Philosophy of Economics: A Heterodox Introduction

181 Pages·2021·6.753 MB·English

by  Oliver Schlaudt

VOICES ON THE GERMAN EDITION
Oliver Schlaudt has written a very readable introduction to the philosophy of
economics. Anyone who wants to deal with the subject should pick up this book
[...]. With his book, Schlaudt makes an important contribution [to] the formation
of a genuine philosophy of economics.
— Christian Neuhäuser in Deutsche Zeitschrift für
Philosophie
Brilliant plea for a political and ecological economy [...]. Sharp, subtle, truly phil-
osophical analysis [...]. Apocalypses can hardly be explained more soberly, and a
greater compliment can hardly be paid to a philosopher.
— Reinhard Mehring in Philosophischer Literaturanzeiger
The more fundamental the problem, the more helpful are specialists on the big
issues [...]. Schlaudt explains conclusively why economists find it difficult to
analyze conflicts between economic process and ecological sustainability.
— Norbert Häring in Handelsblatt

PHILOSOPHY OF ECONOMICS
Philosophy of Economics: A Heterodox Introduction provides an introduction to the
philosophy of economics through the prism of heterodoxy.
Heterodox economics covers a range of approaches and schools of thought
but what they have as a common denominator is the conviction that economic
phenomena cannot be understood, and thus must not be studied, in isolation from
their relevant context. Conversely, the current form of neoclassical economics
emerged from the conviction that there is something like economic rationality
sui generis which can be treated independently from all other aspects of our
world, social or natural. Heterodox approaches challenge this conviction, from
a variety of angles: the economic actor is not isolated, but lives in society which
shapes him; market goods are only one kind of goods among others, constituting
a larger set with ambiguous and shifting inner frontiers; production of goods
takes place within nature, is subjected to physical laws and induces in most cases
ecologically problematic fluxes of matter (e.g. waste); finally, the whole eco-
nomic process in general is not in equilibrium, but shows secular trends through
which it is connected to the historical world. This book demonstrates the vitality
of these heterodox challenges from a philosophical point of view because not
only do they formulate new hypotheses within economics, but they challenge
economic theory on a much more fundamental level: how is the economy situ-
ated in the world, and which are the right methods for its investigation?
This book is an ideal introduction for anyone seeking alternative or critical
perspectives on the philosophy of economics and economic theory.
Oliver Schlaudt teaches philosophy of science and political philosophy at the
Philosophy Department of Heidelberg University, Germany, and at SciencesPo
Paris, France (Campus Nancy). His main research interests include philosophy
of science, philosophy of economics, philosophy of technology and cognitive
archaeology.
Economics and Humanities
Series Editor: Sebastian Berger, University of the West of England
(UWE Bristol), UK.
The Economics and Humanities series presents the economic wisdom of the hu-
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economic phenomena and their meanings to come into the open more fully;
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truth is thus shown to arise from the Human rather than the Market.
Readers will gain a foundational understanding of a humanities-based
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PHILOSOPHY OF
ECONOMICS
A Heterodox Introduction
Oliver Schlaudt
Translated from German by Adrian Wilding
First published 2022
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
605 Third Avenue, New York, NY 10158
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© 2022 Oliver Schlaudt
The right of Oliver Schlaudt to be identified as author of this work
has been asserted by him in accordance with sections 77 and 78 of the
Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced
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British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
Names: Schlaudt, Oliver, author.
Title: Philosophy of economics : a heterodox introduction /
Oliver Schlaudt.
Description: Abingdon, Oxon ; New York, NY : Routledge, 2022. |
Series: Economics and humanities | Includes bibliographical references
and index.
Identifiers: LCCN 2021020286 (print) | LCCN 2021020287 (ebook) |
ISBN 9781032068480 (hbk) | ISBN 9781032068336 (pbk) |
ISBN 9781003204077 (ebk)
Subjects: LCSH: Economics—Philosophy. | Economics—
Methodology. | Economics.
Classification: LCC HB72 .S342 2022 (print) | LCC HB72 (ebook) |
DDC 330.1—dc23
LC record available at https://lccn.loc.gov/2021020286
LC ebook record available at https://lccn.loc.gov/202102028
This work was published originally in the German language under
the title Wirtschaft im Kontext: Eine Einfuhrung in die Philosophie der
Wirtschaftswissenschaft in Zeiten des Umbruchs, © Vittorio Klostermann
GmbH, Frankfurt am Main, 2016.
ISBN: 978-1-032-06848-0 (hbk)
ISBN: 978-1-032-06833-6 (pbk)
ISBN: 978-1-003-20407-7 (ebk)
DOI: 10.4324/9781003204077
Typeset in Bembo
by codeMantra
CONTENTS
List of figures ix
List of tables xiii
List of boxes xv
Acknowledgements and credits xvii
Introduction 1
1 Orthodox economics: the illusion of autonomy 11
1.1 Economics – an overview 11
1.2 The theory of general equilibrium 13
1.3 Autonomy, reversibility, infinity 30
1.4 A social science despite itself 33
2 The economy in a social world: ‘rational man’ in society 36
2.1 The logical misery of neoclassical economics 36
2.2 Empirical pitfalls 44
2.3 Free decisions or structural constraints? 59
2.4 Power 64
3 The economy in a common world: at the boundaries
of the market and private property 71
3.1 The ‘tragedy of the commons’ 71
3.2 Knowledge: private property or common good? 79
3.3 Unpaid work 86
viii Contents
4 The economy in a finite world: ecological economics 96
4.1 Growth 96
4.2 How much is the World? 106
4.3 Devil’s dust 113
5 The economy in a historical world: global and
historical perspectives 124
5.1 Metaphors or theories? 124
5.2 World history 126
5.3 Crisis 135
5.4 The future 142
Bibliography 145
Subject and Author Index 159
FIGURES
I.1 Economy in context 7
1.1 Micro- and macroeconomics 13
1.2 De Scitovsky’s paradox: both the transition from X to Y and
its reverse represent a potential Pareto improvement 27
1.3 The Prisoner’s Dilemma 29
2.1 The choice paradox formulated by Condorcet in 1785:
the aggregation of preferences regarding different options
according to the majority principle can lead to incoherent
results. For example, when applied to the topic of Brexit:
A: remain, B: hard Brexit, C: soft Brexit; i ndividual 1:
remainer with a preference for clear-cut decisions, individual
2: a nxious Brexiteer, individual 3: resolute Brexiteer 42
2.2 Bounded rationality: dealing with risks may depend on the
way scenarios are presented 48
2.3 Chronological course of mean cooperation in two variants of
the Public Goods Game. (a) The penalty option is deactivated
after six rounds and (b) the punishment option is activated
after six rounds. If the altruistic penalty option is activated,
the cooperation rate and thus the mean payout increase 53
2.4 Frequency chart of the offers in the Ultimatum Game in
international comparison. The size of the circular areas reflects
the number of corresponding offers, the right edge of the
grey bars reflects the average of offers for each group. The
population of Western industrialised nations is represented by
the city of Pittsburgh (USA) 54
2.5 The average offer in the Dictator Game correlates with the
degree of market integration of a society (measured in terms
of the fraction of calories purchased in the market) 55