that his account of the conditions and considerations that would justify managerial authority is problematic because it relies on a conception of reasons for action that excludes precisely the kind of rationality that plays an important role in the␣explanation and justification of authority in economic␣organization. This paper explains, second, why McMahon's thesis of the justificatory similarity of (...) authority in governments and nongovernmental organizations can also be seen to hold for corporate governance of publicly owned firms more specifically. Finally, this paper raises some critical objections against McMahon's presumption of democratic governance in governments and NGO's alike. The thrust of these objections is that democratic corporate governance does not make sense in the publicly owned firms because: it will not produce results that are fair or welfare maximizing, and it will undermine the legitimacy of managerial authority in such firms. (shrink)

The devices with which experimental economists account for and justify their own and their opponents’ views are investigated by examining transcripts of interviews with two participants in experimental economics. The earlier investigations of natural scientists’ discourse provide material for comparisons. The results suggest that in assessing an opponent’s deviating view experimentalists in economics can be more cautious than natural scientists to characterize their opponents as influenced by personal and social factors. Indeed, they seem to admit that to some extent both (...) their own and their opponents’ behavior involves these influences. Regarding the development of disputes, the respondents constructed accounts where general optimism concerning the ability of empirical arguments to resolve disputes was linked with an idea of dialogues between theorists and experimentalists as vehicles of progress. (shrink)

New Zealand has received world-wide accolades for its Early Childhood Education curriculum, Te Whāriki. This paper explores the tension between economic imperialism, and a curriculum acknowledged as visionary. The foundational ideas of Te Whāriki emanate from sociocultural and anti-racist pedagogies. However, its implementation is hampered by the overarching policy discourse of Human Capital Theory, with its instrumental emphasis on economic outcomes. While Te Whāriki offers local cultural and educational possibilities, HCT is presented by those espousing economic disciplines, as having universal (...) application. These tensions, largely unacknowledged and unexplored, place ECE teachers in positions of difficulty. While trying to meet aspirational curriculum goals in their daily practices, teachers’ attempts are constrained by supranational economic discourses. I ask how Edward Said’s concept of contrapuntal readings can offer spaces for resistance to the dominance of economics. (shrink)

Alexander Rosenberg has played a large role in creating the philosophy of economics as a distinct area of philosophy. But since the publication of Microeconomic Laws in 1976, Professor Rosenberg's thinking about economics has been casting the subject in an increasingly uncomplimentary light. This development is reflected in Rosenberg's new book Economics–Mathematical Politics or Science of Diminishing Returns? In this stimulating work Rosenberg endorses the view that economics does not constitute scientific empirical knowledge. He says.

We briefly review the recent literature on globalization, and present empirical evidence showing that economic globalization has been correlated with higher economic growth and lower poverty rates. We then evaluate the consequences of economic globalization in light of standards of commutative justice as Smith articulated, distributive justice as Rawls presented, and practical justice as Kolm explicated. This essay argues that economic globalization fulfills the requirements of all three species of justice.

In his paper on the “Methodology of Positive Economics”, Milton Friedman warned his readers that, “more than other scientists, social scientists need to be self-conscious about their methodology.” (1953, p. 34). But until quite recently, he seems either to have spoken to deaf ears or, more plausibly, to have been so successful in promoting his own views on methodology as to lead economists to be complacent about the many problems which plague their discipline. Many current textbooks, for example the one (...) by Eugene Silberberg, present economics as a science attaining the falsificationist standards once set down by Karl Popper, despite much evidence to the contrary. Indeed, as Douglas W. Hands (1985) has recently shown, even Sir Karl did not intend economics to be subjected to such severe standards. (shrink)

ABSTRACT:Although a research focus on the increasing involvement of corporations in shaping and maintaining the global rules of the game points out promising avenues for future research, it simultaneously makes clear how little currently established, mostly managerial conceptual frameworks have to offer in making sense of these developments. It is argued that we need to expand the rather restricted perspectives that these frameworks provide, in order to explore new conceptual foundations that will not only enable us to travel the confines (...) of the different disciplines involved with the study of the changing role of business in shaping the global rules of the game, but that can also systematically connect normative and positive research questions at the conceptual level. Three directions for this search for new foundations are briefly explored. (shrink)

