Philosophy and economics studies topics such as

public economics Public economics ''(or economics of the public sector)'' is the study of government policy through the lens of economic efficiency and equity. Public economics builds on the theory of welfare economics and is ultimately used as a tool to improve ...

rationality Rationality is the quality of being guided by or based on reasons. In this regard, a person acts rationally if they have a good reason for what they do or a belief is rational if it is based on strong evidence. This quality can apply to an ab ...

justice Justice, in its broadest sense, is the principle that people receive that which they deserve, with the interpretation of what then constitutes "deserving" being impacted upon by numerous fields, with many differing viewpoints and perspective ...

history of economic thought History (derived ) is the systematic study and the documentation of the human activity. The time period of event before the invention of writing systems is considered prehistory. "History" is an umbrella term comprising past events as well ...

, rational choice, the appraisal of economic outcomes, institutions and processes, the status of highly idealized economic models, the

ontology In metaphysics, ontology is the philosophy, philosophical study of being, as well as related concepts such as existence, Becoming (philosophy), becoming, and reality. Ontology addresses questions like how entities are grouped into Category ...

of economic phenomena and the possibilities of acquiring knowledge of them. It is useful to divide philosophy of economics in this way into three subject matters which can be regarded respectively as branches of action theory,

ethics Ethics or moral philosophy is a branch of philosophy that "involves systematizing, defending, and recommending concepts of right and wrong behavior".''Internet Encyclopedia of Philosophy'' The field of ethics, along with aesthetics, concer ...

(or normative social and political philosophy), and

philosophy of science Philosophy of science is a branch of philosophy concerned with the foundations, methods, and implications of science. The central questions of this study concern what qualifies as science, the reliability of scientific theories, and the ultim ...

. Economic theories of

welfare Welfare, or commonly social welfare, is a type of government support intended to ensure that members of a society can meet basic human needs such as food and shelter. Social security may either be synonymous with welfare, or refer specifical ...

, and social 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 Economics () is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics anal ...

is of special interest to those interested in

epistemology Epistemology (; ), or the theory of knowledge, is the branch of philosophy concerned with knowledge. Epistemology is considered a major subfield of philosophy, along with other major subfields such as ethics, logic, and metaphysics. Epi ...

and philosophy of science both because of its detailed peculiarities and because it has many of the overt features of the

natural science Natural science is one of the branches of science concerned with the description, understanding and prediction of natural phenomena, based on empirical evidence from observation and experimentation. Mechanisms such as peer review and repeatab ...

s, while its object consists of social phenomena.

Scope

Definition and ontology of economics

The question usually addressed in any subfield of philosophy (the philosophy of ''X'') is "what is ''X''?" 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 of

methodology In its most common sense, methodology is the study of research methods. However, the term can also refer to the methods themselves or to the philosophical discussion of associated background assumptions. A method is a structured procedure for br ...

in a subject. Definitions of economics have varied over time from the modern origins of the subject, reflecting programmatic concerns and distinctions of expositors. 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.

Methodology and epistemology of economics

deals with how we ''know'' things. In the philosophy of economics this means asking questions such as: what kind of a "

truth Truth is the property of being in accord with fact or reality.Merriam-Webster's Online Dictionarytruth 2005 In everyday language, truth is typically ascribed to things that aim to represent reality or otherwise correspond to it, such as belief ...

claim" is made by economic theories – for example, are we claiming that the theories relate to

reality Reality is the sum or aggregate of all that is real or existent within a system, as opposed to that which is only imaginary. The term is also used to refer to the ontological status of things, indicating their existence. In physical terms, re ...

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 of

Alexander Rosenberg Alexander Rosenberg (who generally publishes as "Alex") is an American philosopher and novelist. He is the R. Taylor Cole Professor of Philosophy at Duke University, well known for contributions to philosophy of biology and philosophy of econom ...

and Daniel M. Hausman dating to 3 decades ago.

