Rationalism and mainstream economics

It is generally agreed that mainstream economics follows John Stuart Mill's economic methodology. Since Mill's deductivist methodology was explicitly anti-empirical, this raises the question of to what degree economics is an empirical science. To help answer this question, Gerald Holton's notion of themata is introduced. Themata are ideas and intuitions that influence scientists in their investigations that are based neither on empirical observation nor deductive reasoning, and so are often overlooked by empiricists. The question can then be posed as follows: when empirical data conflict with themata, do economists privilege the former or the latter - do they privilege experience or intuition? It is argued that there are documented instances of research programs in which intuition is privileged over experience. From this it is concluded that economists follow two methodologies: an empiricist methodology and a rationalist methodology. The question of which methodology is more frequently employed is a matter for subsequent empirical research.methodology, deductivism, rationalism, intuition, themata, John Stuart Mill,

Rationality as optimal choice versus rationality as valid inference

While economics distinguishes itself from the other social sciences by its treatment of human action as rational, its notion of rationality is actually based on a profound skepticism about people's ability to reason. This notion goes back to Hume, according to whom 'Reason is the slave of the passions'. Hume's belief that people cannot determine their preferences by reasoning led to the notion of rationality based on representation: people are rational when they are able to represent their preferences vividly, accurately gauging their intensity. Starting with Kant, philosophy moved to an understanding of rationality as valid inference; cognitive psychologists similarly speak of the superiority of the 'reason-based' model of choice over the economic 'value-based' one. Economics stayed with Hume's conception because the latter enabled the mathematical expression of a relation between scarcities. If it is to produce empirically adequate theories however, economics must follow the examples of philosophy and psychology.Rationality, Choice, Empiricism, Reasoning, Inference, Hume, Kant,

The Market as an Environment

More than perhaps any other major social theorist, Niklas Luhmann adopted a perspective on society at the opposite end of the atomistic-holistic spectrum to that of mainstream economics. While the position of mainstream economics is that society is nothing more than a collection of individuals, so that it can be understood simply in terms of those individuals and their interactions, Luhmann abstracts from individuals entirely, understanding social phenomena as being produced by society itself, with individuals playing a merely peripheral or enabling role. This radical reconceptualization of society and the relation of the individual to society allowed Luhmann to build from the ground up a highly systematic theory of society which allows one to formulate economic and social questions in new ways, freed from preconceptions that are poorly grounded or simply wrong. After providing a brief overview of Luhmanns general social theory, this article considers two questions for which Luhmanns theory can produce a fresh point of view. The first concerns what is the nature of markets. According to Luhmann, markets are not a kind of system (the common if tacit view), but collections of observations--the observations of market participants of other market participants. The second concerns the old question of what is the appropriate degree of intervention in the economy. Mainstream economics approaches this problem through the distinction between (free) markets and planning. According to Luhmann, this is a false dichotomy, since all economies have markets and planning. The real question is who should do the planning: private organizations or the state. The former operate on the basis of competition, that is, rivalry; the latter operates on the basis of cooperation. The problem with socialist or centrally planned economies was not that they were planned or centrally organized, since free market economies have planning and centralization too; it was that they relied solely on cooperation, with there being no space for competition. The paper concludes with some reflections on whether freemarket economies with minimal intervention by the state are any more sustainable than are socialist economies.Niklas Luhmann, peut-être plus que les autres auteurs en théorie sociale, a adopté une approche de la société qui est à lopposé du spectre individualismeholisme des économistes orthodoxes. Alors que léconomie orthodoxe considère que la société nest rien dautre que la somme des individus et quelle ne peut être appréhendée quen termes dindividus et de leurs interactions, Luhmann fait totalement abstraction des individus et comprend les phénomènes sociaux comme étant produits par la société elle-même dans laquelle les individus jouent un rôle périphérique ou un rôle dhabilitation. Cette radicale reconceptualization de la société ainsi que la relation des individus à la société a permis à Luhmann de construire une théorie très méthodique de la société qui permet dappréhender de façon différente les questions économiques et sociales, sans préreprésentations fragiles ou erronées. Après avoir donné un aperçu général de la théorie sociale de Luhmann, larticle considère deux questions pour lesquelles la théorie de Luhmann peut apporter un nouveau point de vue. La première traite de la nature des marchés. Daprès Luhmann, les marchés ne sont pas une sorte de système (comme cela est souvent considéré) mais des sommes dobservations faites par les participants au marché sur les autres participants. La seconde question concerne léternel problème du degré dinterventionnisme dans léconomie. Les économistes orthodoxes abordent cette question à travers la distinction entre les marchés (libres) et la planification. Daprès Luhmann cette dichotomie est erronée dans la mesure où toutes les économies connaissent à la fois le marché et la planification. La véritable question est: Qui devrait planifier: les organisations privées ou lEtat?. Les premières agissent sur la base de la concurrence, i.e de la rivalité; lEtat agit sur la base de la coopération. Le problème avec les économies socialistes ou centralement planifiées nest pas quelles sont planifiées ou quelles relèvent dune organisation centralisée puisque les économies de marché libre connaissent aussi la planification et la centralisation. Le problème vient du fait quelles reposent uniquement sur la coopération et naccordent pas de place à la concurrence. Le papier conclut en sinterrogeant sur lidée selon laquelle les économies de libre marché avec une intervention étatique minimale sont plus viables que les économies socialistes.

Searle's Background: comments on Runde and Faulkner

Searle's notion of the Background, a set of non-intentional mental states which makes intentionality possible, is receiving increasing interest from social theorists. This paper points out two commitments that the notion entails of which social theorists should be wary. The first is Searle's belief that 'Background abilities are not dependent on how things in fact work in the world'. This position is highly counter-intuitive - a person's ability to drive results from her having spent time operating automobiles - and derives from Searle's position, also implausible, that the content of a thought is independent of the object that that thought is about. The second is that invoking the Background is required in order to explain human behaviour which is inconsistent with utility theory: that position is unconvincing once one realizes that it is possible to conceive of rationality on lines alternative to those of utility maximization - as valid inference.Intentionality, Rationality, John Searle, John Mcdowell,