S'il fallait identifier le champ de la réflexion philosophique qui a pris le plus déampleur au cours de la dernière décennie, sans doute faudrait-il dire: la philosophie de l'économique, appelée le plus souvent «méthodologie économique». Mais qu'entendre par «méthodologie «conomique»? Le signe le plus tangible peut-être de l'ébullition que connaît ce domaine a l'heure actuelle est que son identite meme fait l'objet d'âpres disputes. Tenter d'en fournir une caractérisation qui ferait consensus rélèverait de l'étourderie et se révélerait sans doute une (...) perte de temps complète. Comment, alors, dois-je m'y prendre pour présenter le domaine qui fournit son thème au prèsent numéro deDialogueEn y allant d'une réflexion qui aura peut-être davantage l'allure d'un discours a bâtons rompus que celle d'un exposé systematiqué, puis en illustrant mon propos d'exemples tirès des diverses contributions au présent numéro plutôt qu'en tentant de d'finir strictement ce champ de recherches. (shrink)

In the following review essay I explore the limitations of effective and constructive critique of Tony Lawson’s realism in economics as articulated in Ontology and Economics. In the first section I summarize the different framing procedures that shape the different critiques. In the second section I illustrate the limitations this creates using Caldwell’s contribution and in the third section I explore the way Lawson is conditioned to respond in terms of contestation, clarification and restatement. In the fourth section I add (...) some additional detail based on Samuelson’s approach to modelling in order to illustrate what is at issue between Caldwell and Lawson and to emphasize what this suggests in terms of a common pattern across the contributions to the text. In the fifth section and in the conclusion I link the limitations of the various critiques found in Ontology and Economics to a basic issue of the vulnerability of realism to critique in order to make some suggestions regarding constructive critique and development for realism in economics. (shrink)

Mark Blaug’s normative methodology of economics is an attempt to articulate certain intuitions about how economic science could be improved by making it more “realistic”. I discuss two such articulations, one in terms of falsificationist principles, the other in terms of an alleged trade-off between relevance and mathematical rigour. My conclusion is that Blaug’s methodology is itself unrealistic, both descriptively and normatively. His (well intended) methodological prescriptions for the improvement of economics are not based on a systematic, consistent, descriptively adequate, (...) and normatively viable account. I suggest that Blaug’s intuitions can be developed into a more realistic account by incorporating the analysis of two further topics: economic modelling and the institutions of academic research. (shrink)

In this paper I analyse the problem of free will and determinism as it pertains to the Austrian School of Economics. I demonstrate that despite the fact they subscribe to the concept of causality,...

A central point of debate over environmental policies concerns how future costs and benefits should be assessed. The most commonly used method for assessing the value of future costs and benefits is economic discounting. One often-cited justification for discounting is uncertainty. More specifically, it is risk aversion coupled with the expectation that future prospects are more risky. In this paper I argue that there are at least two reasons for disputing the use of risk aversion as a justification for discounting (...) when dealing with longterm decisions, one technical and one ethical. Firstly, I argue that technically, it implies an inconsistency between theory and practice. And secondly, I argue that discounting for uncertainty relies on a form of individualism which, while reasonable in standard microeconomic theory where an agent chooses how to spread her own consumption over her own lifetime, is inappropriate in the context of intergenerational social decisions. (shrink)

Network theory is applied across the sciences to study phenomena as diverse as the spread of SARS, the topology of the cell, the structure of the Internet and job search behaviour. Underlying the study of networks is graph theory. Whether the graph represents a network of neurons, cells, friends or firms, it displays features that exclusively depend on the mathematical properties of the graph itself. However, the way in which graph theory is implemented to the modelling of networks differs significantly (...) across scientific fields. This article compares the economics variant of network theory with those of other fields. It shows how the methodology employed by economists to model networks is shaped by two explanatory desiderata: that the explanandum phenomenon is based on micro-economic foundations and that the explanation is general. (shrink)

Over time, Mark Blaug became increasingly sceptical of the merits of the approach to the history of economics that we find in his magnum opus, Economic theory in retrospect, first published in 1962, and increasingly leaned to favour 'historical' over 'rational' reconstructions. In this essay, I discuss Blaug's shifting historiographical position, and the changing terms of historiographical debate. I do so against the background of Blaug's personal life history and the increasingly beleaguered position the history of economic thought found itself (...) in after the Second World War. I argue that Blaug never resolved the tensions between historical and rational reconstructions, partly because he never fleshed out a viable notion of historical reconstruction. I trace Blaug's difficulty in doing so to his firm conviction that the history of economics should speak to economists, a conviction clearly present in his 2001 essay: "No history of ideas, please, we're economists". (shrink)

