Economics, Dr. Douglas, Philosophy of Economics

Q&A on the Philosophy of Economics with Dr. Alexander Douglas – Session 1

Dr. Alexander Douglas specialises in the history of philosophy and the philosophy of economics. He is a faculty member at the University of St. Andrews in the School of Philosophical, Anthropological and Film Studies. In this series, we will discuss the the philosophy of economics.

Scott Douglas Jacobsen: In correspondence with Dr. Stephen Law, completion of an interview, and then completion of the first Q&A on Philosophy with him, I reached out to him for a recommendation. He recommended you. Your specialty is the philosophy of economics, as noted in correspondence. This might seem confusing, as if an expertise in economics, as I thought – wrongly. So what is the philosophy of economics?

Dr. Alexander Douglas: I don’t have expertise in building economic models, collecting economic data, or any of the things economists specialise in doing. I’m not a good person to ask about the economic effects of Brexit, or of raising the minimum wage, or of changing the tax code, or anything like that.

I’m interested in tracing out the meanings of economic concepts. Words like “money,” “capital,” “debt,” “wealth,” and so on are used to great effect in public discourse. But when we look closely, they are often used in equivocal, confused, and contradictory ways.

I also look at the logical coherence of economic models. Economists often claim to have tested their theories against the data, thus discouraging criticism from non-economists who don’t know the data as well. But the job of the philosopher is always to ask: what have you tested against the data? Some theories suffer from logical inconsistencies that make it unclear regarding what it even means to say that they have been empirically tested. If I propose that all tall men are short, it’s hardly reassuring to know that I have tested my theory against the data. How would that work?

SJ: How did this interest in the philosophy of economics originate for you?

AD: I’ve always been interested in economics, but I began writing on it around 2011. I was becoming increasingly annoyed at the way, as I saw it, politicians and the media were using the concept of debt in an unreflective and illogical way to manipulate the public. I wrote my book, The Philosophy of Debt, in an attempt to clarify the concept and reduce its undeserved rhetorical power.

My main specialisation is in the history of philosophy, recently with an emphasis on the history of logic. But in a way, the history of economics is part of the history of logic. Many of the founders of modern economics were logicians – Stanley Jevons, for example, and John Maynard Keynes in a way. Even Adam Smith began as a professor of logic. To a certain extent, economics can be seen as a branch of logic: the logic of human decision-making, or what Aristotle might have called, the art of practical syllogism.

SJ: Who seem like some of the foundational names in the field?

AD: Daniel Hausman should probably get credit for founding the modern university sub-discipline known as “philosophy of economics.” Alexander Rosenberg was another pioneer, though he switched to philosophy of biology, as he tells it, upon discovering that economists have no interest in what philosophers have to say! Nancy Cartwright has done important work on the methodology and ontology of economics, as has the economist, Tony Lawson. Amartya Sen is both an economist and a philosopher and often brings the two disciplines together into a unity.

For the sort of philosophy of economics that interests me, the work of Joan Robinson is very important. Robinson published a book in 1962, Economic Philosophy, that still has relevance in the probing questions it asks about the conceptual foundations of the discipline. Other departures into philosophy by economists – John Hicks’s, Causality in Economics, for example – seem comparatively shallow to me.

SJ: What core concepts and sub-fields define the philosophy of economics?

AD: The dominant strand of philosophy of economics examines the methodologies employed by economists to see how they can be justified as ‘good’ science. For example: are economists justified in using abstract mathematical models, often based on unrealistic assumptions about human capacities, to explain observable economic phenomena? If models are successful at making predictions, does it matter if they contain unrealistic assumptions? Is Rational Choice Theory, which forms the basis of much economics, empirically unfalsifiable? Is it therefore unscientific? Etc.

Another strand looks at the ethical aspects of economics. Political economy and welfare economics involve ethical questions. Some philosophers of economics look at the moral foundations of welfare economics (is preference-maximisation a good measure of welfare?), explore what political philosophy has to say about economic policy (is economic efficiency relevant to justice?), and related enquiries.

A final strand – the one that most interests me – questions the logical coherence of economic theories. For instance, economic models often define a timeless equilibrium, in which the values of many interdependent variables are solved simultaneously, even while the models are meant to represent causal sequences; in which, what happens at an earlier time determines what happens at a later time. This can lead to terrific logical conundrums. Older models face a different logical problem: they describe sequential exchanges of one homogenous good, measurable in a standard unit, while proposing to represent exchanges of incommensurable goods that can’t be counted by a single standard unit. The way in which economists use seemingly innocent terms like “preference,” “expectation,” “capital,” “labour,” etc. often open out to these deep conceptual puzzles.

Scott Douglas Jacobsen is the Founder of In-Sight: Independent Interview-Based Journal and In-Sight Publishing. Jacobsen works for science and human rights, especially women’s and children’s rights. He considers the modern scientific and technological world the foundation for the provision of the basics of human life throughout the world and advancement of human rights as the universal movement among peoples everywhere.

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