How to Do Philosophy of Economics

Daniel M. Hausman

PSA: Proceedings of the Biennial Meeting of the Philosophy of Science Association, Vol. 1980, Volume One: Contributed Papers (1980),353-362.
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How t o Do P h i l o s o p h y o f ~ c o n o m i c s '

D a n i e l M. Hausman

U n i v e r s i t y o f MarylandfCollege Park

Although p h i l o s o p h e r s o f s c i e n c e h a v e a l w a y s b e e n i n t e r e s t e d i n t h e a c t u a l work o f s c i e n t i s t s , t h e r e h a s been a s t r o n g t u r n i n t h e l a s t g e n e r a t i o n away from p r e s c r i b i n g how s c i e n c e o u g h t i d e a l l y t o p r o c e e d and toward s t u d y i n g more c a r e f u l l y how s c i e n c e h a s p r o c e e d e d . In part t h i s t u r n h a s b e e n a r e a c t i o n t o p r e v i o u s work i n p h i l o s o p h y o f s c i e n c e , which t o many seemed m i s g u i d e d and l a r g e l y i r r e l e v a n t t o t h e s c i e n c e s . I n p a r t t h i s change r e f l e c t s a g e n e r a l s c e p t i c i s m about t h e p o s s i b i l i t y o f d o i n g t r a d i t i o n a l f o u n d a t i o n a l i s t e p i s t e m o l o g y . Such s c e p t i c i s m i s i t s e l f a r e a c t i o n t o t h e f a i l u r e o f t h e f o u n d a t i o n a l i s t program o f t h e logical empiricists. The contemporary t u r n toward c a r e f u l e m p i r i c a l s t u d y o f t h e s c i e n c e s c o n s t i t u t e s a new program f o r t h e p h i l o s o p h y o f s c i e n c e , which I s h a l l c a l l ' e m p i r i c a l p h i l o s o p h y o f s c i e n c e ' o r ' t h e e m p i r i c a l approach t o t h e philosophy o f s c i e n c e ' .

1.

Empirical Philosophy of Science

The c r e d o o f t h e e m p i r i c a l a p p r o a c h may b e s t a t e d t r e n c h a n t l y and s i m p l i s t i c a l l y a s follows: The p h i l o s o p h y o f s c i e n c e i s i t s e l f a n e m p i r i c a l s c i e n c e A l l c o n c l u s i o n s a b o u t t h e s c i e n t i f i c e n t e r p r i s e t h a t t h e p h i l o s o p h e r of s c i e n c e draws a r e , o r s h o u l d b e , s c i e n t i f i c c o n c l u s i o n s and must b e defended i n t h e same way o r ways t h a t t h e r e s u l t s o f t h e s c i e n c e s a r e d e f e n d e d . When t h e p h i l o s o p h e r o f s c i e n c e makes pronouncements a b o u t t h e g o a l s o f s c i e n c e o r t h e b a s i s o r b a s e s upon which s c i e n t i s t s a c c e p t v a r i o u s t h e o r i e s o r a b o u t any o t h e r f e a t u r e o f s c i e n c e , we s h o u l d r e g a r d t h e s e pronouncements a s s c i e n t i f i c c l a i m s and a s s e s s them a s we would a s s e s s t h e v a r i o u s a s s e r t i o n s t h e s c i e n c e s make. The e m p i r i c a l a p p r o a c h t o t h e p h i l o s o p h y o f s c i e n c e d e n i e s t h a t e p i s t e m o l o g y c a n b e d i s t i n c t from e m p i r i c a l s t u d y o f t h e human c o g n i t i v e f a c u l t i e s , t h e h i s t o r y o f t h e human s e a r c h f o r knowledge and t h e g e n e r a l

PSA 1 9 8 0 , Volume 1, pp 353-362 C o p y r i g h t @ 1980 by h e P h i l o s o p h y o f S c i e n c e A s s o c i a t i o n

p r o g r e s s of t h e s c i e n c e s . I n Quine's terminology (1969), epistemology is "naturalized". It aims no l o n g e r t o j u s t i f y k i n d s o f knowledge c l a i m s i n terms o f a n e p i s t e m o l o g i c a l l y p r i o r ( s e l f - e v i d e n t o r i n d u b i t a b l e ) foundation. I n j u s t i f i c a t i o n we a l w a y s t a k e f o r g r a n t e d much o f o u r s c i e n t i f i c and every-day knowledge. "Justifying" an a s s e r t i o n c o n s i s t s s o l e l y o f showing t h a t i t i s s u p p o r t e d by e v i d e n c e i n t h e way o r ways t h a t s c i e n t i f i c a s s e r t i o n s g e n e r a l l y a r e . When o u r c l a i m s t o know a r e c h a l l e n g e d , t h e b e s t we c a n do i s t o e x p l a i n s c i e n t i f i c a l l y how we know ( o r c a n know) what we do.* A s e m p i r i c i s t s , we a c c e p t t h e s e explanations ultimately because they help us t o organize our experience and a r e s u p p o r t e d by o u r e x p e r i e n c e . W e h a v e no o t h e r u l t i m a t e w a r r a n t . Our g o a l i s t o c o n s t r u c t e m p i r i c a l t h e o r i e s o f human knowing which a r e c o n s i s t e n t w i t h t h e o r i e s o f o t h e r s u b j e c t m a t t e r s and which e x p l a i n how we c a n know a l l t h e s e t h e o r i e s . The e m p i r i c a l a p p r o a c h t o p h i l o s o p h y o f s c i e n c e i s n o t p u r e l y "descriptive". Although p h i l o s o p h e r s ' c l a i m s a b o u t s c i e n c e s s h o u l d b e defended i n p a r t by showing t h e i r c o n s i s t e n c y w i t h s c i e n t i f i c p r a c t i c e , e m p i r i c a l p h i l o s o p h e r s o f s c i e n c e c a n s t i l l a s s e s s t h e work o f s c i e n t i s t s and o f f e r a d v i c e and i n s t r u c t i o n . Philosophers of science can sometimes c o n t r i b u t e d i r e c t l y t o t h e s c i e n t i f i c d i s c i p l i n e s t h e y s t u d y . What we l e a r n a b o u t s c i e n t i f i c knowledge a c q u i s i t i o n p r o v i d e s t h e b a s i s f o r s u c h a s s e s s m e n t and a d v i c e . Empirical philosophy of s c i e n c e t h u s d o e s n o t r e d u c e t o h i s t o r y o f s c i e n c e . Not a l l o f t h e h i s t o r y o f s c i e n c e i s r e l e v a n t t o t h e q u e s t i o n s w i t h which t h e phiThe p r e c i s e d e t a i l s o f how s c i e n t i f i c losophy o f s c i e n c e is concerned. r e s u l t s a r e r e a c h e d a r e o n l y i m p o r t a n t t o p h i l o s o p h e r s o f s c i e n c e when t h e y h e l p them u n d e r s t a n d how we come t o know. On t h e o t h e r h a n d , t h e r e a r e o t h e r s o u r c e s o f e v i d e n c e ( f o r example, from psychology) a b o u t how humans a c q u i r e knowledge.

