The gap between economic rationality, as embedded in utility maximization, and ethical rationality, identified with a set of rules that prescribe the right course of action, has been a challenging issue for economists, philosophers, and business ethicists. Despite the difference and the noncompetition between a scientific economic approach of economics and business ethics, and a behavioral and philosophical one, we highlight the importance of the Aristotelian concept of prudence or phronesis applied to business activity. Phronesis allows for a conceptualization of (...) rationality that can be simultaneously applied to economics and ethics. It also allows conceiving the intrinsically ethical nature of economic rationality. This relationship requires an appropriate education and the intervention of the state. (shrink)

Ludwig von Mises’s Human Action is a seminal work of Austrian economics. It sets forth Mises’s theory of the acting person and lays the groundwork for a liberal economic order. But is the “human action” which Mises describes in Human Action really human action? Mises, as well as his colleague Friedrich von Hayek, posits a liberal society in which telos and metaphysics can be elided from human interactions, but such conceptions of the human person are greatly different from the more (...) robust, and humane, anthropologies of Aristotle and St. Thomas Aquinas. In this paper, I compare and contrast the visions of the human person found in Mises, Hayek, Aristotle, and St. Thomas, arguing that the truly human vision of human action found in the latter two thinkers’ works provides a much sounder basis for human material flourishing (“capitalism”). (shrink)

Two theses appear to be central to Reid’s view of the visual field. By sight, we do not originally perceive depth or linear distance from the eye. By sight, we originally perceive the position that points on the surface of objects have with regard to the centre of the eye. In different terms, by sight, we originally perceive the compass direction and degree of elevation of points on the surface of objects with reference to the centre of the eye. I (...) consider various problems about distance perception and perception of position with regard to the centre of the eye raised by Reid’s texts. These questions are relevant to Reid’s description of the geometry of visibles as the “intrinsic” geometry of the surface of the sphere. (shrink)

This paper aims to persuade its reader that libertarianism, at least in several of its varieties, is a species of the genus Michael Oakeshott referred to as ‘rationalism in politics’. I hope to demonstrate, employing the work of Oakeshott, as well as Aristotle and Onora O’Neill, how many libertarian theorists, who generally have a sincere and admirable commitment to personal liberty, have been led astray by the rationalist promise that we might be able to approach deductive certainty concerning the 'correctness' (...) of some political programme. Of course libertarians, in common with the adherents of almost any other political ‘stance’, are not a monolithic body, but exhibit a variety of more or less rationalist arguments for their views. For example, a thinker like Hayek, who is often placed in the libertarian camp, came to adopt much of Oakeshott’s critique of rationalism in his later work. And, of course, Oakeshott himself expressed an affinity for libertarian ideas in his essay, ‘The Political Economy of Freedom’ (1991 [1962]). But a general predilection to enhance individual freedom as far as is deemed practicable is quite a different matter from taking a stance in which liberty, and liberty conceived in a rather narrow fashion, is the only value deemed admissible into ‘reasonable’ political discourse. (We will see in a subsequent section that Oakeshott recognized this urge to sanctify one value above all others as a logical requirement of striving for deductive political truths.) I believe that a critique of such libertarian rationalism is particularly relevant given the present situation in the United States vis-à-vis civil rights and the ongoing ‘war on terror’, in that many non- libertarian supporters of peace and strong civil rights find themselves allied with libertarians on these issues—if libertarians have gotten these issues ‘correct’, then how might they have gone wrong elsewhere? Furthermore, the critique may aid libertarians themselves, because, if the title of this paper is accurate, such a single-minded exaltation of one value above all others is an enemy of true liberty, so that libertarians might want to rethink adopting such a position. As Philip Pettit demonstrates (1997), freedom as non-domination is more robust and inclusive of all that we value about freedom than is the libertarian concept of freedom as non-interference; by allowing, say, immense economic power to be concentrated in a single corporation, as intervention to break the company up would violate the principle of non-interference, libertarian ideas may greatly diminish the liberty of the people subject to that corporate power. (shrink)

This paper's purpose is to set forth the conditions of explanation in the domain of formal modelling of social action. Explanation is defined as an adequate account of the underlying factors bringing about a phenomenon. The modelling of a social phenomenon can claim explanatory value in this sense if the following two conditions are fulfilled. (1) The generative mechanisms involved translate the effects of real factors abstracted from their phenomenal context, not those of purely ideal ones. (2) The explanatory hypotheses, (...) which account for the effects of explanatory factors, and the purely descriptive hypotheses, which introduce conceptual simplifications and summarise complex secondary mechanisms, are relatively independent from each other with regard to the phenomenon represented. This condition subjects the model to testing by alternatives through the development of purely descriptive hypotheses in the sense of explanatory or analytical realism. (shrink)

This article presents an overview and critique of the two leading macroeconomic approaches from the last 70 years: reasoning using high-level aggregates detached from individuals and their choices, and modeling using so-called microfoundations. We judge the validity of both methods, showing their inherent limits and deficiencies as explanatory and predictive tools of economics. We also underline several vital improvements, which are required if the models are supposed to guide policy decisions – even if this means a more modest and less (...) conceited approach. (shrink)