This article is the result of an empirical research project analyzing the decision behaviour of Austrian managers in ethical dilemma situations. While neoclassical economic theory would suggest a pure economic rational basis for management decisions, the empirical study conducted by the authors put other concepts to a test, thereby analyzing their importance for managerial decision making: specific notions of fairness, reciprocal altruism, and commitment. After reviewing some of the theoretical literature dealing with such notions, the article shows the results of (...) an online survey working with scenarios depicting ethical dilemma situations. By judging such scenarios the respondents showed their preference for the named concepts, though with different degrees of confirmation. The results (with all limitations of an online survey in mind) support the theoretical work on the named concepts: Fairness elements (including Rawlsian principles of justice and an understanding of fairness as conceived by a reference transaction) play a major part in management decisions in ethical dilemma situations. Also, commitment as a behaviour that sticks to rules even if personal welfare is negatively touched, and reciprocal altruism as a cooperative behaviour that expects a reciprocal beneficial action from other persons have been concepts used by Austrian managers when analyzing ethical dilemmas. The article also tries to put the results into a comparative perspective by taking into account other studies on ethical decision factors conducted with, e.g. medical doctors or journalists, and by discussing intercultural implications of business ethics. (shrink)

Current debates between behavioural and orthodox economists indicate that the role and epistemological status of first principles is a particularly pressing problem in economics. As an alleged paragon of extreme apriorism, the methodology of Austrian economics in Mises’ tradition is often dismissed as untenable in the light of modern philosophy. In particular, the defence of the so-called fundamental axiom of praxeology—“Man acts.”—by means of pure intuition is almost unanimously rejected. However, in recently resurfacing debates, the extremeness of Mises’ epistemological position (...) has been called into question. Rather than directly engaging in these exegetical discussions, this paper aims to substantiate the possibility and plausibility of conventionalist defences of praxeology per se. The proposed shift includes settling for an analytic fundamental axiom and acknowledging the prima facie tenability of other research programs than praxeology. Since conventionalist praxeology is only moderately aprioristic, mainstream economists and philosophers might be more likely to engage in fruitful discussions with those Austrian scholars who elaborate pragmatic arguments for praxeology instead of invoking pure intuition. (shrink)

ABSTRACTThe present paper evaluates Davis’s analysis of the potential transformational change of current orthodoxy and his main proposition of the potential benefits that will arise from the involv...

The literature in economic methodology has witnessed an increase in the number of studies which, drawing upon the postmodern turn in social sciences, pay serious attention to the non-epistemological-discursive elements of economic theorizing. This recent work on the "economic discourse" has thus added a new dimension to economic methodology by analyzing various discursive aspects of the construction of scientific meanings in economics. Taking a similar stance, this paper explores Michel Foucault's archaeological analysis of scientific discourses. It aims to show that (...) his archaeological reading of the history of economic thought provides an articulate non-epistemological framework for the analysis of the discursive elements in the history of economics and contemporary economic theorizing. (shrink)

The paper examines the ramifications of naturalism with regard to the question of individuality in economics and biology. Economic theory has to deal with whether households, firms, and states are individuals or are mere entities such as clubs, networks, and coalitions. Biological theory has to deal with the same question with regard to cells, organisms, family packs, and colonies. To wit, the question of individuality in both disciplines involves three separate problems: the metaphysical, phenomenist, and ontological. The metaphysical problem is (...) concerned with purposeful action: Is the firm or organism exclusively the product of efficient causality (optimization) or is it motivated by final causality (purposefulness)? The phenomenist problem is interested in the substantiality of essences: Is the firm''s or organism''s scheme of institutions/traits deep or is it extraneous to identity? The ontological problem is related to the issue of reductionism: Is the behavior of lower-level organization governed by a pre-constituted entities or is it context-sensitive? The paper finds that theoretical differences run along the naturalist/anti-naturalist divide rather than along disciplinary specialization. Also, the paper finds that it is not inconsistent for the same theorist to be naturalist with regard to one problem and anti-naturalist with respect to the other two problems. (shrink)