2.

The E p i s t e m o l o g i c a l C i r c l e

I n a t t e m p t i n g t o s t u d y s c i e n c e a s an e m p i r i c a l p h i l o s o p h e r of s c i e n c e , one f a l l s i n t o a l o g i c a l c i r c l e w i t h a t l e a s t f o u r forms o r manifestations. Such a n " e p i s t e m o l o g i c a l c i r c l e " i s , i n f a c t , common t o e v e r y t h e o r y o f knowledge. Hegel s t a t e s t h e p r e d i c a m e n t w e l l : W e o u g h t , s a y s Kant, t o become a c q u a i n t e d w i t h t h e i n s t r u m e n t [of c o g n i t i o n ] , b e f o r e we u n d e r t a k e t h e work f o r which i t i s t o b e employed; f o r i f t h e i n s t r u m e n t b e i n s u f f i c i e n t , a l l o u r t r o u b l e w i l l be spent i n vain. The p l a u s i b i l i t y o f t h i s s u g g e s t i o n h a s won I n t h e c a s e of o t h e r f o r i t g e n e r a l a s s e n t and a d m i r a t i o n ; i n s t r u m e n t s , we c a n t r y and c r i t i c i z e them i n o t h e r ways t h a n by s e t t i n g a b o u t t h e s p e c i a l work f o r which t h e y a r e d e s t i n e d . But t h e e x a m i n a t i o n o f knowledge c a n o n l y b e c a r r i e d o u t by a n a c t o f knowledge. To examine t h i s s o - c a l l e d i n s t r u m e n t i s t h e same t h i n g a s t o know i t . But t o s e e k t o know b e f o r e we know i s a s a b s u r d a s t h e wise r e s o l u t i o n of Scholasticus, not t o venture i n t o t h e water u n t i l he had l e a r n e d t o swim. (1817, p. 1 4 ) .

... .

Some t h e o r i e s o f knowledge f i n d t h e i r way t h r o u g h t h e s e d i f f i c u l t i e s

easily. I f one maintains t h a t t h e r e a r e self-warranting t r u t h s , f o r example, t h e n o n e c a n e a s i l y meet t h e demand t h a t we know some o f t h e r e s u l t s o f e p i s t e m o l o g y i n o r d e r t o do e p i s t e m o l o g y . The e m p i r i c a l p h i l o s o p h e r o f s c i e n c e , o n t h e o t h e r h a n d , h a s some s e r i o u s p r o b l e m s . The f i r s t form o f t h e e p i s t e m o l o g i c a l c i r c l e i s p e r h a p s most s t r i k i n g . I n doing philosophy Empirical philosophy o f s c i e n c e i s i t s e l f a s c i e n c e . o f s c i e n c e e m p i r i c a l l y , o n e s h o u l d t h u s f o l l o w s c i e n t i f i c method o r s c i e n t i f i c methods. But o n e o f t h e g o a l s o f t h e e m p i r i c a l p h i l o s o p h y I t t h u s seems o f s c i e n c e i s t o f i n d o u t what s c i e n t i f i c methods a r e . t h a t o n e must a l r e a d y know a t l e a s t t a c i t l y what o n e i s supposed t o f i n d o u t . 3 I f we do n o t a l r e a d y know how t o do s c i e n c e , how c a n we f i n d o u t ( s c i e n t i f i c a l l y ) how t o do s c i e n c e ? The c i r c u l a r i t y i s n o t v i c i o u s . Empirical philosophers of science disavow s e e k i n g any j u s t i f i c a t i o n f o r s c i e n t i f i c knowledge o t h e r t h a n t h e b r o a d e s t p o s s i b l e c o h e r e n c e among o u r t h e o r i e s , i n c l u d i n g o u r t h e o r i e s o f knowledge a c q u i s i t i o n and o u r p e r c e p t u a l b e l i e f s . There i s t h u s n o t h i n g improper i n b e g i n n i n g e m p i r i c a l p h i l o s o p h y o f s c i e n c e a s i t were mid-stream, b e l i e v i n g a l r e a d y t h a t we know s o m e t h i n g t a c i t l y o r c o n s c i o u s l y a b o u t how t o a c q u i r e knowledge. J u s t i f i c a t i o n , although Investigating p h i l o s o p h i c a l l y i n t e r e s t i n g , i s n o t t h e immediate t a s k . s c i e n t i f i c knowledge i n a c c o r d w i t h o u r i n i t i a l c o n c e p t i o n o f s c i e n t i f i c i n v e s t i g a t i o n , we improve and a r t i c u l a t e t h i s c o n c e p t i o n ( a n d r e v i s e o u r p r o c e d u r e s f o r c a r r y i n g o u t t h i s improving and a r t i c u l a t i n g ) a s we proceed. W e a r e n o t g u a r a n t e e d t h a t we w i l l n o t b e f o r c e d t o change o u r minds and o u r p r o c e d u r e s . Although we c a n n o t s t a r t l e a r n i n g a b o u t t h e s c i e n c e s from s c r a t c h , we c a n l e a r n a b o u t t h e s c i e n c e s . This c i r c l e r e m a i n s d i s t u r b i n g , s i n c e many p h i l o s o p h e r s f i n d i t d i f f i c u l t w h o l e - h e a r t e d l y t o eschew s e a r c h i n g f o r j u s t i f i c a t i o n f o r o u r knowledge t h a t g o e s beyond s u c h b r o a d c o h e r e n c e . Contemporary p h i l o s o p h e r s show, however, l i t t l e e n t h u s i a s m f o r any a l t e r n a t i v e . The t a l k o f "coherence" here should not be misconstrued. Since perceptual claims a r e f o r t h e most p a r t knowledge c l a i m s , "coherence" h e r e i n c o r p o r a t e s a s o r t o f correspondence with "reality". When o n e q u e s t i o n s t h e p h i l o s o p h i c a l t h e s e s upon which t h e e m p i r i c a l approach i s based, t h e e p i s t e m o l o g i c a l c i r c l e m a n i f e s t s i t s e l f a g a i n . Suppose some t r a d i t i o n a l p h i l o s o p h e r m a i n t a i n s , a s many h a v e , t h a t t h e r e i s knowledge t o b e g a i n e d i n e p i s t e m o l o g y which i s d i f f e r e n t i n k i n d from t h e e m p i r i c a l knowledge t h e s c i e n c e s p r o v i d e . Such a p h i l o s o p h e r would a c c u s e t h e e m p i r i c a l p h i l o s o p h e r o f s c i e n c e o f a v o i d i n g t h e r e a l e p i s t e m o l o g i c a l t a s k s o f a s s e s s i n g and j u s t i f y i n g ( n o t m e r e l y e x p l a i n i n g ) o u r s c i e n t i f i c knowledge. I n answer t o s u c h a c h a l l e n g e , t h e e m p i r i c a l p h i l o s o p h e r o f s c i e n c e must e i t h e r deny t h a t t h e r e a r e any s u c h j u s t i f i c a t o r y t a s k s o r deny t h a t t h e r e i s any way t o t a c k l e them. But o n what b a s i s i s e i t h e r o f t h e s e d e n i a l s t o b e made? The grounds must t h e m s e l v e s b e t h e r e s u l t s o f e m p i r i c a l p h i l o s o p h y o f s c i e n c e ( o r of n a t u r a l i z e d epistemology) o r an a n t i c i p a t i o n o f t h o s e r e s u l t s . But t h e t r a d i t i o n a l p h i l o s o p h e r o f s c i e n c e d e n i e s t h a t p h i l o s o p h e r s All empirical o u g h t t o r e l y on ( o r o u g h t t o r e l y only on) s u c h g r o u n d s . p h i l o s o p h e r s o f s c i e n c e c a n do i s t o r e p e a t t h e i r ( s c i e n t i f i c ) r e a s o n s

