It is useful to divide philosophy of economics in this way into three subject matters which can be regarded respectively as branches ofaction theory,ethics (or normative social and political philosophy), andphilosophy of science. Economic theories ofrationality,welfare, andsocial choice defend substantive philosophical theses often informed by relevant philosophical literature and of evident interest to those interested in action theory, philosophical psychology, and social and political philosophy.
Economics is of special interest to those interested inepistemology and philosophy of science both because of its detailed peculiarities and because it has many of the overt features of thenatural sciences, while its object consists ofsocial phenomena.[2] In any empirical setting, the epistemic assumptions offinancial economics (and related applied financial disciplines) are relevant,[3][4] and are further discussed under theEpistemology of finance.
The question usually addressed in any subfield of philosophy (the philosophy ofX) is "what isX?". A philosophical approach to the question "what is economics?" is less likely to produce an answer than it is to produce a survey of the definitional and territorial difficulties and controversies. Similar considerations apply as a prologue to further discussion ofmethodology in a subject.Definitions of economics have varied over time from the modern origins of the subject, reflecting programmatic concerns and distinctions of expositors.[5]
Ontological questions continue with further "what is..." questions addressed at fundamental economic phenomena, such as "what is (economic) value?" or "what is a market?". While it is possible to respond to such questions with real verbal definitions, the philosophical value of posing such questions actually aims at shifting entire perspectives as to the nature of the foundations of economics. In the rare cases that attempts at ontological shifts gain wide acceptance, their ripple effects can spread throughout the entire field of economics.[6]
Anepistemology deals with how weknow things. In the philosophy of economics this means asking questions such as: what kind of a "truth claim" is made by economic theories – for example, are we claiming that the theories relate toreality or perceptions? How can or should we prove economic theories – for example, must every economic theory be empirically verifiable? How exact are economic theories and can they lay claim to the status of an exact science – for example, are economic predictions as reliable as predictions in the natural sciences, and why or why not? Another way of expressing this issue is to ask whether economic theories can state "laws". Philosophers of science and economists have explored these issues intensively since the work ofAlexander Rosenberg andDaniel M. Hausman dating to 3 decades ago.[7]
Philosophical approaches in decision theory focus on foundational concepts in decision theory – for example, on the natures ofchoice orpreference,rationality,risk anduncertainty, and economic agents.[8]Game theory is shared between a number of disciplines, but especiallymathematics,economics andphilosophy. Game theory is still extensively discussed within the field of the philosophy of economics. Game theory is closely related to and builds on decision theory and is likewise very strongly interdisciplinary.[9]
The ethics of economic systems deals with the issues such as how it is right (just, fair) to keep ordistribute economic goods.Economic systems as a product of collective activity allow examination of their ethical consequences for all of their participants.Ethics and economics relates ethical studies towelfare economics.[10] It has been argued that a closer relation between welfare economics and modern ethical studies may enrich both areas, even including predictive and descriptive economics as to rationality of behaviour, given social interdependence.[11]
Utilitarianism, one of the ethical methodologies, has its origins inextricably interwoven with theemergence of modern economic thought. Today utilitarianism has spread throughout applied ethics as one of a number of approaches. Non-utilitarian approaches in applied ethics are also now used when questioning the ethics of economic systems – e.g. rights-based (deontological) approaches.[16]
Manypolitical ideologies have been an immediate outgrowth of reflection on the ethics of economic systems.Marx, for example, is generally regarded primarily as a philosopher, his most notable work being on the philosophy of economics. However, Marx's economic critique of capitalism did not depend on ethics, justice, or any form of morality, instead focusing on the inherent contradictions of capitalism through the lens of a process which is today calleddialectical materialism.
The philosophy of economics defines itself as including the questioning of foundations or assumptions of economics. The foundations and assumption of economics have been questioned from the perspective of noteworthy but typically under-represented groups. These areas are therefore to be included within the philosophy of economics.
Cross-cultural perspectives on economics, andeconomic anthropology: an example is theBuddhist-inspiredBhutanese "Gross National Happiness" concept (suggested as a better development measure than GNI/GDP).Amartya Sen is a renowned advocate for the integration of cross-cultural phenomena into economic thinking.[19]
Theethics of economic systems is an area of overlap betweenbusiness ethics and the philosophy of economics. People who write on the ethics of economic systems are more likely to call themselvespolitical philosophers thanbusiness ethicists oreconomic philosophers. There is significant overlap between theoretical issues ineconomics and the philosophy of economics. As economics is generally accepted to have its origins in philosophy, thehistory of economics overlaps with the philosophy of economics.
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D. Wade Hands (2008). "philosophy and economics",The New Palgrave Dictionary of Economics, 2nd Edition.Abstract.
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_____ (1983). "If Economics Isn't Science, What Is It?"Philosophical Forum, 14, pp. 296–314.
_____ (1986). "What Rosenberg's Philosophy of Economics Is Not",Philosophy of Science, 53(1), pp. 127–132.JSTOR187927
Douglas W. Hands (1984). "What Economics Is Not: An Economist's Response to Rosenberg",Philosophy of Science, 51(3), pp. 495–503.JSTOR187496
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Daniel M. Hausman (1980). "How to Do Philosophy of Economics",PSA: Proceedings of the Biennial Meeting of the Philosophy of Science Association, 1, pp. 353–362.JSTOR192578
_____ (1983). "The Limits of Economic Science", inThe Limits of Lawfulness: Studies on the Scope and Nature of Scientific Knowledge, N. Rescher, ed. Reprinted in D.M. Hausman (1992Essays on Philosophy and Economic Methodology, pp.99–108.
Daniel M. Hausman (1989). "Economic Methodology in a Nutshell",Journal of Economic Perspectives, 3(2), pp.115–127.
_____ (2008). "experimental economics",The New Palgrave Dictionary of Economics, 2nd Edition,Abstract.
Francesco Guala (2005).The Methodology of Experimental Economics, Cambridge. Description/contentslinks and ch. 1excerpt.Archived 2012-09-17 at theWayback Machine
^Paul Anand (1993, 1995). "Foundations of Rational Choice Under Risk". Oxford. Oxford University Press.
Amartya K. Sen (1970 [1984]).Collective Choice and Social Welfare. Elsevier.
Daniel M. Hausman and Michael S. McPherson (1993). "Taking Ethics Seriously: Economics and Contemporary Moral Philosophy",Journal of Economic Literature, 31(2), pp.671–731.
_____ ([1994] 2005), 2nd Ed.Economic Analysis and Moral Philosophy. Cambridge University Press.
Hal R. Varian (1975). "Distributive Justice, Welfare Economics, and the Theory of Fairness",Philosophy & Public Affairs 4(3), pp. 223–247.JSTOR2265084
^Amartya Sen (1987).On Ethics and Economics, Blackwell.
^Amartya Sen (1990). "Justice: Means versus Freedoms,"Philosophy & Public Affairs, 19(2), pp.111-121.
^In theJournal of Economic Literature classification codes atJEL: D63, wedged on the same line between 'Equity' and 'Inequality'.
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_____ (2002).The Collapse of the Fact/Value Dichotomy and Other Essays,Description and chapter-previewlinks.
