ECON BC3063 (01) Senior Seminar: Economic and Other Reasons

Instructor: André Burgstaller, Fall 2004

The seminar examines three basic issues at the intersection of economics and philosophy. In each instance the goal is to grapple with an aspect of the following question: Where on the continuum of realms of human knowledge--ranging from logic and mathematics, through basic science and evolutionary biology, to psychology, ethics, and the philosophy of mind--must we think of economics as making its contribution?

1. Economic and other reasons
Unlike chimpanzees, human beings are capable of being motivated by impersonal reasons, that is, by reasons that, though represented in the mind, are entirely divorced from subjective inclinations and desires. This human capacity is most vividly exemplified by our commitment to truth in the beliefs we hold and our commitment to coherence in the use we make of language and its meanings. We stick to such commitments irrespective of their consequences--other than the unpleasant consequence that we quickly cease to be treated as an autonomous human agent should we decide to abandon them. It follows that the instrumental conception of human rationality descended to us from Hume ("Reason is and ought to be the slave of the passions") and adopted by modern economics does not exhaust human rationality. The latter's core is not instrumental, but substantive: it governs our commitments and adjudicates conflicts between our commitments and our inclinations.

2. Social and economic ontology
In seeking knowledge about society or the economy we always start from a set of categories that label the entities we take as populating the social and economic realm. Typically, these entities differ from those postulated in other, seemingly contiguous or overlapping, fields of knowledge, such as chemistry, biology, population genetics, neuroscience, psychology, or philosophy of mind. This leads to the problem of the reducibility of ontological or explanatory categories across knowledge realms. Consider the following issues:

a) How, in a world of brute and mind-independent natural facts (involving hydrogen atoms, tectonic plates, bacteria, and galaxies) can there exist a mind-dependent, yet objective reality of social and economic facts (involving money, property, prices, marriages, cocktail parties, and France)? That is, how can there be social facts accessible to knowledge in the same objective manner as natural facts, yet whose existence depends entirely in our thinking them to be facts?

b) Are social and economic phenomena actually reducible to individual states of mind, as implied by the preceding question? This will be so if and only if we can characterize the state of mind of an individual without any reference to a social category. If as seems likely we cannot do so, the door is opened to an alternative social ontology which consists of entities such as group minds (Hegel), social classes (Marx), and collective representations (Durkheim) that are not reducible to psychological categories.

3. Free will
Whether it is theoretical (oriented towards true beliefs) or practical (oriented towards coherent action), reasoning always presupposes free will. This means that reasons generate norms, but do not suffice to cause an effect in the form of a belief or an action. Instead, what happens is that we first deliberate and then freely act on (or do not act on) a reason. This immediately raises two issues:

a) Since prediction presupposes law-like regularity of cause and effect, and assuming now that economic events are indeed reducible to individual minds engaged in reasoning, how can economic events be predicted? If they cannot be predicted, what is the role of economic theory? Is that role perhaps normative rather than positive? If so, observed empirical regularities in economic life would be traceable to the growing incorporation into overall human rationality of norms of ideal economic reasoning as articulated in economic theory.

b) Suppose our universe is causally closed, either deterministically or stochastically so: Must this not preclude free will, hence rationality? Answering in the affirmative, some philosophers argue that free-will-cum-rationality merely constitutes an evolutionarily adaptive "stance" we have adopted for its instrumental usefulness in predicting individual and social behavior, given that the causal explanation of such behavior is beyond us. This argument links up with a long-standing instrumentalist position in the philosophy of economics, and we will want to ask whether such instrumentalism is coherent.