Rational choice, decision theory and game theory

Philosophical approaches in decision theory focus on foundational concepts in decision theory – for example, on the natures of choice or

preference In psychology, economics and philosophy, preference is a technical term usually used in relation to choosing between alternatives. For example, someone prefers A over B if they would rather choose A than B. Preferences are central to decision th ...

risk In simple terms, risk is the possibility of something bad happening. Risk involves uncertainty about the effects/implications of an activity with respect to something that humans value (such as health, well-being, wealth, property or the environm ...

and

uncertainty Uncertainty refers to epistemic situations involving imperfect or unknown information. It applies to predictions of future events, to physical measurements that are already made, or to the unknown. Uncertainty arises in partially observable ...

, and economic agents. Game theory is shared between a number of disciplines, but especially

mathematics Mathematics is an area of knowledge that includes the topics of numbers, formulas and related structures, shapes and the spaces in which they are contained, and quantities and their changes. These topics are represented in modern mathematics ...

economics Economics () is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work. Microeconomics anal ...

and

philosophy Philosophy (from , ) is the systematized study of general and fundamental questions, such as those about existence, reason, knowledge, values, mind, and language. Such questions are often posed as problems to be studied or resolved. ...

. 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.

Ethics and justice

The ethics of economic systems deals with the issues such as how it is right (just, fair) to keep or distribute 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 to welfare economics. 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 behavior, given social interdependence. Ethics and justice overlap disciplines in different ways. Approaches are regarded as more philosophical when they study the fundamentals – for example, John Rawls' ''

A Theory of Justice ''A Theory of Justice'' is a 1971 work of political philosophy and ethics by the philosopher John Rawls (1921-2002) in which the author attempts to provide a moral theory alternative to utilitarianism and that addresses the problem of distrib ...

'' (1971) and

Robert Nozick Robert Nozick (; November 16, 1938 – January 23, 2002) was an American philosopher. He held the Joseph Pellegrino University Professorship at Harvard University,

's '' Anarchy, State and Utopia'' (1974). 'Justice' in economics is a subcategory of welfare economics with models frequently representing the ethical-social

requirements In product development and process optimization, a requirement is a singular documented physical or functional need that a particular design, product or process aims to satisfy. It is commonly used in a formal sense in engineering design, inclu ...

of a given theory. "Practical" matters include such subjects as law and

cost–benefit analysis Cost–benefit analysis (CBA), sometimes also called benefit–cost analysis, is a systematic approach to estimating the strengths and weaknesses of alternatives. It is used to determine options which provide the best approach to achieving benefits ...

Utilitarianism In ethical philosophy, utilitarianism is a family of normative ethical theories that prescribe actions that maximize happiness and well-being for all affected individuals. Although different varieties of utilitarianism admit different chara ...

, one of the ethical methodologies, has its origins inextricably interwoven with the emergence 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 In moral philosophy, deontological ethics or deontology (from Greek: + ) is the normative ethical theory that the morality of an action should be based on whether that action itself is right or wrong under a series of rules and principles, ...

) approaches. Many political 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 called dialectical materialism.

Non-mainstream economic thinking

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. * Praxeology: a deductive theory of human action based on premises presumed to be philosophically true (following the analytic–synthetic distinction of

Immanuel Kant Immanuel Kant (, , ; 22 April 1724 – 12 February 1804) was a German philosopher and one of the central Enlightenment thinkers. Born in Königsberg, Kant's comprehensive and systematic works in epistemology, metaphysics, ethics, and ...

). Developed by

Ludwig von Mises Ludwig Heinrich Edler von Mises (; 29 September 1881 – 10 October 1973) was an Austrian School economist, historian, logician, and sociologist. Mises wrote and lectured extensively on the societal contributions of classical liberalism. He is ...

within the

Austrian School The Austrian School is a heterodox school of economic thought that advocates strict adherence to methodological individualism, the concept that social phenomena result exclusively from the motivations and actions of individuals. Austrian scho ...

