Daniel Hausman

With the collapse of the centrally controlled economies and the authoritarian governments of Eastern Europe and the former Soviet republics, political leaders are, with appreciable public support, espousing “liberal” economic and political transformations—the reinstitution of markets, the securing of civil and political rights, and the establishment of representative governments. But those supporting reform have many aims, and the liberalism to which they look for political guidance is not an unambiguous doctrine

This paper sketches the contemporary turn in philosophy of science and discusses its practical implications for doing philosophy of economics. This turn consists basically of regarding philosophy of science as itself an empirical (social) science. It thus embodies a naturalized epistemology. Some of the circularities inherent in such an epistemology are examined, and it is argued that they are not vicious. Although an empirical approach to the philosophy of science is defended, it is pointed out that there are practical difficulties employing it when studying a discipline like economics in which dispute and controversy are so pervasive. It is argued that the implications of the empirical approach to philosophy of science for day-to-day philosophical practice are undramatic.

This essay comments on the theory of social norms developed by Cristina Bicchieri in The Grammar of Society. It applauds her theory of norms but argues that it cannot account for the experimental results concerning ultimatum games. A theory of fairness is also needed. It develops a number of specific criticisms of her way of incorporating the influence of norms into preferences. †To contact the author, please write to: Department of Philosophy, University of Wisconsin–Madison, 5197 Helen C. White Hall, 600 N. Park Street, Madison, WI 53706‐1474; e‐mail: [email protected]

This essay criticizes the proposal recently defended by a number of prominent economists that welfare economics be redirected away from the satisfaction of people's preferences and toward making people happy instead. Although information about happiness may sometimes be of use, the notion of happiness is sufficiently ambiguous and the objections to identifying welfare with happiness are sufficiently serious that welfare economists are better off using preference satisfaction as a measure of welfare. The essay also examines and criticizes the position associated with Daniel Kahneman and a number of co-authors that takes welfare to be ‘objective happiness’ – that is, the sum of momentary pleasures.

This book is about preferences, principally as they figure in economics. It also explores their uses in everyday language and action, how they are understood in psychology and how they figure in philosophical reflection on action and morality. The book clarifies and for the most part defends the way in which economists invoke preferences to explain, predict and assess behavior and outcomes. Hausman argues, however, that the predictions and explanations economists offer rely on theories of preference formation that are in need of further development, and he criticizes attempts to define welfare in terms of preferences and to define preferences in terms of choices or self-interest. The analysis clarifies the relations between rational choice theory and philosophical accounts of human action. The book also assembles the materials out of which models of preference formation and modification can be constructed, and it comments on how reason and emotion shape preferences.

An anthology of works on the philosophy of economics, including classic texts and essays exploring specific branches and schools of economics. Completely revamped, this edition contains new selections, a revised introduction and a bibliography. The volume contains 26 chapters organized into five parts: Classic Discussions, Positivist and Popperian Views, Ideology and Normative Economics, Branches and Schools of Economics and Their Methodological Problems and New Directions in Economic Methodology. It includes crucial historical contributions by figures such as Mill, Marx, Weber, Robbins, Knight, and Veblen and works by most of the leading contemporary figures writing on economic methodology, including five Nobel Laureates in Economics.

This book offers a comprehensive overview of the structure, strategy and methods of assessment of orthodox theoretical economics. In Part I Professor Hausman explains how economists theorise, emphasising the essential underlying commitment of economists to a vision of economics as a separate science. In Part II he defends the view that the basic axioms of economics are 'inexact' since they deal only with the 'major' causes; unlike most writers on economic methodology, the author argues that it is the rules that economists espouse rather than their practice that is at fault. Part III links the conception of economics as a separate science to the fact that economic theories offer reasons and justifications for human actions, not just their causes. With its lengthy appendix introducing relevant issues in philosophy of science, this book is a major addition to philosophy of economics and of social science.