Philosophy of Economics

Recent economic challenges in both Dutch and European society suggest that it is more important than ever to reflect critically about economic policy-making, the models used by economists, and the ethical implications of economic decisions. Policy-makers and the public alike are asking tough and fundamental questions about economics as a discipline, and the economic underpinnings of policymaking. While such questions are sometimes debated in a wide-ranging and general way, they often connect directly to what are specific challenges also from a philosophical perspective.

Philosophical issues are: the methodological and ethical aspects of discounting the future, well-being, sustainability, inequality, long-term policy making, the relation between incentives, preferences and motives, the vexed relations between case studies and general policy, and the role of economic expertise in a democracy. This area of theoretic philosophy has a lasting tradition in the Faculty and the University, codified in the internationally renowned Erasmus Institute for the Philosophy of Economics (EIPE).

Erasmus Institute for the Philosophy of Economics

Contemporary economics addresses many questions that are often considered ‘philosophical’, and many core issues in philosophy are to some extent ‘economic’. Indeed, the separation of economics and philosophy into fully distinct domains of enquiry is a relatively recent phenomenon, and is to a large extent artificial.

The most important points of contact between philosophy and economics are in the areas of theory, methodology, rationality, and ethics. At EIPE, we study these four areas from a philosophical perspective. What is special about EIPE is that in doing so we engage with how economics is actually practiced by economists. We make explicit, articulate and critically discuss what can remain implicit and opaque in economics.

Theory

In the area of theory we analyse the manner in which economics makes implicit assumptions about the underlying ontology, causation and the relation between the individual and the social. To provide a perspective on economic research as practised by the mainstream, we research both the history of the discipline and heterodox approaches. Particular historical periods and historical economists we focus on include early macroeconomics, Lionel Robbins, John Maynard Keynes and Keynesianism. Among the heterodox approaches, we have special strengths in evolutionary and institutionalist economics and, more specifically, look at generalised Darwinism, ontology, historical specificity and evolutionary game theory.

Methodology

In the area of methodology, we study the myriad of ways in which the products of economics such as predictions, explanations, and theories are created using models, experiments, statistical analysis and other methods. Consequently, the boundaries between economics and philosophy are especially fluid here. At EIPE, we have research strengths in virtually all areas of methodology, including scientific explanation, causation, measurement, experimentation, thought experiments and simulation, case studies, models and idealisation.

Rationality

In the area of rationality, we study preferences and choices by individuals and groups, as analysed in the various branches of rational choice theory. These branches, especially individual decision theory, game theory and social choice, form an important building block of modern microeconomics. We analyse in how far economic theory can be built on rational choice theory and what kinds of limitations such an approach entails. Members of EIPE are specifically interested in models of social choice and intertemporal decision and game theory.

Ethics

In the area of ethics, we study the how theories, concepts and facts in economics  presuppose ethical commitments. At EIPE we contribute to research and teaching on ethical issues in so far as they relate to economics, especially on the evolutionary foundations of ethics, implicit moral judgements in economic measurement, justifying the aims of economics as a science and the appropriateness of research methods to the purposes of science.

At EIPE, we think that philosophical research on the methodological and foundational  aspects of economics has to proceed in close contact to economics. EIPE members  contribute to research in all of those four fields of enquiry by organising and presenting at international workshops and conferences and publishing in leading journals.