Les représentants de l'École autrichienne sont ici mis sous la même bannière pour autant seulement qu'ils ont été unanimes à revendiquer pour les postulats de l'économie pure, les «lois exactes» de la théorie économique, c'est-à-dire de la théorie marginale de l'utilité, un statut particulier en ce sens qu'ils tenaient pour impossible, voire absurde ou simplement inutile de soumettre les postulats en cause à des tests empiriques. L'apriorisme dont ils se réclament, fait à juste titre la marque de commerce de l'École (...) marginaliste autrichienne; Menger en a fourni les principes, von Mises la justification, et Rothbard s'est occupé de propager la doctrine de l'autre côté de l'Atlantique. (shrink)

The paper expands on Goshal’s criticism of what management as a scientific discipline teaches and the effects on managerial and societal ethics. The main argument put forward is that the economisation of management has a detrimental effect on the practice of management and on society in large. The ideology of economism is described and analysed from an epistemological perspective. The paper argues that the economisation of management not only introduces the problems of economics (three are identified and discussed) but destroys (...) the very essence of management because economics is focused on efficiency and management should be focused on effectiveness. What is more, the basic axioms of mainstream economics stand in stark contrast to the philosophy of the Enlightenment and therefore endanger the foundations of Western societies. Management theory (via corporate governance) is the Trojan horse carrying economism into society. (shrink)

Adam Smith’s is often falsely portrayed as having argued that radical selfishness is a force for the good and that this “invisible hand’ is his market mechanism. This paper argues that Smith’s real market mechanism, the sympathy manoeuvre, is a viable alternative to Schumpeterian and mainstream models of innovation in economics and also could help build a firmer theoretical basis for other approaches such as Responsible Innovation. To Smith all human activity was social and must be understood and explained in (...) terms of the sentiments involved. Discovery, for instance, is driven by three sentiments (wonder, surprise, admiration), economic activities by sympathetic imagination, the need for exchange, the need to better one’s position in life, and the need for gratitude. Through sympathetic imagination, his famous model of the impartial spectator, Smith elegantly connects the individual and society. Smith’s innovation process is thus an exercise in social construction and not a destructive process based on radical selfishness. The paper argues that this social innovation process is a viable alternative to the extant approaches that are essentially asocial and amoral (economism) or ideologically normative (Responsible Innovation). (shrink)

This paper argues that economics, over the past 200 years, has become steadily more anti-philosophical and that there are three stages in the development of economic thought. Adam Smith intended economics to be a descriptive social science, rooted in an understanding of the moral and psychological processes of an individual’s decision-making and its connection to society in general. Yet, immediately after Smith’s death, economists made a clean cut and invented a totally new discipline: they switched towards a physicalist understanding of (...) human nature. Humans, like atoms, follow a natural law: they are driven by an emotion (defined as a non-emotion, rationality), namely selfishness. Thus economics became a ‘natural’ science. In the 20th century, the second reinterpretation removed all traces of humanity from the study of economics and declared economics to be a formal science like mathematics and logics. The actor in Phase 3 economics is homo economicus syntheticus, a postulate whose only connection to real humanity is the word homo. The paper asks what the results of this dramatic relocation are and why Phase 3 economics still claims descent from Smithian economics, despite the massive differences. (shrink)

CST is widely disregarded in the academic and public discourse. This essay argues that this is the case for two related reasons. Firstly, CST is based on the pre-Enlightenment approach to moral philosophy, virtue ethics, while the mainstream in business ethics favours the rule-based approaches consequentialism and deontology and their variants. Secondly, mainstream approaches also have adopted a positivist epistemology where theories represent the Truth that must not be questioned: they have become ideologies. This paper argues that CST, mainly through (...) the virtue ethical doctrine of the mean, is saved from having become an ideology and is much closer to the ideal of science as a self-questioning system than the mainstream in business ethics. This essay explains this counter-intuitive conclusion by tracing the history of CST and embedding it in an epistemic discussion and then suggesting what business ethics could take from CST to regain the all-important discursiveness it once had. (shrink)