f o r s u r r e n d e r i n g t h e ambitions of t r a d i t i o n a l f o u n d a t i o n a l i s t e p i s t e mology. They c a n , o f c o u r s e , a l s o c r i t i c i z e i n d e t a i l e p i s t e m o l o g i e s which a t t e m p t t o do more. The t h i r d way i n which t h e e p i s t e m o l o g i c a l c i r c l e m a n i f e s t s i t s e l f i s somewhat d i f f e r e n t . Much o f t h e e v i d e n c e upon which e m p i r i c a l p h i l o s o p h y o f s c i e n c e b a s e s i t s c o n c l u s i o n s comes from t h e h i s t o r y o f science. U n l e s s , however, e m p i r i c a l p h i l o s o p h e r s o f s c i e n c e a r e c o n t e n t o n l y t o d e s c r i b e a l l c o g n i t i v e e n t e r p r i s e s w h a t s o e v e r , t h e y must add t o t h e p r e s u p p o s i t i o n s o f t h e i r i n v e s t i g a t i o n s d i s c r i m i n a t i o n s between good and bad s c i e n c e , between s c i e n c e and p s e u d o - s c i e n c e , and between knowledge and c o n j e c t u r e . These i n i t i a l d i s c r i m i n a t i o n s a r e r e v i s a b l e a s t h e inquiry proceeds, but they a r e indispensable. I f an i n v e s t i g a t i o n o f , f o r example, a n economic t h e o r y i s t o c o n t r i b u t e t o u n d e r s t a n d i n g how humans a c q u i r e s c i e n t i f i c knowledge, t h e p h i l o s o p h e r must b e a b l e t o a s s e s s t h a t theory. An informed a s s e s s m e n t demands t h a t o n e & economics--that o n e f i n d s o u t what t h e r e i s t o b e l e a r n e d a t p r e s e n t a b o u t economies. The p h i l o s o p h e r o f economics must be a competent economic t h e o r i s t . S t a n d a r d s t o a s s e s s s c i e n t i f i c work a r e a l s o n e e d e d . Yet t h e s t a n d a r d s o f a s s e s s m e n t and t h e methods t o b e employed i n l e a r n i n g a b o u t economies can o n l y b e a n t i c i p a t e d now. I n t r y i n g t o l e a r n more, p h i l o s o p h e r s need t o r e l y o n a l l t h e knowledge t h e y t h i n k t h e y h a v e , even i f some o f i t i s n o t w e l l founded and t u r n s o u t n o t t o h a v e b e e n knowledge a t T h e r e a r e , however, s p e c i a l d i f f i c u l t i e s when o n e ' s s u b j e c t m a t t e r i s a d i s c i p l i n e l i k e economics, whose c o n c l u s i o n s a r e d i s p u t e d and i m p o r t a n t t o p e o p l e ' s m a t e r i a l i n t e r e s t s . I w i l l return t o t h e s e l a s t d i f f i c u l t i e s below. The f o u r t h form o f t h e e p i s t e m o l o g i c a l c i r c l e c o n c e r n s t h e r e l a t i o n s between e m p i r i c a l p h i l o s o p h y o f s c i e n c e and e m p i r i c a l p h i l o s o p h i c a l i n v e s t i g a t i o n s o f p a r t i c u l a r s c i e n c e s . The c o n c l u s i o n s o f e m p i r i c a l p h i l o s o p h y o f s c i e n c e r e s t l a r g e l y on i n v e s t i g a t i o n o f t h e h i s t o r y o f actual sciences. To t h a t e x t e n t e m p i r i c a l p h i l o s o p h y of s c i e n c e i n g e n e r a l depends o n e m p i r i c a l i n v e s t i g a t i o n s o f p a r t i c u l a r t h e o r i e s , d i s c i p l i n e s , i n c i d e n t s , e t c . General c o n c l u s i o n s i n t h e philosophy of s c i e n c e must r e s t on p a r t i c u l a r i n q u i r i e s i n t o p a r t i c u l a r s c i e n c e s . Yet i n o r d e r t o i n v e s t i g a t e some l i m i t e d a r e a i n s c i e n c e , one n e e d s a great deal of philosophical apparatus. One h a s no c h o i c e e x c e p t h e s i t a n t l y and c r i t i c a l l y t o r e l y on p h i l o s o p h i c a l models o f t h e o r i e s , e x p l a n a t i o n s , l a w s , c o n f i r m a t i o n , o b j e c t i v i t y and t h e l i k e . Once a g a i n t h e p h i l o s o p h e r must a n t i c i p a t e t h e answers t o h i s o r h e r q u e s t i o n s . I f t h e c o n c l u s i o n s o f c u r r e n t p h i l o s o p h y o f s c i e n c e were a l r e a d y w e l l s u p p o r t e d and a l r e a d y m e r i t e d t h e e s t e e m and c o n f i d e n c e o f p h i l o s o p h e r s and s c i e n t i s t s , t h e s e a n t i c i p a t i o n s would n o t b e t r o u b l i n g . But a g r e a t d e a l o f " e s t a b l i s h e d " p h i l o s o p h y o f s c i e n c e i s p o o r l y c o n f i r m e d and h a s been c a s t i n t o d o u b t . I n t h i s l a s t form t h e e p i s t e m o l o g i c a l c i r c l e p r e s e n t s a p r e s s i n g p r a c t i c a l problem. In m y own work c o n c e r n i n g t h e o r i e s o f c a p i t a l and i n t e r e s t , I h a v e made u s e o f w h a t e v e r p h i l o s o p h i c a l wisdom I c o u l d ; b u t t h e l i m i t a t i o n s i n t h a t wisdom h a v e been palpable. Yet t h e r e i s no way t o i n c r e a s e o u r knowledge i n t h e phil o s o p h y o f economics o r t h e p h i l o s o p h y o f s c i e n c e i n g e n e r a l e x c e p t t o r e l y on ( w h i l e a t t e m p t i n g t o improve upon) c o n c l u s i o n s o f t h e p a s t .

