Philosophy of Economics
This module aims to introduce you to concepts and debates in the philosophy and methodology of economics within the wider context of the philosophy of science. You will be introduced to the debates concerning the definition of economics (how should economics be defined: study of choice, of interaction, of wealth, of conflict, etc.?), you will study the role played by models and rationality in economic theory, what method is generally followed by economist and what method, if any, should be followed according to the philosophers of science (inductivism, deductivism, falsificationism etc.), finally you will study some of the new trends in the discipline such as Rhetoric and Humanomics, which provide a more comprehensive vision of the economic actor as a human being in all its dimensions and try to overcome some of the shortcomings of the discipline.
This module introduces students to the methodology of economics within the wider context of philosophy of science which is relevant across the globe, because it concerns not a specific discipline but how to approach scientific inquiry, in general. The constant critical focus of questioning received assumptions will prove essential in a multi-cultural and open society (Popper, who famously proposed the notion of an open society, is indeed one of the authors being studied in this module).
All of the resources are available on the ELE (Exeter Learning Environment).
Through class discussions and written work students are equipped with presentation, team-working, creativity and research skills.
Full module specification
|Module title:||Philosophy of Economics|
None. Please note if you have taken BEE1015 you will not be able to take BEE2010.
|Duration of module:||
Duration (weeks) - term 2: |
This module aims to introduce students to issues in the methodology of economics within the wider context of the philosophy of science; to generate discussion with students about what kind of economics is normally taught, what kind of economics interests them and what kind of economists they want to be.
The Module is structured in four parts. We start with a discussion on how economics has been defined and what debates the standard and accepted definition of economics has generated. In the first part the basic categories underlining the scientific debate are introduced (Hume’s Problem of Induction, Induction and Deduction, Scientific Explanation and the debate around the Neo-positivism). This opens the way to the second Part where the Popperian post Neo-positivist reply to Hume’s Problem is presented, together with the crucial debate on Popper’s methodology put forward by Kuhn, Lakatos and Feyerabend. The third Part focuses on some recent debates around key themes in economics such as rationality and value judgements. Finally, the fourth Part will focus on some schools of thought within the economics profession without any claim to be exhaustive but with the aim of giving the students an awareness of different approaches: 1) Rhetoric of Economics which has stressed the role played by rhetoric both in the academic practice and the Great Enrichment of modern societies (this approach is sometimes called Humanomics for its reliance on a more holistic vision of the human being), and, related to the previous approach, 2) the Austrian School of economics with its stress on creativity in the market process and methodological subjectivism and individualism.
ILO: Module-specific skills
- 1. distinguish clearly between different methodological approaches to scientific research (inductivism vs deductivism, verificationism vs falsificationism) and assess their merits and shortcomings;
- 2. define accurately falsificationism and the role that it played within the debates on theory and evidence and evaluate whether it was able to overcome the problem of induction;
- 3. compare and contrast with precision the different methodological approaches that developed in the post-Popperian methodology of science such as those put forward by Kuhn (paradigms and revolutions in science), by Lakatosian research programmes and evaluate the dissolution of methodology that occurred in Feyerabends anarchism
- 4. state clearly Humes problem of induction and describe why it challenges the scientific enterprise.
ILO: Discipline-specific skills
- 5. explain succinctly the importance of modelling and abstraction in economics and give detailed examples of economic models and their scope
- 6. examine in detail the different definitions of economics (Robbins, Buchanan, Kirzner etc.) and evaluate their merits and implications on the path taken by the discipline;
- 7. present accurately the recent trends in economics taken by the McCloskeyan rhetorical approach, identify its distinguishing feature with respect to the other methodological approaches and illustrate how it has impacted modern economies (The Great Enrichment);
- 8. evaluate in detail the methodological individualist approach heralded by the Austrian School of economics and compare it to the neoclassical approach.
ILO: Personal and key skills
- 9. recognise different approaches to the analysis of economic problems and the instrumental role of models that do not exhaust the complexity of economic phenomena.
Learning activities and teaching methods (given in hours of study time)
|Scheduled Learning and Teaching Activities||Guided independent study||Placement / study abroad|
Details of learning activities and teaching methods
|Category||Hours of study time||Description|
|Guided Independent Study||123|
|Form of assessment||Size of the assessment (eg length / duration)||ILOs assessed||Feedback method|
|Model questions||50 minutes in class discussion||1-9||Model answers|
Summative assessment (% of credit)
|Coursework||Written exams||Practical exams|
Details of summative assessment
|Form of assessment||% of credit||Size of the assessment (eg length / duration)||ILOs assessed||Feedback method|
|Individual Essay||30||1500 words max||1-9||Written feedback|
|Examination||70||90 minutes||1-9||Written feedback|
Details of re-assessment (where required by referral or deferral)
|Original form of assessment||Form of re-assessment||ILOs re-assessed||Timescale for re-assessment|
|Individual Essay (30%) & Examination (70%)||Examination (100%) 90 minutes||1-9||August/September Reassessment Period|
Final re-examination is worth 100%, i.e. in case of resit there will be no individual essay and presentation.
