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Theoretical and Practical Reason in Economics

Part of the book series: SpringerBriefs in Philosophy ((BRIEFSPHILOSOPH))

Abstract

In this first chapter the main hypothesis of the book are presented. It argues that economics today requires the theoretical and practical uses of reason. These uses are first defined and characterized. Then, the concepts of “capacity” of Nancy Cartwright and of “capability” of Amartya Sen are introduced as examples of theses uses respectively. The book will argue that Sen’s capabilities—opportunities which are the goals of human development—are like Cartwright’s capacities—stable real causes—of the process of human development.

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Notes

  1. 1.

    In this way, the epistemological requirements of science are satisfied. As Davis (2004 p. 401) also says: “One reason that instrumental rationality theory has been attractive in economics is that having a single model of analysis makes possible a high degree of logical and mathematical determinacy in economic explanation”. On the attraction of this version of economics corresponding to Lionel Robbins’ definition, see Elias Khalil (1996, pp. 28–30).

  2. 2.

    Strictly speaking instrumental rationality does not necessarily imply the addition of the postulate of maximization, but adds it. There is no logical implication from instrumental rationality to maximization but rather a psychological impetus that pushes us to adopt it (cf. Boudon 2004).

  3. 3.

    As a result, we are witnessing an explosion of new adjectives to characterize “rationality” in economics, such as “bounded rationality” (Herbert Simon, e.g., 1976), “expressive rationality” (Hargreaves Heap 1989, 2001), “situated rationality” (Tony Lawson 1997), “achievement rationality” (Elias Khalil 1997), “background rationality” (Mark Peacock 2003), “creative rationality” (Alessandro Vercelli 1991), and “constitutive rationality” (Hamish Stewart 1995). Daniel Kahneman’s behavioral approach (e.g., 2003), Albert Hirschman notions of “striving and attaining” (1985), and Sen’s concepts of “capability” and “commitment” also entail different broad conceptions of rationality.

  4. 4.

    Some parts of the characterization of practical reason are based on my book chapter 2012 and my article forthcoming.

  5. 5.

    For an exposition of these varieties of practical reason, see Cullity and Gaut (1997) and Ellijah Millgram (2001).

  6. 6.

    This notion of inexactness is different from that in Mill (1882) and Daniel Hausman (1992). Why do conclusions hold in most and not in all cases? Roughly speaking, for Mill and Hausman, inexactness is characteristic of theory and science. The root of this is that sciences cannot consider all the causes producing an actual effect. They only try to consider the essential causes. In actual events, however, other disturbing causes interfere. As a consequence, events happen in most but not all cases. Aristotle considers this “epistemic” inexactness, but he also holds to an “ontological” inexactness: he is indeterminist.

  7. 7.

    An Intermediate Greek-English Lexikon, founded upon the seventh edition of Liddell and Scott’s Greek-English Lexikon, Oxford at the Clarendon Press, 1900.

  8. 8.

    This is why for an Aristotelian conception a good social scientist has to be virtuous.

  9. 9.

    The lack of theoretical reason in economics is manifested in problems of definition of concepts, even of the concept of economics itself. Uskali Mäki (2002, p. 8) holds that ‘economics’ is a dangerously aggregated notion: “there is no one homogeneous ‘economics’.” New currents such as, for example, complexity, also lack a clear definition of concepts. In the introduction to the proceedings of a Conference held at Santa Fe Institute, we read: “what is the complexity perspective in economics? That is not an easy question to answer (…) the authors of the essays in this volume by no means share a single, coherent vision of complexity in economics” (Arthur et al. 1997, p. 2).

  10. 10.

    I owe thanks to Mary Morgan for this felicitous metaphor.

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  1. Department of Economics, IAE, Universidad Austral, Mariano Acosta s/n y Ruta Nacional 8, 1629, Pilar, Buenos Aires, Argentina

    Ricardo F. Crespo

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Crespo, R.F. (2013). Introduction. In: Theoretical and Practical Reason in Economics. SpringerBriefs in Philosophy. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-5564-2_1

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