Empirical p h i l o s o p h e r s of s c i e n c e a r e caught i n a t l e a s t t h e s e f o u r ways i n t h e e p i s t e m o l o g i c a l c i r c l e . Does t h i s f a c t make d u b i o u s a n e m p i r i c a l a p p r o a c h t o t h e p h i l o s o p h y o f s c i e n c e ? Should we worry a b o u t whether t h e c o n c l u s i o n s o f e m p i r i c a l p h i l o s o p h i c a l i n v e s t i g a t i o n s o f p a r t i c u l a r s c i e n c e s a r e p r e j u d i c e d by t h e p r e s u p p o s i t i o n s w i t h which t h e y b e g i n ? Note t h a t many o f t h e s e p r e s u p p o s i t i o n s come from l e s s s e l f - c o n s c i o u s " i n v e s t i g a t i o n s " o f j u s t t h e same d a t a ( f r o m t h e h i s t o r y o f s c i e n c e and from e x p e r i e n c e o f human l e a r n i n g ) t h a t t h e p h i l o s o p h y o f s c i e n c e now examines more s y s t e m a t i c a l l y . W e a l r e a d y know a good d e a l a b o u t t h e w o r l d and a b o u t how t o g e t knowledge a b o u t t h e w o r l d . Without t h a t knowledge, we c o u l d n o t i n q u i r e i n t o t h e n a t u r e o f o u r knowledge and t h e means o f i t s a c q u i s i t i o n - - b u t t h e n we would l a c k n o t o n l y t h e means t o c a r r y o u t s u c h a n i n v e s t i g a t i o n , b u t a l s o a n o b j e c t t o investigate. I f we r e a l l y l a c k e d even t a c i t knowledge a b o u t how t o a c q u i r e knowledge, we would b e u n a b l e t o f i n d o u t how t o l e a r n by i n v e s t i g a t i n g s c i e n t i f i c a l l y t h e knowledge we had. Not o n l y would we n o t know how t o i n q u i r e , b u t we would have l i t t l e o r no knowledge t o i n q u i r e about. The p o s s i b i l i t y o f d o i n g e p i s t e m o l o g y a r i s e s w i t h t h e p o s s i b i l i t y o f h a v i n g s e r i o u s e p i s t e m o l o g i c a l q u e s t i o n s . One may, o f c o u r s e , h a v e good r e a s o n s t o s u s p e c t b i a s i n p a r t i c u l a r c a s e s . G e n e r a l doubt a b o u t w h e t h e r we can a c h i e v e any knowledge t h r o u g h a n e m p i r i c a l a p p r o a c h t o t h e p h i l o s o p h y o f s c i e n c e on t h e o t h e r hand merely e x p r e s s e s I t may s c e p t i c i s m a b o u t t h e p o s s i b i l i t y o f human knowledge i n g e n e r a l . t u r n o u t , o f c o u r s e , t h a t we a r e u n a b l e i n d o i n g p h i l o s o p h y o f s c i e n c e t o come up w i t h any i n t e r e s t i n g g e n e r a l r e s u l t s .

3.

