This book offers a comprehensive overview of the structure, strategy and methods of assessment of orthodox theoretical economics. In Part I Professor Hausman explains how economists theorise, emphasising the essential underlying commitment of economists to a vision of economics as a separate science. In Part II he defends the view that the basic axioms of economics are 'inexact' since they deal only with the 'major' causes; unlike most writers on economic methodology, the author argues that it is the rules that (...) economists espouse rather than their practice that is at fault. Part III links the conception of economics as a separate science to the fact that economic theories offer reasons and justifications for human actions, not just their causes. With its lengthy appendix introducing relevant issues in philosophy of science, this book is a major addition to philosophy of economics and of social science. (shrink)
This book is about preferences, principally as they figure in economics. It also explores their uses in everyday language and action, how they are understood in psychology and how they figure in philosophical reflection on action and morality. The book clarifies and for the most part defends the way in which economists invoke preferences to explain, predict and assess behavior and outcomes. Hausman argues, however, that the predictions and explanations economists offer rely on theories of preference formation that are in (...) need of further development, and he criticizes attempts to define welfare in terms of preferences and to define preferences in terms of choices or self-interest. The analysis clarifies the relations between rational choice theory and philosophical accounts of human action. The book also assembles the materials out of which models of preference formation and modification can be constructed, and it comments on how reason and emotion shape preferences. (shrink)
This essay defends the controversial and indeed counterintuitive claim that there is a good argument to be made from a Lockean perspective for government action to guarantee access to health care. The essay maintains that this argument is in some regards more robust than the well-known argument in defense of universal health care spelled out by Norman Daniels, which this essay also examines in some detail. Locke's view that government should protect people's lives, property, and freedom–where freedom is understood as (...) independence and self-determination–justifies government action to ensure access to health care, because, just as individuals cannot protect themselves from crime and foreign invasion, so individuals are unable to provide for their own health care. Defense from disease is as important as defense from crime, and–although this is arguable–government action to guarantee access to health care does not itself undermine freedom. (shrink)
This book, by one of the pre-eminent philosophers of science writing today, offers the most comprehensive account available of causal asymmetries. Causation is asymmetrical in many different ways. Causes precede effects; explanations cite causes not effects. Agents use causes to manipulate their effects; they don't use effects to manipulate their causes. Effects of a common cause are correlated; causes of a common effect are not. This book explains why a relationship that is asymmetrical in one of these regards is asymmetrical (...) in the others. Hausman discovers surprising hidden connections between theories of causation and traces them all to an asymmetry of independence. This is a major book for philosophers of science that will also prove insightful to economists and statisticians. (shrink)
This essay argues that what is central to Christopher Boorse’s biostatistical theory of disease as statistically subnormal part function (BST) are comparisons of the “functional efficiency” of parts and processes and that statistical considerations serve only to pick out a healthy level of functional efficiency. On this interpretation, the distinction between health and pathology is less important than comparisons of functional efficiency, which are entirely independent of statistical considerations. The clarifications or revisions of the BST that this essay offers are (...) friendly amendments that render moot some of the most prominent criticisms of Boorse’s account. (shrink)
This book shows through argument and numerous policy-related examples how understanding moral philosophy can improve economic analysis, how moral philosophy can benefit from economists' analytical tools, and how economic analysis and moral philosophy together can inform public policy. Part I explores the idea of rationality and its connections to ethics, arguing that when they defend their formal model of rationality, most economists implicitly espouse contestable moral principles. Part II addresses the nature and measurement of welfare, utilitarianism and cost-benefit analysis. Part (...) III discusses freedom, rights, equality, and justice - moral notions that are relevant to evaluating policies, but which have played little if any role in conventional welfare economics. Finally, Part IV explores work in social choice theory and game theory that is relevant to moral decision making. Each chapter includes recommended reading and discussion questions. (shrink)