Part 1 Introductory concepts
- Introduction: Philosophy and Methodology
- Definition and scope of economics (Robbins, Buchanan, Kirzner)
- Causality in Philosophy (Hume’s Challenge)
- Inductivism and Deductivism (Mill, Methodenstreit, Hausman)
- Models and Scientific Explanation (Vienna Circle and Logical Positivism)
Part 2 Philosophy of Science
- Popper and Falsificationism
- Kuhnian Paradigms
- Lakatosian Research Programmes
- Instrumentalism: Friedman and his critics
- Application to Economics
Part 3 Issues and debates within Economics
- Instrumental and Economic Rationality
- Value Judgements in Economics
- Efficiency in Markets
Part 4 Other approaches
- The Rhetoric of Economics and Humanomics
- Austrian School of Economics and its methodology
- Summing Up: Is Economics a Science?
Indicative learning resources - Basic reading
There are 2 main General Texts, one for the Methodology Part and one for the Philosophy Part.
On Methodology of Economics the students can choose one of the following 2 books:
Pheby, J. (1988) Methodology and Economics: a Critical Introduction, Palgrave MacMillan. (A concise and well written introduction to the main topics of the module, though a bit dated).
Boumans, M. and J. B. Davis (2016) Economic Methodology, Understanding Economics as a Science, 2nd ed., Palgrave MacMillan. (Less systematic than Pheby but more updated).
On Philosophy of Economics the students can choose one of the following 2 books:
Gaus, G. (2008) On Philosophy, Politics and Economics, Thomson Wadsworth (covers a broad array of topics from rationality to utility theory to social choice at an introductory level. The focus is more on the philosophical than on the economic implications).
Kliemt, H. (2009), Philosophy and Economics I: Methods and Models, Oldenbourg (more sophisticated than Gaus, but does not cover as many topics as the latter).
Reiss, J. (2013) Philosophy of Economics, A Contemporary Introduction, Routledge (this book is the most updated and systematic introduction to the field).
Ross, D. (2014) Philosophy of Economics, Palgrave (It provides a good coverage of recent trends in philosophy of economics such as neuroeconomics, psychology, experimentation).
Also useful are (especially when preparing for the individual essay):
Blaug, M. (1980/1992) The Methodology of Economics, 2nd ed., Cambridge University Press (A Classic discussion, very well written, with a clear perspective.)
Hausman, D. ed. (2008) The Philosophy of Economics: An Anthology, Cambridge University Press (includes a selection of basic readings, useful for the essay)
Hausman, McPherson, Satz (2017) Economic Analysis, Moral Philosophy and Public Policy, 3rd ed. Cambridge University Press (a good analysis of the ethical underpinnings and implications of economic analysis)
Caldwell, B. J (1994) Beyond Positivism, Economic Methodology in the Twentieth Century, Routledge (critical analysis of Popperian methodology in Economics. It introduces to a pluralistic approach in economic methodology)
Kincaid, H. and Ross, D. (2009) The Oxford Handbook of Philosophy of Economics, Oxford University Press. (Very useful for a first orientation into the basic categories introduced in this module)
Rodrik, Dani (2015) Economic Rules, Oxford University Press (This book will be used in the tutorials, in particular chapters 1 and 2, since it provides an insightful perspective on economic modelling from a practitioner who has contributed himself with the model building activity, especially in the area of trade and globalisation).
Module has an active ELE page?
Indicative learning resources - Web based and electronic resources
The student is expected to read some journal articles as they will be indicated in the lectures. Also, there will be many suggested readings which students can use when approaching the individual essay as a first starting point. In general two journals are well established in the field: Journal of Economic Methodology and Economics and Philosophy.
ELE – http://vle.exeter.ac.uk/course/view.php?id=164
Web based and electronic resources:
There is much useful information available via the web. For example The Stanford Encyclopedia of Philosophy includes the section “Philosophy of Economics” with excellent references and other web addresses (http://plato.stanford.edu/entries/economics/).
Other resources: New Palgrave Dictionary of Economics Online (available in the online resources of the Library). This Dictionary includes many entries that clearly define concepts which will be useful when studying many of the topics covered in this course (utility, rationality, models etc.).
Last revision date