Philosophy of Science a s a S o c i a l Science

The e m p i r i c a l p h i l o s o p h y o f s c i e n c e , i f i t s e l f a s c i e n c e a t a l l , i s a s o c i a l s c i e n c e (where ' s o c i a l s c i e n c e ' i s u n d e r s t o o d t o i n c l u d e h i s t o r y and p s y c h o l o g y ) . Thus i t may b e t h a t t h e s t r u c t u r e , methods, e t c . , o f p h i l o s o p h y o f s c i e n c e w i l l be u n l i k e t h o s e o f t h e n a t u r a l sciences. Social s c i e n t i f i c n a t u r a l i s t s argue t h a t , i n crucial respects ( g o a l s , methods o f j u s t i f i c a t i o n , l o g i c a l s t r u c t u r e , fundamental o n t o l ogy, o r w h a t e v e r ) , t h e s o c i a l s c i e n c e s a r e o r s h o u l d b e i d e n t i c a l t o t h e n a t u r a l sciences. Anti-naturalists argue f o r an e s s e n t i a l d i f f e r e n c e i n one o r more o f t h e s e r e s p e c t s . The d e b a t e o v e r n a t u r a l i s m , a s t h e I t seems t o me t h a t l a s t two s e n t e n c e s s u g g e s t , i s e x c e e d i n g l y messy. t h e e m p i r i c a l approach t o t h e philosophy o f s c i e n c e ought n o t i t s e l f t o prejudge t h i s debate. Both n a t u r a l i s t s and a n t i - n a t u r a l i s t s o u g h t t o b e a b l e t o adopt e m p i r i c a l approaches t o t h e philosophy of s c i e n c e . Otherw i s e i t i s h a r d t o s e e how t h e p h i l o s o p h y o f s c i e n c e can c o n t r i b u t e t o c l a r i f y i n g and r e s o l v i n g t h e many d i s p u t e s between them. Individual e m p i r i c a l p h i l o s o p h e r s o f s c i e n c e may a n t i c i p a t e t h e r e s o l u t i o n o f t h e debate over naturalism. The e m p i r i c a l a p p r o a c h t o t h e p h i l o s o p h y o f s c i e n c e d o e s n o t p r e s u p p o s e t h a t t h e s t r u c t u r e , methods, e t c . o f t h e s o c i a l s c i e n c e s (and t h u s o f t h e p h i l o s o p h y o f s c i e n c e i t s e l f ) a r e t h e same a s t h o s e o f t h e natural sciences. In f a c t , philosophers of science r a r e l y study t h e s c i e n c e s t h e way p h y s i c i s t s s t u d y motion o r m a t t e r . The a c t u a l p r a c t i c e o f e m p i r i c a l p h i l o s o p h y o f s c i e n c e i s d i v e r s e . Much o f i t w i l l remain

f o r t h e f o r e s e e a b l e f u t u r e more l i k e i n t e l l e c t u a l h i s t o r y t h a n l i k e physics. While t h e o b j e c t o f t h e p h i l o s o p h y o f s c i e n c e i s a l l o f s c i e n c e , i t s s t r u c t u r e ( s ) , m e t h o d o l o g y ( i e s ) and t h e l i k e s h o u l d b e t h a t o f (some of) the s o c i a l sciences. The w o r s t s o c i a l s c i e n t i f i c n a t u r a l i s t s c a n s a y o f t h i s d i s t i n c t i o n i s t h a t i t i s empty. Notice t h a t t h e question of s o c i a l s c i e n t i f i c naturalism is only a s p e c i a l form o f t h e q u e s t i o n o f whether t h e methods, s t r u c t u r e , g o a l s and t h e l i k e a r e , a t a s u i t a b l e l e v e l o f g e n e r a l i t y , o n e and t h e same f o r a l l sciences i n a l l h i s t o r i c a l periods. Although we may sometimes h a v e t o beg t h i s g e n e r a l q u e s t i o n , we s h o u l d n o t f o r g e t t h a t i t i s t h e r e . It should n o t b e a c o n d i t i o n of doing t h e philosophy of s c i e n c e empiricall y t h a t t h i s q u e s t i o n h a v e o n l y o n e answer. O t h e r w i s e we c o u l d n o t l e a r n i t s answer i n d o i n g p h i l o s o p h y .

4.

How t o Do P h i l o s o p h y o f Economics

I f t h e above g e n e r a l view o f t h e p h i l o s o p h y o f s c i e n c e i s c o r r e c t , how i s o n e t o do t h e p h i l o s o p h y o f economics? How i s o n e t o answer a much d e b a t e d q u e s t i o n 1 i k e : " I s microeconomic t h e o r y a good s c i e n t i f i c theory d e s p i t e t h e f a c t t h a t i t s basic lawlike claims appear t o be f a l s e ? " The g e n e r a l t e c h n i q u e - - t o s t u d y t h e works o f e c o n o m i s t s and p h i l o s o p h e r s which d e v e l o p , a p p l y and d i s c u s s t h e t h e o r y - - i s c e r t a i n l y n o t novel. I n t h e a c t u a l c o u r s e o f s u c h s t u d y t h e p h i l o s o p h e r o f economics w i l l h a v e t o r e l y h e a v i l y on t h e t e n t a t i v e r e s u l t s o f contemporary p h i l o s o p h y o f s c i e n c e and on i n i t i a l judgments c o n c e r n i n g t h e n a t u r e and w o r t h o f economic t h e o r y and o f economics a s a d i s c i p l i n e . Merely t o c l a s s i f y and t o o r d e r what o n e f i n d s when r e a d i n g economics books, o n e must h a v e some i d e a o f what a s c i e n c e i s , what a t h e o r y i s , what c o u n t a s l a w s and s o f o r t h . The r i c h n e s s o f p h i l o s o p h i c a l work o n t h e n a t u r a l s c i e n c e s and t h e e x t e n t o f i t s i n f l u e n c e makes i t t e m p t i n g t o suppose t h a t a m o d e r a t e n a t u r a l i s m i s c o r r e c t . Economists t a l k a b o u t t h e i r own work i n many ways. They w r i t e , f o r example, a b o u t " p r i n c i p l e s " , "models", " t h e o r i e s " , "assumptions", and " d e f i n i t i o n s " and make u s e o f p r e v i o u s work by e p i s t e m o l o g i s t s and p h i l o s o p h e r s o f s c i e n c e . To i n t e r p r e t t h e i r comments and t o d e s c r i b e a c c u r a t e l y what t h e y h a v e done, one n e e d s t o know a g r e a t d e a l o f p h i l o s o p h y o f s c i e n c e . How e l s e i s o n e t o d e c i d e whether microeconomic t h e o r y i s even a t h e o r y ? Some o f t h o s e most c r i t i c a l o f t r a d i t i o n a l p h i l o s o p h y o f s c i e n c e and most i n s i s t e n t on t h e need f o r a new e m p i r i c a l p h i l o s o p h y o f s c i e n c e might o b j e c t t h a t we do n o t know enough p h i l o s o p h y now t o u n d e r s t a n d t h e s t r u c t u r e o r methods of microeconomics. T h e r e i s some m e r i t i n t h i s objection, although I b e l i e v e t h a t i t i s overstated. I t would h e l p i f we c o u l d b e g i n w i t h s o l i d and w e l l - c o n f i r m e d p h i l o s o p h i c a l t h e s e s . But no p h i l o s o p h e r of s c i e n c e can now b e g i n w i t h t h e s e , s i n c e t h e y a r e una v a i l a b l e . A p h i l o s o p h e r o f economics s t u d y i n g economic t h e o r y i s i n t h e same p h i l o s o p h i c a l p o s i t i o n a s any e m p i r i c a l p h i l o s o p h e r o f s c i e n c e s e e k i n g knowledge a b o u t t h e s c i e n c e s . The o n l y i m p o r t a n t d i f f e r e n c e is t h a t p h i l o s o p h e r s of p h y s i c s , f o r example, can b e g i n w i t h fewer d o u b t s about t h e worth of t h e p h y s i c s t h e y s t u d y . P h i l o s o p h e r s of physics a r e