, is a self-conscious opposition to the mathematical modeling and hypothesis-testing to validate neoclassical economics. * Cross-cultural perspectives on economics, and economic anthropology: an example is the

Buddhist Buddhism ( , ), also known as Buddha Dharma and Dharmavinaya (), is an Indian religion or philosophical tradition based on teachings attributed to the Buddha. It originated in northern India as a -movement in the 5th century BCE, and ...

-inspired

Bhutan Bhutan (; dz, འབྲུག་ཡུལ་, Druk Yul ), officially the Kingdom of Bhutan,), is a landlocked country in South Asia. It is situated in the Eastern Himalayas, between China in the north and India in the south. A mountainou ...

ese "

Gross National Happiness Gross National Happiness (GNH), sometimes called Gross Domestic Happiness (GDH), is a philosophy that guides the government of Bhutan. It includes an index which is used to measure the collective happiness and well-being of a population. Gross Na ...

" concept (suggested as a better development measure than GNI/GDP).

Amartya Sen Amartya Kumar Sen (; born 3 November 1933) is an Indian economist and philosopher, who since 1972 has taught and worked in the United Kingdom and the United States. Sen has made contributions to welfare economics, social choice theory, economi ...

is a renowned advocate for the integration of cross-cultural phenomena into economic thinking. * Feminist perspectives on economics, or

feminist economics Feminist economics is the critical study of economics and economies, with a focus on gender-aware and inclusive economic inquiry and policy analysis. Feminist economic researchers include academics, activists, policy theorists, and practitio ...

Scholars cited in the literature

Aristotle Aristotle (; grc-gre, Ἀριστοτέλης ''Aristotélēs'', ; 384–322 BC) was a Greek philosopher and polymath during the Classical period in Ancient Greece. Taught by Plato, he was the founder of the Peripatetic school of ...

Kenneth Arrow Kenneth Joseph Arrow (23 August 1921 – 21 February 2017) was an American economist, mathematician, writer, and political theorist. He was the joint winner of the Nobel Memorial Prize in Economic Sciences with John Hicks in 1972. In economi ...

* Roger E. Backhouse *

Ken Binmore Kenneth George "Ken" Binmore, (born 27 September 1940) is an English mathematician, economist, and game theorist, a Professor Emeritus of Economics at University College London (UCL) and a Visiting Emeritus Professor of Economics at the Unive ...

* Kevin Carson *

Milton Friedman Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and the ...

Frank Hahn Frank Horace Hahn FBA (26 April 1925 – 29 January 2013) was a British economist whose work focused on general equilibrium theory, monetary theory, Keynesian economics and critique of monetarism. A famous problem of economic theory, the condi ...

Friedrich Hayek Friedrich August von Hayek ( , ; 8 May 189923 March 1992), often referred to by his initials F. A. Hayek, was an Austrian–British economist, legal theorist and philosopher who is best known for his defense of classical liberalism. Hayek ...

* Martin Hollis * Daniel M. Hausman * Terence Wilmot Hutchison *

David Hume David Hume (; born David Home; 7 May 1711 NS (26 April 1711 OS) – 25 August 1776) Cranston, Maurice, and Thomas Edmund Jessop. 2020 999br>David Hume" '' Encyclopædia Britannica''. Retrieved 18 May 2020. was a Scottish Enlightenment ph ...

* John Neville Keynes *

John Maynard Keynes John Maynard Keynes, 1st Baron Keynes, ( ; 5 June 1883 – 21 April 1946), was an English economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. Originally trained in ...

Tony Lawson Tony Lawson is a British philosopher and economist. He is professor of economics and philosophy in the Faculty of Economics at the University of Cambridge. He is a co-editor of the ''Cambridge Journal of Economics'', a former director of the Uni ...

John Locke John Locke (; 29 August 1632 – 28 October 1704) was an English philosopher and physician, widely regarded as one of the most influential of Enlightenment thinkers and commonly known as the "father of liberalism". Considered one of ...

