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 (economics), equity. Public economics builds on the theory of welfare economics and is ultimately used as ...

behavioural economics Behavioral economics is the study of the psychological (e.g. cognitive, behavioral, affective, social) factors involved in the decisions of individuals or institutions, and how these decisions deviate from those implied by traditional economi ...

rationality Rationality is the quality of being guided by or based on reason. 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 In its broadest sense, justice is the idea that individuals should be treated fairly. According to the ''Stanford Encyclopedia of Philosophy'', the most plausible candidate for a core definition comes from the ''Institutes (Justinian), Inst ...

, history of economic thought, rational choice, the appraisal of economic outcomes,

institutions An institution is a humanly devised structure of rules and norms that shape and constrain social behavior. All definitions of institutions generally entail that there is a level of persistence and continuity. Laws, rules, social conventions and ...

and processes, the status of highly idealized economic models, the

ontology Ontology is the philosophical study of existence, being. It is traditionally understood as the subdiscipline of metaphysics focused on the most general features of reality. As one of the most fundamental concepts, being encompasses all of realit ...

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 is the philosophy, philosophical study of Morality, moral phenomena. Also called moral philosophy, it investigates Normativity, normative questions about what people ought to do or which behavior is morally right. Its main branches inclu ...

(or normative social and political philosophy), and

philosophy of science Philosophy of science is the branch of philosophy concerned with the foundations, methods, and implications of science. Amongst its central questions are the difference between science and non-science, the reliability of scientific theories, ...

. Economic theories of

, welfare, 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 a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interac ...

is of special interest to those interested in

epistemology Epistemology is the branch of philosophy that examines the nature, origin, and limits of knowledge. Also called "the theory of knowledge", it explores different types of knowledge, such as propositional knowledge about facts, practical knowle ...

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 or empirical 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 ...

s, while its object consists of social phenomena. In any empirical setting, the epistemic assumptions of

financial economics Financial economics is the branch of economics characterized by a "concentration on monetary activities", in which "money of one type or another is likely to appear on ''both sides'' of a trade".William F. Sharpe"Financial Economics", in Its co ...

(and related applied financial disciplines) are relevant, and are further discussed under the Epistemology of finance.

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 bri ...

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 or verity is the Property (philosophy), property of being in accord with fact or reality.Merriam-Webster's Online Dictionarytruth, 2005 In everyday language, it is typically ascribed to things that aim to represent reality or otherwise cor ...

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

reality Reality is the sum or aggregate of everything in existence; everything that is not imagination, imaginary. Different Culture, cultures and Academic discipline, academic disciplines conceptualize it in various ways. Philosophical questions abo ...

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 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 A choice is the range of different things from which a being can choose. The arrival at a choice may incorporate Motivation, motivators and Choice modelling, models. Freedom of choice is generally cherished, whereas a severely limited or arti ...

or preference,

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 environ ...

and

uncertainty Uncertainty or incertitude refers to situations involving imperfect or unknown information. It applies to predictions of future events, to physical measurements that are already made, or to the unknown, and is particularly relevant for decision ...

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

mathematics Mathematics is a field of study that discovers and organizes methods, Mathematical theory, theories and theorems that are developed and Mathematical proof, proved for the needs of empirical sciences and mathematics itself. There are many ar ...

economics Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interac ...

and

philosophy Philosophy ('love of wisdom' in Ancient Greek) is a systematic study of general and fundamental questions concerning topics like existence, reason, knowledge, Value (ethics and social sciences), value, mind, and language. It is a rational an ...

. 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 An economic system, or economic order, is a system of production, resource allocation and distribution of goods and services within an economy. It includes the combination of the various institutions, agencies, entities, decision-making proces ...

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 Welfare economics is a field of economics that applies microeconomic techniques to evaluate the overall well-being (welfare) of a society. The principles of welfare economics are often used to inform public economics, which focuses on the ...

. 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 behaviour, 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'' (1971) and

Robert Nozick Robert Nozick (; November 16, 1938 – January 23, 2002) was an American philosopher. He held the Joseph Pellegrino Harvard University Professor, University Professorship at Harvard University,Anarchy, State and Utopia'' (1974). 'Justice' in economics is a subcategory of

with models frequently representing the ethical-social requirements of a given theory. "Practical" matters include such subjects as law and cost–benefit analysis

Utilitarianism In ethical philosophy, utilitarianism is a family of normative ethical theories that prescribe actions that maximize happiness and well-being for the affected individuals. In other words, utilitarian ideas encourage actions that lead to the ...

, 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 language, Greek: and ) is the normative ethics, normative ethical theory that the morality of an action should be based on whether that action itself is right or wrong under a ...

) approaches. Many political ideologies have been an immediate outgrowth of reflection on the ethics of economic systems.

Marx Karl Marx (; 5 May 1818 – 14 March 1883) was a German philosopher, political theorist, economist, journalist, and revolutionary socialist. He is best-known for the 1848 pamphlet '' The Communist Manifesto'' (written with Friedrich Engels) ...