In both the public and the business world, in academe as well as in practice, the ideas of Adam Smith are regarded as the bedrock of modern economics. When present economic conditions and management practices are criticised, Adam Smith is referred to by defenders and detractors of the current status quo alike. Smith, it is believed, defined the essential terms of reference of these debates, such as the rational pursuit of self-interest on part of the individual and the resultant optimal (...) allocation of goods in free markets thanks to the workings of an “invisible hand.” In this article, we question whether this standard view of Smith, the economist, is tenable. We provide an extensive review of the extant secondary literature from economists, business ethicists, and philosophers, comparing their assessments to crucial elements of Smith’s theoretical system. As a result, we show that Smith, far from being an advocate of a value-free or even value-averse conception of economic transactions, stood for a virtue-based and values-oriented model of business. Accordingly, we argue current management education and the pedagogy of business ethics ought to be changed, and certain strategic conclusions drawn for business practice. (shrink)

This paper argues that the MBA, probably the most successful academic program of the last 50 years, negatively affects the theory and practice of management with regard to ethics through its pedagogy, structure, and its underlying epistemic assumptions. In particular I seek to demonstrate how the syllabus, the pedagogy and the epistemological assumptions of MBA programs together make managers/leaders unable and unwilling to deal with ethics. I also argue that while the what and the how play a very important role, (...) it was only the emergence of a radical philosophical underpinning that has put management education on a negative trajectory. The paper thus examines MBA education from a meta-level perspective, connecting the pedagogical model with epistemological beliefs. (shrink)

The paper takes a fresh look at two essays that Adam Smith wrote at the very beginning of his career. In these essays, Smith explains his philosophy of science, which is social constructivist. A social constructivist reading of Smith strengthens the scholarly consensus that The Wealth of Nations needs to be interpreted in light of the general moral theory he explicates in The Theory of Moral Sentiments, as the two essays and TMS stress the importance of the same concepts: e.g., (...) moral imagination, the socially embedded individual, and humility. The connecting tissue between all three works is made up of sentiments and values. Smith regards the socially embedded human as the agent in all three realms, and humans are always driven by values. Smith not only conceives of economics as an applied moral philosophy, but also bases both research areas on a view of knowledge creation that stresses specific epistemic values. If mainstream economic theory wants to have any claim to Adam Smith, it would have to change not only what it argues but also how it argues. Economists would have to replace the language of mathematics with the language and logic of moral philosophy and give values centre stage. (shrink)

This paper analyzes the main features of rational choice theory and evaluates it with respect to the conceptions of Lakatos' research program and Laudan's research tradition. The analysis reveals that the thin rationality assumption, the axiomatic method and the reduction to the micro level are the only features shared by all rational choice models. On these grounds, it is argued that rational choice theory cannot be characterized as a research program. This is due to the fact that the thin rationality (...) assumption cannot be understood as a hard core in Lakatos' terms. It is argued that Laudan's conception of a research tradition better characterizes rational choice theory. On the basis of this conclusion, certain important criticisms of rational choice theory are answered. First, the criticisms concerning the core assumptions of rational choice theory are countered. It is argued that this critique is based on a misunderstanding of rational choice theory as a unified set of models, such as Lakatos' research program. Second, Green and Shapiro's rational choice 'pathologies' - inconsistent predictions, post hoc theory development and arbitrary domain restrictions - are evaluated. Contrary to Green and Shapiro, it is argued that post hoc theory development is a more preferable strategy for developing RCT than domain restrictions based on ex ante rules. (shrink)

This essay offers a history of the development of philosophy of economics from the 1830s until today, with a personal perspective on the developments of the last four decades. It argues that change...

This paper discusses the development of the field of economic methodology during the last few decades emphasizing the early influence of the "shelf" of Popperian philosophy and the division between neoclassical and heterodox economics. It argues that the field of methodology has recently adopted a more naturalistic approach focusing primarily on the "new pluralist" subfields of experimental economics, behavioral economics, neuroeconomics, and related subjects.