* Uskali Mäki *

Thomas Robert Malthus Thomas Robert Malthus (; 13/14 February 1766 – 29 December 1834) was an English cleric, scholar and influential economist in the fields of political economy and demography. In his 1798 book '' An Essay on the Principle of Population'', M ...

Karl Marx Karl Heinrich Marx (; 5 May 1818 – 14 March 1883) was a German philosopher, economist, historian, sociologist, political theorist, journalist, critic of political economy, and socialist revolutionary. His best-known titles are the 1848 ...

John Stuart Mill John Stuart Mill (20 May 1806 – 7 May 1873) was an English philosopher, political economist, Member of Parliament (MP) and civil servant. One of the most influential thinkers in the history of classical liberalism, he contributed widely to ...

Pierre-Joseph Proudhon Pierre-Joseph Proudhon (, , ; 15 January 1809, Besançon – 19 January 1865, Paris) was a French socialist,Landauer, Carl; Landauer, Hilde Stein; Valkenier, Elizabeth Kridl (1979) 959 "The Three Anticapitalistic Movements". ''European Socia ...

* John E. Roemer * Murray Rothbard * John Rawls *

Lionel Robbins Lionel Charles Robbins, Baron Robbins, (22 November 1898 – 15 May 1984) was a British economist, and prominent member of the economics department at the London School of Economics (LSE). He is known for his leadership at LSE, his proposed de ...

Joan Robinson Joan Violet Robinson (''née'' Maurice; 31 October 1903 – 5 August 1983) was a British economist well known for her wide-ranging contributions to economic theory. She was a central figure in what became known as post-Keynesian economics. ...

* Paul Samuelson * E. F. Schumacher *

* Brian Skyrms *

Adam Smith Adam Smith (baptized 1723 – 17 July 1790) was a Scottish economist and philosopher who was a pioneer in the thinking of political economy and key figure during the Scottish Enlightenment. Seen by some as "The Father of Economics"——� ...

Max Weber Maximilian Karl Emil Weber (; ; 21 April 186414 June 1920) was a German sociologist, historian, jurist and political economist, who is regarded as among the most important theorists of the development of modern Western society. His ideas p ...

Carl Menger Carl Menger von Wolfensgrün (; ; 28 February 1840 – 26 February 1921) was an Austrian economist and the founder of the Austrian School of economics. Menger contributed to the development of the theories of marginalism and marginal utility ...

Bernard Williams Sir Bernard Arthur Owen Williams, FBA (21 September 1929 – 10 June 2003) was an English moral philosopher. His publications include ''Problems of the Self'' (1973), ''Ethics and the Limits of Philosophy'' (1985), ''Shame and Necessity'' ...

Related disciplines

The ''ethics of economic systems'' is an area of overlap between business ethics and the philosophy of economics. People who write on the ethics of economic systems are more likely to call themselves ''

political philosophers This is a list of notable political philosophers, including some who may be better known for their work in other areas of philosophy. The entries are in order by year of birth to show rough direction of influences and of development of political ...

'' than ''business ethicists'' or ''economic philosophers''. There is significant overlap between theoretical issues in

and the philosophy of economics. As economics is generally accepted to have its origins in philosophy, the history of economics overlaps with the philosophy of economics.

Degrees

Some universities offer joint degrees that combine philosophy, politics and economics. These degrees cover many of the problems that are discussed in Philosophy and Economics, but are more broadly construed. A small number of universities, notably the

London School of Economics , mottoeng = To understand the causes of things , established = , type = Public research university , endowment = £240.8 million (2021) , budget = £391.1 milli ...

University of Edinburgh The University of Edinburgh ( sco, University o Edinburgh, gd, Oilthigh Dhùn Èideann; abbreviated as ''Edin.'' in post-nominals) is a public research university based in Edinburgh, Scotland. Granted a royal charter by King James VI in 1 ...