The tenuous claims of cost-benefit analysis to guide policy so as to promote welfare turn on measuring welfare by preference satisfaction and taking willingness-to-pay to indicate preferences. Yet it is obvious that people's preferences are not always self-interested and that false beliefs may lead people to prefer what is worse for them even when people are self-interested. So welfare is not preference satisfaction, and hence it appears that cost-benefit analysis and welfare economics in general rely on a mistaken theory of (...) well-being. This essay explores the difficulties, criticizes standard defences of welfare economics, and then offers a new partial defence that maintains that welfare economics is independent of any philosophical theory of well-being. Welfare economics requires nothing more than an evidential connection between preference and welfare: in circumstances in which people are concerned with their own interests and reasonably good judges of what will serve their interests, their preferences will be reliable indicators of what is good for them. (shrink)
expose some gaps and difficulties in the argument for the causal Markov condition in our essay ‘Independence, Invariance and the Causal Markov Condition’ (), and we are grateful for the opportunity to reformulate our position. In particular, Cartwright disagrees vigorously with many of the theses we advance about the connection between causation and manipulation. Although we are not persuaded by some of her criticisms, we shall confine ourselves to showing how our central argument can be reconstructed and to casting doubt (...) on Cartwright's claim that the causal Markov condition typically fails when there are indeterministic by-products. Why believe the causal Markov condition? Causation and manipulation The argument Indeterministic by-products and the causal Markov condition The chemical factory counterexample and PM2 Conclusions: causation and manipulability. (shrink)
This essay criticizes the proposal recently defended by a number of prominent economists that welfare economics be redirected away from the satisfaction of people's preferences and toward making people happy instead. Although information about happiness may sometimes be of use, the notion of happiness is sufficiently ambiguous and the objections to identifying welfare with happiness are sufficiently serious that welfare economists are better off using preference satisfaction as a measure of welfare. The essay also examines and criticizes the position associated (...) with Daniel Kahneman and a number of co-authors that takes welfare to be ‘objective happiness’ – that is, the sum of momentary pleasures. (shrink)
The notion of ‘revealed preference’ is unclear and should be abandoned. Defenders of the theory of revealed preference have misinterpreted legitimate concerns about the testability of economics as the demand that economists eschew reference to (unobservable) subjective states. As attempts to apply revealed-preference theory to game theory illustrate with particular vividness, this demand is mistaken.
An anthology of works on the philosophy of economics, including classic texts and essays exploring specific branches and schools of economics. Completely revamped, this edition contains new selections, a revised introduction and a bibliography. The volume contains 26 chapters organized into five parts: Classic Discussions, Positivist and Popperian Views, Ideology and Normative Economics, Branches and Schools of Economics and Their Methodological Problems and New Directions in Economic Methodology. It includes crucial historical contributions by figures such as Mill, Marx, Weber, Robbins, (...) Knight, and Veblen and works by most of the leading contemporary figures writing on economic methodology, including five Nobel Laureates in Economics. (shrink)
This essay attempts to distinguish the pressing issues for economists and economic methodologists concerning realism in economics from those issues that are of comparatively slight importance. In particular I shall argue that issues concerning the goals of science are of considerable interest in economics, unlike issues concerning the evidence for claims about unobservables, which have comparatively little relevance. In making this argument, this essay raises doubts about the two programs in contemporary economic methodology that raise the banner of realism. In (...) particular I argue that the banner makes it more difficult to relate the concerns of those who wave it to those of other methodologists. Although this essay argues that many of the debates in this century between scientific realists and their opponents are not relevant to economics, it does not attack scientific realism, and it does not urge economists or economic methodologists to reject it. (shrink)
This paper explores the relationship between a manipulability conception of causation and the causal Markov condition (CM). We argue that violations of CM also violate widely shared expectations—implicit in the manipulability conception—having to do with the absence of spontaneous correlations. They also violate expectations concerning the connection between independence or dependence relationships in the presence and absence of interventions.
This report by the WHO Consultative Group on Equity and Universal Health Coverage addresses how countries can make fair progress towards the goal of universal coverage. It explains the relevant tradeoffs between different desirable ends and offers guidance on how to make these tradeoffs.