How distinct is European philosophy of science? The first step is to characterize what is or might be considered as ‘European philosophy of science’. The second is to analyse philosophy of the social sciences as a relevant case in the European contribution to philosophy of science. ‘European perspective’ requires some clarification, which can be done from two main angles: the historical approach and the thematic view. Thus, there are several structural and dynamic things to be considered in European philosophy of (...) science and compare with other conceptions: the topics discussed; the contents proposed; and the style of thought used. The case of philosophy of the social sciences is relevant for the historical approach and for the thematic view. Historically, the Erklären–Verstehen methodological controversy arose in this continent, where the main authors and most of the influential approaches are located. Thematically, we can consider the contributions made by these European approaches... (shrink)

Choice modellers are frequently criticized for failing to provide accurate representations of the neuro-psychological substrates of decisions. Several authors maintain that recent neuro-psychological findings enable choice modellers to overcome this alleged shortcoming. Some advocate a realistic interpretation of neuro-psychological models of choice, according to which these models posit sub-personal entities with specific neuro-psychological counterparts and characterize those entities accurately. In this article, I articulate and defend three complementary arguments to demonstrate that, contrary to emerging consensus, even the best available neuro-psychological (...) models of choice cannot be justifiably given this realistic interpretation. Moreover, I explicate what challenges will continue to hamper neuro-psychological modellers’ attempts to substantiate a realistic interpretation of their models. In doing so, I draw on the literature on scientific modelling to advance the ongoing philosophical discussion concerning the ontological status of the sub-personal entities posited in distinct decision sciences, the resemblance relations that supposedly connect choice models and the neuro-psychological substrates of decisions, and what conditions these models must satisfy to be regarded as realistic representations of their target systems. (shrink)

In recent years, several authors have reconstructed the relationship between 20th-century economic theory and neuro-psychological research in terms of a three-stage narrative of initial unity, increasing separation, and ongoing reunification. In this article, I draw on major developments in economic theory and neuro-psychological research to provide a descriptive and normative critique of this reconstruction. Moreover, I put forward a reconstruction of the relationship between economics and neuro-psychology that, I claim, better fits both the available empirical evidence and the methodological foundations (...) of these disciplines. In doing so, I argue that recent calls to develop a unified interdisciplinary framework for modeling choice are premised on disputable presuppositions concerning both the domain of economic theory and the relationship between this theory’s axiomatic foundations and empirical findings about the neuro-psychological substrates of choice. (shrink)

Normative research has nearly vanished from the academic ‘mainstream’ in accounting. Due to its prescriptive and value-driven approach, normative accounting research has been stigmatized as being unscientific and largely replaced by positive studies. We put this stigma into perspective. We first conceptualize the ‘positive-normative’ distinction and identify this dichotomy in accounting research history. We then challenge the dogmatic confinement of science to descriptive (positive) approaches. Moreover, we debate the basic conditions for normative accounting research and conclude that methodological and epistemological (...) pluralism in accounting research may help address a wide range of potential research questions. We point out that normative research approaches are essential in an applied science such as accounting, lest practical implications and prescriptions are to be the exclusive domain of accounting practice. (shrink)

In this paper we attempt to show that rhetoric plays an important role in economics as a science and in economy as a social system. Our task is rather demonstrative, but it aims at stripping away the illusion that economics has acquired a status equal to the natural sciences, in which there is no place for subjectivism and ambiguity. Economics belongs, after all, to the realm of the social sciences and as such it is subject to the limitations of human (...) cognition and understanding. We show that economics as a science is not free from employing sophisticated methods of persuasion and rhetoric. Next, we also try to demonstrate that rhetoric can be a useful tool in creating economic reality. It does not have influence on economic processes per se, but it is helpful in constructing an institutional architecture of the economy by influencing public opinion and decision makers. (shrink)

Adam Smith said that ‘the propensity to truck, barter and exchange one thing for another is common to all men, and to be found in no other race of animals.’ Smith addressed the mark of the man economical, and there is no denying that this is the peculiar way he acts: clearly, to truck, barter and exchange is to act in a certain way. Austrian economics adopts this way of looking at the realm of economics. It prides itself as a (...) theory of human action. This claim seems ill-founded as long as so important a contribution as Ludwig von Mises’s praxeology remains insufficiently understood. In this paper, I address Barry Smith’s charge that in praxeology ‘other core notions, in addition to the concept of action, have been smuggled into and the theory is therefore not purely analytic’. I offer logical proofs of two cornerstone theorems of praxeology, the uneasiness theorem and the scarcity theorem, and thus provide vindication. Also, the findings support Mises’s controversial claim that economics is a priori founded in action theory. Thus, Carl Menger’s dream to lay foundations to economics and the other social sciences may have come true in the guise of praxeology. (shrink)

When the methodology of economics first emerged as a distinct field of economics in the 1970s, historians of economic thought contributed greatly to its development. This is visible in the publicat...