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Philosophy and Economics

Patricia Marino
University of Waterloo Department of Philosophy, 2019
Level: beginner
Perspective: Other
Topic: Reflection of Economics
Format: Course description/syllabus

This syllabus was originally taught at the University of Waterloo Winter Semester 2019.
Instructor: Patricia Marino

Course Description

The philosophy of economics is concerned with conceptual, methodological, foundational and ethical issues in economic theory and practice. In this course, we'll consider questions such as:

  • What can philosophy of science teach us about economic methodology?
  • What makes a particular conclusion in economics justified or true?
  • How do economic models work?
  • Is economics a science?
  • What are implications of modeling people as self-interested utility maximizers of utility?
  • Does economic methodology reflect gendered presuppositions?
  • What is at stake in the debate over classical versus behavioral economics?
  • How do value-based considerations play a role in economic reasoning and policy?
  • What are the ethical implications of using efficiency-based reasoning?
  • What are alternatives to efficiency-based reasoning?
  • How do conceptual matters impact applications, e. g. in environmental economics?

This course does not endorse any particular conclusion about these matters; rather, the idea is for you to both understand what others have had to say, and to develop, possibly change, and learn how to intelligently defend, your own opinions.

Course Objectives

This course should help you be able to:

  • analyze and critically evaluate divergent views over conceptual issues in economics;
  • understand some ways that values play a role in economic thought and policy making;
  • develop your own ideas concerning economic justification and objectivity;
  • develop your own opinions about contentious practical economic issues in society;
  • effectively communicate your ideas orally and in written work.

Course Outline

Week 1: Introduction, Smith's "invisible hand," and the historical roots of efficiency

  • Adam Smith, An Inquiry into the Nature and Causes of the Wealth of Nations, Book 1, Chapter 2 ("Of the Principle which Gives Occasion to the Division of Labor," and Book 4 Chapter 2 ("Of Restraints Upon Importation from Foreign Countries of Such Goods as Can Be Produced at Home") (see posted pdf, or text available online).
  • William Grampp, "What Did Smith Mean by the Invisible Hand?" Journal of Political Economy, 108(3) (2000), 441-465, read only Introduction to end of Section 2 (pages 441-446).
  • David Hume, Enquiry Concerning Principles of Morals, Section 1, Section 2, and Section 3 part 1(text available online).

Week 2: Introduction to economic and economic methodology; Mill on a priori reasoning in economics

  • Daniel Hausman, Introduction to The Philosophy of Economics 3rd ed. (Cambridge University Press, 2008), pp. 22-25 ("An Introduction to Economics" and "An Introduction to Economic Methodology).
  • J. S. Mill, John Stuart Mill, "On the Definition of Political Economy and the Method of Investigation Proper to It" (read only from "What is now commonly understood by the term 'Political Economy' is not..." to the end of the essay). This is Essay V of Essays on Some Unsettled Questions of Political Economy, text online and as a kindle download).

Week 3: Methodology and justification 1: Friedman and his critics

  • Milton Friedman, "The Methodology of Positive Economics," in Essays in Positive Economics, University of Chicago Press 1953, 3-43. Text available online. • Bruce Caldwell, "Critique of Friedman's Methodological Instrumentalism," Southern Economic Journal (1980), 366-374.

Week 4: Methodology and justification 2: economic models and methods

  • Robert Sugden, "Credible Worlds: The Status of Theoretical Models in Economics." Journal of Economic Methodology 7.1 (2000): 1-31. 4

Week 5: Methodology and justification 3: is economics a science? 

  • Alfred Eichner, "Why Economics Is Not Yet a Science," Journal of Economic Issues (1983): 507-520.
  • Raj Chetty, "Yes Economics is a Science." • Eric Schliesser, "Economics as a Science."
  • Alex Rosenberg, "If Economics Is a Science, what Kind of a Science Is It?" The Oxford Handbook of Philosophy of Economics, 2009.

Week 7: Feminist economics and perspectives on rational choice theory 

  • Paula England, "A Feminist Critique of Rational-Choice Theories: Implications for Sociology," The American Sociologist, 20(1) (1989), 14-28.
  • Ann Cudd, "Rational Choice Theory and the Lessons of Feminism" in Antony, Witt, and Atherton eds., A Mind of One’s Own: Feminist Essays on Reason and Objectivity (Westview Press, 2001), 398-417.

Week 8: Behavioral economics and its critics 

  • Christine Jolls, Richard Thaler, and Cass Sunstein, "A Behavioral Approach to Law and Economics," Stanford Law Review 1998, 1471-1550.
  • Richard Posner, "Rational Choice, Behavioral Economics, and the Law" Stanford Law Review (1998): 1551-1575.

Week 9: Ethics, values, and economics 1: the limits of self-interest and challenges to consequentialism 

  • Amartya Sen, "Rational Fools: A Critique of the Behavioral Foundations of Economic Theory," Philosophy and Public Affairs, 6(4) (1977), 317-344.
  • John Harsanyi, "Morality and the Theory of Rational Behavior." Social research (1977): 623-656.
  • E. F. Carritt, "Criticisms of Utilitarianism," from Bratman and Perry eds., Introduction to Philosophy, 477-479.

Week 10: Ethics, values, and economics 2: Pareto efficiency, alternatives to consequentialism, and the challenge of inequality

  • Mark White, (2009). "Pareto, Consent, and Respect for Dignity: a Kantian Perspective." Review of Social Economy 67 (2009), 49-70.
  • John Rawls, selection from A Theory of Justice (first published 1971), reprinted in Russ Shafer-Landau, Ethical Theory (Wiley, 2013) 581-591.
  • T. M. Scanlon, "Libertarianism and Liberty," Boston Review, October 16, 2011.

Week 11: Ethics, values, and economics 3: Cost-benefit analysis and its critics

  • Mark Sagoff, "At the Shrine of Our Lady of Fatima, or Why Political Questions Are Not All Economic," Arizona Law Review Vol. 23 (1981), pp. 1283-1298 Mar 15: Robert Frank, "Why is Cost-Benefit Analysis So Controversial?" The Journal of Legal Studies, 29(S2) (2000), 913-930. Choy, Yee Keong. "Cost-benefit Analysis, Values, Wellbeing and Ethics: An Indigenous Worldview Analysis." Ecological Economics 145, no. C (2018): 1-9.

Download Syllabus here


This project is brought to you by the Network for Pluralist Economics (Netzwerk Plurale Ökonomik e.V.).  It is committed to diversity and independence and is dependent on donations from people like you. Regular or one-off donations would be greatly appreciated.