While very much in Sen's camp in rejecting revealed preference theory and emphasizing the complexity, incompleteness, and context dependence of preference and the intellectual costs of supposing that all the factors influencing choice can be captured by a single notion of preference, this essay contests his view that economists should recognize multiple notions of preference. It argues that Sen's concerns are better served by embracing a single conception of preference and insisting on the need for analysis of the multiple factors (...) that determine ‘preference’ so conceived. (shrink)
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.
There are simple mechanical systems that elude causal representation. We describe one that cannot be represented in a single directed acyclic graph. Our case suggests limitations on the use of causal graphs for causal inference and makes salient the point that causal relations among variables depend upon details of causal setups, including values of variables.
Preferences are the central notion in mainstream economic theory, yet economists say little about what preferences are. This article argues that preferences in mainstream positive economics are comparative evaluations with respect to everything relevant to value or choice, and it argues against three mistaken views of preferences: that they are matters of taste, concerning which rational assessment is inappropriate, that preferences coincide with judgments of expected self-interested benefit, and that preferences can be defined in terms of choices.
This paper argues that egalitarian theories should be judged by the degree to which they meet four different challenges. Fundamentalist egalitarianism, which contends that certain inequalities are intrinsically bad or unjust regardless of their consequences, fails to meet these challenges. Building on discussions by T.M. Scanlon and David Miller, we argue that egalitarianism is better understood in terms of commitments to six egalitarian objectives. A consequence of our view, in contrast to Martin O'Neill's “non-intrinsic egalitarianism,“ is that egalitarianism is better (...) understood as a family of views than as a single ethical position. (shrink)
This essay examines the critique of behavioral economics that Infante, Lecouteaux and Sugden offer in:"Preference Purification and the Inner Rational Agent.” It identifies and questions three main criticisms that ILS make: a methodological criticism, alleging that there is no psychological basis for the attribution of purified preferences, an epistemological criticism, alleging that there is little evidence for claims about purified preferences, and a normative criticism, arguing that policies should aim to facilitate people’s choices rather than to satisfy purified preferences. The (...) essay also distinguishes the view of welfare economics defended in Preference, Value, Choice, and Welfare from the claims of behavioral economists ILS criticize. (shrink)
The literature on causation distinguishes between causal claims relating properties or types and causal claims relating individuals or tokens. Many authors maintain that corresponding to these two kinds of causal claims are two different kinds of causal relations. Whether to regard causal relations among variables as yet another variety of causation is also controversial. This essay maintains that causal relations obtain among tokens and that type causal claims are generalizations concerning causal relations among these tokens.
This collection brings together the essays of one of the foremost American philosophers of economics. Cumulatively they offer fresh perspectives on foundational questions such as: what sort of science is economics? and how successful can economists be in acquiring knowledge of their subject matter?
This paper explores versions of agency or manipulability theories of causation and argues that they are unacceptable both for the well-known reasons of their anthropomorphism, limited scope, and circularity and because they are subsumed by an alternative "independence" theory of causation, which is free of these difficulties.
This is a brief response to ‘Do not despair about severity—yet’ by Barra et al. It argues that they have no serious criticisms of Daniel Hausman’s essay, ‘The Significance of Severity’” and that indeed their work lends further support to his view that there is no justification for prioritising severity. As policy-akers, Barra and his coauthors are more constrained by popular attitudes, which apparently favour prioritising severity.
This comment argues that there is an explanation paradox in economics, as Julian Reiss maintains, only if models in economics succeed in explaining even though they are not approximately true, fail to identify the causes of what they purport to explain, and misdescribe the mechanism by which the causes lead to the effects to be explained. Reiss provides no reason to believe that models that do not describe the causes and mechanisms at work are nevertheless explanatory.