They u n l i k e l y e v e r t o c o n c l u d e t h a t Newton was a mediocre p h y s i c i s t . c a n s a f e l y b e g i n by r e g a r d i n g a l a r g e body o f p h y s i c s a s "good physics". R e v i s i o n s may o f c o u r s e b e needed l a t e r . P h i l o s o p h e r s of p h y s i c s have, however, c o m p a r a t i v e l y few p r a c t i c a l problems d e c i d i n g what t o do when c o n v e n t i o n a l p h i l o s o p h i c a l wisdom does n o t f i t t h e "good p h y s i c s " studied. The d i f f i c u l t i e s f a c i n g a p h i l o s o p h e r o f economics a r e much greater. Yet I do n o t t h i n k t h a t t h i s c o n t r a s t w i t h p h i l o s o p h y of p h y s i c s shows t h a t we s h o u l d p o s t p o n e p h i l o s o p h i c a l e x a m i n a t i o n o f more dubious s c i e n c e s l i k e economics. What we l e a r n a b o u t knowledge a c q u i s i t i o n i n p h y s i c s may n o t a p p l y t o economics. Even i f i t d o e s , p h i l o s o p h e r s o f economics w i l l p r o b a b l y have t o f i n d t h i s o u t t h r o u g h t h e i r i n v e s t i g a t i o n s o f economics. Furthermore, a l t h o u g h t h e p r a c t i c a l d i f f e r e n c e s between t h e t a s k s o f p h i l o s o p h e r s o f economics and p h i l o s o p h e r s of physics a r e considerable, they a r e d i f f e r e n c e s i n degree, not i n kind. P h i l o s o p h e r s o f p h y s i c s c a n h a r d l y assume t h a t Newton o r E i n s t e i n never blundered. How a r e p h i l o s o p h e r s o f economics t o p r o c e e d , i f t h e y c a n n o t simply import c a t e g o r i e s and t h e s e s c o n c e r n i n g t h e o r i e s , l a w s and s o f o r t h upon which p h i l o s o p h e r s a g r e e ? When microeconomics f a i l s t o f i t c u r r e n t philosophical conceptions, philosophers cannot automatically conclude t h a t something i s wrong w i t h microeconomics. P h i l o s o p h e r s o f economics w i l l have t o t r i m , r e v i s e and even i n v e n t p h i l o s o p h i c a l c a t e g o r i e s and t h e s e s i n t r y i n g t o make s e n s e of economic t h e o r y . They can n e i t h e r s t a r t from s c r a t c h n o r r e l y on a u t h o r i t a t i v e p h i l o s o p h i c a l d i c t a . C a u t i o u s l y and c r i t i c a l l y , t h e p h i l o s o p h e r o f economics must make u s e o f t h e most p l a u s i b l e among c u r r e n t p h i l o s o p h i c a l views of t h e s c i e n c e s , a s i l l - f o u n d e d and wrong-headed a s t h e y may be. There i s no a l t e r n a t i v e . To make s e n s e o f , f o r example, microeconomic t h e o r y , one n e e d s n o t o n l y p h i l o s o p h i c a l a p p a r a t u s t o s y s t e m a t i z e what one f i n d s , b u t a l s o a n i d e a of t h e s o r t o f s e n s e t o make of t h e t h e o r y . H i s t o r i e s f u l l of r a t i o n a l decision-making and d e b a t e c e r t a i n l y make s e n s e , b u t s o do h i s t o r i e s f u l l of s t u p i d i t y , s t u b b o r n n e s s , d i s h o n e s t y and i d e o l o g i c a l d i s t o r t i o n . When t h e e c o n o m i s t ' s p r a c t i c e c o n f l i c t s w i t h t h e p h i l o s o p h e r ' s d i c t a , which s h o u l d b e c r i t i c i z e d ? The q u e s t i o n a r i s e s f r e q u e n t l y C o n t r o v e r s i e s c o n c e r n i n g t h e m e r i t s of economic t h e o r i e s o f t e n , f o r example, do n o t r e s e m b l e p h i l o s o p h i c a l models o f how s c i e n t i s t s a s s e s s competing t h e o r i e s . Should one "make s e n s e " of s u c h c o n t r o v e r s i e s a s a d i f f e r e n t s o r t of r a t i o n a l d e b a t e o r s h o u l d o n e "make s e n s e " o f them by c o n c l u d i n g t h a t t h e y a r e s h o t - f u l l o f c o n f u s i o n , m i s u n d e r s t a n d i n g and i d e o l o g i c a l d i s t o r t i o n ? Obvious answers may b e d e c e p t i v e . Perhaps t h e r e a r e u n f a m i l i a r methods o r s t r u c t u r e s of s c i e n c e s which a r e of g r e a t v a l u e . Yet we must make s u c h a s s e s s m e n t s . The d i f f i c u l t i e s a r e a g g r a v a t e d b e c a u s e we know t h a t d i s c u s s i o n s of economic i s s u e s a r e o f t e n b i a s e d and d i s t o r t e d b e c a u s e of t h e i r i m p o r t a n c e t o i n t e r e s t s o f i n d i v i d u a l s of v a r i o u s s o c i a l groups. A s Marx l u r i d l y p u t i t : "In t h e domain o f P o l i t i c a l Economy, f r e e s c i e n t i f i c i n q u i r y meets n o t merely t h e same enemies a s i n a l l o t h e r domains. The