, the Erasmus University Rotterdam,

Copenhagen Business School Copenhagen Business School (Danish'': Handelshøjskolen i København'') often abbreviated and referred to as CBS (also in Danish), is a public university situated in Copenhagen, Denmark and is considered one of the most prestigious business scho ...

, the

University of Vienna The University of Vienna (german: Universität Wien) is a public research university located in Vienna, Austria. It was founded by Duke Rudolph IV in 1365 and is the oldest university in the German-speaking world. With its long and rich hi ...

and the University of Bayreuth offer master's degree programs specialized in philosophy and economics.

Journals

''Economics and Philosophy''

''Erasmus Journal for Philosophy and Economics''
* '' Journal of Economic Methodology''
''Philosophy and Public Affairs''
* ''Politics, Philosophy & Economics'' �
Aims and Scope

Notes

References

* Boulding, Kenneth E. (1969). "Economics as a Moral Science," ''American Economic Review'', 59(1), pp.
1
12. *Caldwell, Bruce (1987). "positivism," '' The New Palgrave: A Dictionary of Economics'', v.3, pp. 921–23. * Downie, R.S. (1987). "moral philosophy," ''The New Palgrave: A Dictionary of Economics'', v. 3, pp. 551–56. * Hands, D. Wade, ed. (1993). ''The Philosophy and Methodology of Economics'', Edward Elgar. 3 v. Description and Table of Content
links.
* Davis, John B., Alain Marciano, Jochen Runde, eds. (2004). ''The Elgar Companion to Economics and Philosophy''. Description & Table of Content
links
and Introduction and ch.
previews
via sidebar scrolling. Articles from 1925 & 1940–1991. * Hausman, Daniel M. (1992). ''Essays on Philosophy and Economic Methodology''
Description
ch.
link.
Chapter-previe
links.
* _____, ed. ( 9842008). ''The Philosophy of Economics: An Anthology'', 3rd ed. Cambridge. Description & Table of content
links
an
Introduction
From John Stuart Mill on. * Heilbroner, Robert L. ( 9531999). '' The Worldly Philosophers: The Lives, Times, and Ideas of the Great Economic Thinkers'', 7th ed. Scroll to chapter-previe
links.
* Hodgson, Bernard (2001). ''Economics as Moral Science''.
Description
and chapter-preview links, pp
xixiv.
* Peil, Jan, and Irene van Staveren, eds. (2009). ''Handbook of Economics and Ethics'', Edward Elgar
Description
and
preview.
* Putnam, Hilary (1993). "The Collapse of the Fact/Value Dichotomy," in Martha Nussbaum and Amartya Sen, ed. ''The Quality of Life'', pp. 143–157. Oxford. Reprinted in Putnam (2002), Part I, pp.
-64
* _____ (2002). ''The Collapse of the Fact/Value Dichotomy and Other Essays''

and chapter-preview
links.
* Robinson, Joan (1962). ''Economic Philosophy''
Description
and scroll to chapter an
previews.
* Rubinstein, Ariel (2006). "Dilemmas of an Economic Theorist," ''Econometrica'', 74(4), pp
865–883
(close Page tab). * Szenberg, Michael, ed. (1992). ''Eminent Economists: Their Life Philosophies'', Cambridge
Description
an
preview.
* Walsh, Vivian (1961). ''Scarcity and Evil]: An Original Exploration of Moral Issues on the Frontier Between Guilt and Tragedy''. Prentice-Hall. * _____ (1987). "philosophy and economics," ''The New Palgrave: A Dictionary of Economics'', v. 3, pp. 861–869. * _____ (1996). ''Rationality, Allocation, and Reproduction''. Cambridge
Description
and scroll to chapter-previe
links.

External links

Philosophy of Economics
(Daniel Little's entry in the ''Routledge Encyclopedia of the Philosophy of Science'')
Philosophy of Economics
(Stanford Encyclopedia of Philosophy) by Daniel M. Hausman, notable in the field. {{Authority control Philosophy of economics, Interdisciplinary subfields of economics