, 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 Dialectical materialism is a materialist theory based upon the writings of Karl Marx and Friedrich Engels that has found widespread applications in a variety of philosophical disciplines ranging from philosophy of history to philosophy of scien ...

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 In philosophy, praxeology or praxiology (; ) is the theory of human Action (philosophy), action, based on the notion that humans engage in purposeful behavior, contrary to Reflex, reflexive behavior and other unintentional behavior. French socia ...

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

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

). Developed by Ludwig von Mises within the

Austrian School The Austrian school is a Heterodox economics, heterodox Schools of economic thought, school of economic thought that advocates strict adherence to methodological individualism, the concept that social phenomena result primarily from the motivat ...

, 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 Buddhadharma and Dharmavinaya, is an Indian religion and List of philosophies, philosophical tradition based on Pre-sectarian Buddhism, teachings attributed to the Buddha, a wandering teacher who lived in the 6th or ...

-inspired

Bhutan Bhutan, officially the Kingdom of Bhutan, is a landlocked country in South Asia, in the Eastern Himalayas between China to the north and northwest and India to the south and southeast. With a population of over 727,145 and a territory of , ...

ese " Gross National Happiness" concept (suggested as a better development measure than GNI/GDP). Amartya Sen 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 (; 384–322 BC) was an Ancient Greek philosophy, Ancient Greek philosopher and polymath. His writings cover a broad range of subjects spanning the natural sciences, philosophy, linguistics, economics, politics, psychology, a ...

* Kenneth Arrow * Roger E. Backhouse * Ken Binmore * 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 ...

* Frank Hahn * Friedrich Hayek * Martin Hollis * Daniel M. Hausman * Terence Wilmot Hutchison *

David Hume David Hume (; born David Home; – 25 August 1776) was a Scottish philosopher, historian, economist, and essayist who was best known for his highly influential system of empiricism, philosophical scepticism and metaphysical naturalism. Beg ...

* John Neville Keynes *

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

* Tony Lawson *

John Locke John Locke (; 29 August 1632 (Old Style and New Style dates, O.S.) – 28 October 1704 (Old Style and New Style dates, O.S.)) was an English philosopher and physician, widely regarded as one of the most influential of the Enlightenment thi ...

* Uskali Mäki *

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

Karl Marx Karl Marx (; 5 May 1818 – 14 March 1883) was a German philosopher, political theorist, economist, journalist, and revolutionary socialist. He is best-known for the 1848 pamphlet '' The Communist Manifesto'' (written with Friedrich Engels) ...

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

* Ludwig von Mises * Pierre-Joseph Proudhon * John E. Roemer * Murray Rothbard * John Rawls * Lionel Robbins * Joan Robinson * Alexander Rosenberg *

Paul Samuelson Paul Anthony Samuelson (May 15, 1915 – December 13, 2009) was an American economist who was the first American to win the Nobel Memorial Prize in Economic Sciences. When awarding the prize in 1970, the Swedish Royal Academies stated that he "h ...

* E. F. Schumacher * Amartya Sen * Brian Skyrms *

Adam Smith Adam Smith (baptised 1723 – 17 July 1790) was a Scottish economist and philosopher who was a pioneer in the field of political economy and key figure during the Scottish Enlightenment. Seen by some as the "father of economics"——— or ...

Max Weber Maximilian Carl Emil Weber (; ; 21 April 186414 June 1920) was a German Sociology, sociologist, historian, jurist, and political economy, political economist who was one of the central figures in the development of sociology and the social sc ...

* Carl Menger * Bernard Williams

Related disciplines

The ''ethics of economic systems'' is an area of overlap between

business ethics Business ethics (also known as corporate ethics) is a form of applied ethics or professional ethics, that examines ethical principles and moral or ethical problems that can arise in a business environment. It applies to all aspects of business c ...

and the philosophy of economics. People who write on the ethics of economic systems are more likely to call themselves '' political philosophers'' 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 Philosophy, politics and economics, or politics, philosophy and economics (PPE), is an interdisciplinary undergraduate or postgraduate academic degree, degree which combines study from three disciplines. The first institution to offer degrees in P ...

. 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 The London School of Economics and Political Science (LSE), established in 1895, is a public research university in London, England, and a member institution of the University of London. The school specialises in the social sciences. Founded ...

University of Edinburgh The University of Edinburgh (, ; abbreviated as ''Edin.'' in Post-nominal letters, post-nominals) is a Public university, public research university based in Edinburgh, Scotland. Founded by the City of Edinburgh Council, town council under th ...

, the Erasmus University Rotterdam, Copenhagen Business School, the

University of Vienna The University of Vienna (, ) is a public university, public research university in Vienna, Austria. Founded by Rudolf IV, Duke of Austria, Duke Rudolph IV in 1365, it is the oldest university in the German-speaking world and among the largest ...

the University of Bayreuth, the

University of Hamburg The University of Hamburg (, also referred to as UHH) is a public university, public research university in Hamburg, Germany. It was founded on 28 March 1919 by combining the previous General Lecture System ('':de:Allgemeines Vorlesungswesen, ...

and the Witten/Herdecke University offer master's degree programs specialized in philosophy, politics 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

References

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