p e c u l i a r n a t u r e o f t h e m a t e r i a l i t d e a l s w i t h summons a s f o e s i n t o t h e f i e l d o f b a t t l e t h e most v i o l e n t , mean a n d m a l i g n a n t p a s s i o n s o f t h e human b r e a s t , t h e F u r i e s o f p r i v a t e i n t e r e s t . " (1867, p . 1 0 ) . A l t h o u g h I am s c e p t i c a l o f t h e p o s s i b i l i t y o f f i n d i n g a c o m p l e t e l y n e u t r a l s t a r t i n g p o i n t and o f a v o i d i n g commitments, t h e p h i l o s o p h e r o f economics c a n a d d r e s s a b r o a d e r a u d i e n c e and a w i d e r s p e c t r u m of i s s u e s i f h e o r s h e d o e s n o t s t a r t by t a k i n g n e o - c l a s s i c a l ( o r M a r x i a n , o r i n s t i t u t i o n a l i s t o r m o n e t a r i s t ) e c o n o m i c s a s t h e p a r a d i g m f o r what e c o n o m i c s s h o u l d be. The p h i l o s o p h y o f e c o n o m i c s must s t r u g g l e t o a v o i d becoming a p o l o g e t i c s f o r any s c h o o l of economics. M y own work l e a d s me t o b e l i e v e t h a t t h e t a s k o f t h e p h i l o s o p h e r o f economics s h o u l d b e t o show t h a t t h e s t a t e a n d d e v e l o p m e n t o f economics manifest imperfect r a t i o n a l i t y . The s t a n d a r d o f s c i e n t i f i c r a t i o n a l i t y comes, a s i t m u s t , f r o m e x i s t i n g p h i l o s o p h y o f s c i e n c e a s i n a d e q u a t e a s i t may b e . One s h o u l d e x p e c t t o f i n d d e v i a t i o n s b e c a u s e o f t h e F u r i e s ' i n f l u e n c e , b u t I b e l i e v e t h a t t h e s e w i l l b e i m p o r t a n t e x c e p t i o n s and complications, not t h e center of t h e s t o r y . I f one s u c c e e d s i n prov i d i n g a c o m p e l l i n g a c c o u n t t h a t i s i n a c c o r d a n c e w i t h t h e s e expect a t i o n s , one thereby provides evidence (not proof) t h a t t h e s e expectations a r e correct. S e e k i n g t o f i n d i m p e r f e c t r a t i o n a l i t y i n e c o n o m i c s comes down t o l o o k i n g f o r good r e a s o n s f o r w h a t e v e r o n e f i n d s u n l e s s t h e r e a r e s p e c i f i c grounds t o e x p e c t o r t o s u b s t a n t i a t e b i a s . Given t h e d u b i o u s n e s s o f many o f t h e c o n c l u s i o n s o f e c o n o m i c s , i t i s c r u c i a l t o d i s t i n g u i s h c a r e f u l l y between j u d g i n g t h e e n t e r p r i s e t o b e r a t i o n a l and j u d g i n g i t s r e s u l t s t o b e c o r r e c t . When, a c c o r d i n g t o t h e s t a n d a r d s o f a c c e p t e d p h i l o s o p h y o f s c i e n c e , some f e a t u r e o f , f o r e x a m p l e , m i c r o economics a p p e a r s i r r a t i o n a l , o n e s h o u l d l o o k b o t h f o r ways o f i m p r o v i n g t h e p h i l o s o p h i c a l model a n d f o r e v i d e n c e o f t h e i n f l u e n c e o f i d e o l o g y o r of simple e r r o r . I know o f no p r e c i s e r u l e s t o d e c i d e s u c h c a s e s .

5.

Conclusion

The methodology o f t h e p h i l o s o p h y o f e c o n o m i c s i s t h u s v a g u e a n d I t h a r d l y e v i d e n c e s a d r a m a t i c new a p p r o a c h t o t h e p h i imprecise. losophy of s c i e n c e , such a s t h e empirical approach might i n i t i a l l y a p p e a r t o b e . What t h e e m p i r i c a l a p p r o a c h i m p l i e s i n p r a c t i c e a r e t h e following: ( 1 ) P h i l o s o p h e r s s h o u l d demand h i s t o r i c a l a n d p s y c h o l o g i c a l e v i d e n c e f o r t h e i r c o n c l u s i o n s a n d , i n s o f a r a s t h a t e v i d e n c e is s c a n t y (which i t h a s b e e n ) , s h o u l d b e h e s i t a n t a b o u t a c c e p t e d p h i l o s o p h i c a l "wisdom" c o n c e r n i n g t h e s c i e n c e s . (2) Philosophers of s c i e n c e should b e more w i l l i n g t o s t u d y a n d t o l e a r n f r o m p a r t i c u l a r s c i e n c e s t h a n t h e y s o m e t i m e s h a v e b e e n . Much c a n , I t h i n k , b e l e a r n e d by e m p l o y i n g t h i s homey a d v i c e .