This essay comments on the theory of social norms developed by Cristina Bicchieri in The Grammar of Society. It applauds her theory of norms but argues that it cannot account for the experimental results concerning ultimatum games. A theory of fairness is also needed. It develops a number of specific criticisms of her way of incorporating the influence of norms into preferences. †To contact the author, please write to: Department of Philosophy, University of Wisconsin–Madison, 5197 Helen C. White Hall, 600 (...) N. Park Street, Madison, WI 53706‐1474; e‐mail: email@example.com. (shrink)
: This essay distinguishes between two kinds of group harms: harms to individuals in virtue of their membership in groups and harms to "structured" groups that have a continuing existence, an organization, and interests of their own. Genetic research creates risks of causing both kinds of group harms, and engagement with the groups at risk can help to mitigate those harms. The two kinds of group harms call for different kinds of group engagement.
This essay responds to the helpful criticisms of Valuing Health: Well-Being, Freedom, and Suffering, which have been offered by Elselijn Kingma, Adam Oliver, Anna Alexandrova, Alex Voorhoeve, Erik Nord and James Wilson. I am extremely grateful to Jonathan Wolf and especially James Wilson for arranging a one-day conference on my book, Valuing Health: Well-Being, Freedom, and Suffering [Hausman, D.. Valuing Health: Well-Being, Freedom, and Suffering. Oxford: Oxford University Press.], and for publishing this symposium. I am also grateful to the wonderful (...) six scholars who took the time to study my work and to offer perceptive and helpful criticisms. Without unduly trying the patience of readers, I cannot respond to all their remarks, but I hope that in what follows I have replied to the most important of their comments on the arguments and conclusions of Valuing Health. Before I begin these replies, a brief synopsis of Valuing Health may be helpful to the reader. (shrink)
John Stuart Mill regards economics as an inexact and separate science which employs a deductive method. This paper analyzes and restates Mill's views and considers whether they help one to understand philosophical peculiarities of contemporary microeconomic theory. The author concludes that it is philosophically enlightening to interpret microeconomics as an inexact and separate science, but that Mill's notion of a deductive method has only a little to contribute.
In ordinary circumstances, human actions have a myriad of unintended and often unforeseen consequences for the lives of other people. Problems of pollution are serious examples, but spillovers and side effects are the rule, not the exception. Who knows what consequences this essay may have? This essay is concerned with the problems of justice created by spillovers. After characterizing such spillovers more precisely and relating the concept to the economist's notion of an externality, I shall then consider the moral conclusions (...) concerning spillovers that issue from a natural rights perspective and from the perspective of welfare economics supplemented with theories of distributive justice. I shall argue that these perspectives go badly awry in taking spillovers to be the exception rather than the rule in human interactions. I. Externalities Economists have discussed spillovers under the heading of “externalities.” To say this is not very helpful, since there is so much disagreement concerning both the definition and significance of externalities. (shrink)
: This commentary distinguishes five reasons why one might want to conduct a survey concerning people's beliefs about death and the permissibility of harvesting organs: (1) simply to learn what people know and want; (2) to determine if current law and practice conform to the wishes of the population; (3) to determine the level of popular support for or opposition to policy changes; (4) to ascertain the causes and effects of popular beliefs and attitudes; and (5) to provide guidance in (...) determining which laws and practices are ethical. The commentary expresses qualms about how well surveys in general can perform with respect to the fifth objective, and it provides specific reasons to doubt whether this survey is informative from the perspective of a moral philosopher concerned with the nature of death and the contours of a permissible system of organ procurement. (shrink)
People condemn inequalities for many reasons. For example, many who have no concern with distribution per se criticize inequalities in health care, because these inequalities lessen the benefits provided by the resources that are devoted to health care. Others who place no intrinsic value on distribution believe that a just society must show a special concern for those who are worst off. Some people, on the other hand, do place an intrinsic value on equality of distribution, regardless of its contribution (...) to other goals. Derek Parfit and Larry Temkin call these people "egalitarians." I shall always employ quotation marks when referring to "egalitarians" in this special sense, because, as I shall argue, this terminology is misleading. One of its unhappy implications is that almost all egalitarians are not "egalitarians.". (shrink)