Notes ' 1 am i n d e b t e d t o P h i l i p E h r l i c h , M i c h a e l G a r d n e r , J o n a t h a n L i e b e r s o n , Stephen S t i c h and P a u l Thagard f o r c r i t i c i s m o f e a r l i e r v e r s i o n s and t o u n p u b l i s h e d work o f Dudley S h a p e r e .

zone m i g h t a r g u e t h a t a s c i e n t i f i c e x p l a n a t i o n o f knowledge a c q u i s i t i o n i s i n c o n c e i v a b l e b e c a u s e e m p i r i c a l s c i e n t i s t s c a n n o t e x p l a i n why some methods o f a c q u i r i n g b e l i e f s j u s t i f y b e l i e f s w h i l e some do n o t . D e t e r mining t h e s t a n d a r d s f o r j u s t i f i e d b e l i e f is n o t and cannot b e t h e t a s k o f a n y e m p i r i c a l s c i e n c e . I do n o t f i n d t h i s c l a i m c o m p e l l i n g . A p s y c h o l o g i s t m i g h t , by means o f s u f f i c i e n t l y c u n n i n g e x p e r i m e n t s , b e a b l e t o show t h a t c e r t a i n methods o f a c q u i r i n g b e l i e f s a r e more l i k e l y t o l e a d t o t r u e b e l i e f s i n c e r t a i n c i r c u m s t a n c e s t h a n are o t h e r s . I f t h e p s y c h o l o g i s t c o u l d m o r e o v e r show u s why some g r o u n d s f o r b e l i e v i n g l e a d t o more r e l i a b l e b e l i e f s , t h e n h e o r s h e would b e i n a p o s i t i o n t o e x p l a i n how i n c e r t a i n c i r c u m s t a n c e s p e o p l e a c q u i r e knowledge. There a r e o b v i o u s l y many c i r c u l a r i t i e s h e r e , b u t I a r g u e i n t h e body o f t h e I t h u s s e e no r e a s o n t o b e l i e v e i t impospaper t h a t they a r e benign. s i b l e t h a t we c a n e x p l a i n how we know what we d o .

31 d o u b t t h a t t h e d i s t i n c t i o n b e t w e e n knowing how a n d knowing t h a t i s s h a r p a n d s i g n i f i c a n t enough t o p r o v i d e a way o u t o f s u c h c i r c u l a r i t y , although I cannot argue t h e c a s e here.

4~ince e m p i r i c a l p h i l o s o p h e r s o f s c i e n c e must b e g i n by d i s c r i m i n a t i n g knowledge f r o m s u p e r s t i t i o n a n d s c i e n c e from p s e u d o - s c i e n c e , i s n o t t h e way o p e n f o r a s t r o l o g e r s , f o r e x a m p l e , t o b e g i n by r e g a r d i n g a s t r o l o g y a s t h e p a r a d i g m o f a s c i e n c e ? Might t h e y n o t t h e n come up w i t h a n e m p i r i c a l p h i l o s o p h y o f s c i e n c e w h i c h shows how we c a n a c q u i r e s u c h a s t r o l o g i c a l knowledge? A f t e r a l l , a c r u c i a l t e s t , among a s t r o l o g e r s , f o r any p h i l o s o p h i c a l account of s c i e n c e w i l l b e whether it successf u l l y shows u s how we c a n know a s t r o l o g y . But i f a s t r o l o g e r s c a n i n v e n t an empirical philosophy of s c i e n c e t h a t " j u s t i f i e s " t h e claims of a s t r o l o g y , what d o e s o u r e m p i r i c a l p h i l o s o p h y o f s c i e n c e , which c r i t i c i z e s a s t r o l o g y , a c c o m p l i s h ? The a r g u m e n t i s d e c e p t i v e . A l t e r n a t i v e philosophies of science a r e , I suspect, not e a s i l y created. Astrologers who a t t e m p t t o come up w i t h a n a t u r a l i z e d e p i s t e m o l o g y w h i c h c o h e r e s w i t h b o t h t h e i r p u r p o r t e d knowledge o f a s t r o l o g y a n d t h e i r n o n - a s t r o l o g i c a l knowledge o f t h e e v e r y d a y w o r l d w i l l f a c e a d i f f i c u l t t a s k . I f t h e y f i n d t h a t e p i s t e m o l o g y i s t o b e d o n e a s a n o n - a s t r o l o g i c a l s c i e n c e i s done, they w i l l discover t h a t t h e i r attachment t o astrology is i r r a t i o n a l . I f t h e y d e v e l o p some o t h e r s o r t o f e p i s t e m o l o g y , t h e y m i g h t ( i n some s e n s e ) b e a b l e t o come up w i t h a c o h e r e n t body o f knowledge. Y e t t h i s body o f knowledge would h a v e t o b e s o d i f f e r e n t from o u r s , t h a t o u r i n a b i l i t y t o show t h e a s t r o l o g e r s t h a t t h e y a r e i n e r r o r i s n o t s o disturbing. Once we deny t h a t t h e r e i s a n y c e r t a i n o r s e l f - e v i d e n t f o u n d a t i o n f o r human knowledge, t h e p o s s i b i l i t y o f c o n s i s t e n t a n d i n commensurable knowledge s y s t e m s c a n n o t b e d e n i e d . The f a c t t h a t t h e a s t r o l o g e r ( o r theologian o r paranoid) begins with d i f f e r e n t b e l i e f s d o e s n o t , h o w e v e r , i t s e l f show t h a t s u c h incommensurable knowledge systems can b e constructed.

References Hausman, D. M. ( F o r t h c o m i n g ) , A P h i l o s o p h i c a l I n q u i r y i n t o C a p i t a l Theory. New York: Columbia U n i v e r s i t y P r e s s . H e g e l , G.W.F. ( 1 8 1 7 ) . EncyklopXdie d e r p h i l o s o p h i s c h e n W i s s e n s c h a f t e n i n G r u n d r i s s e . E r s t e r T e i l . H e i d e l b e r g : A . O s w a l d . ( T r a n s l a t e d by W i l l i a m W a l l a c e a s fJegel's L o g i c . ( P a r t One o f t h e E n c y c l o p e d i a o f t h e P h i l o s o p h i c a l S c i e n c e s . ) Oxford: Clarendon P r e s s , 1975.) Marx, K a r l . (1867). Das K a p i t a l , V o l . 1. Hamburg: 0 . M e i s s n e r . ( T r a n s l a t e d by Samuel Moore a n d Edward A v e l i n g a s C a p i t a l , V o l . 1. New York: I n t e r n a t i o n a l P u b l i s h e r s , 1967.) Quine, W . V. 0 . ( l 9 6 9 ) , "Epistemology N a t u r a l i z e d . " I n O n t o l o g i c a l R e l a t i v i t y a n d O t h e r E s s a y s . New York: Columbia U n i v e r s i t y P r e s s . P a g e s 69-90.