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The philosophy of economics is the branch of philosophy which studies philosophical issues relating to economics. It can also be defined as the branch of economics which studies its own foundations and status as a moral science.


Scope of the philosophy of economics


Definition and ontology of economics

The first question usually addressed any subfield of philosophy (the philosophy of X) is "what is X?" A philosophical approach to the question "what is economics?" is less likely to produce an answer than it is to produce a survey of the definitional and territorial difficulties and controversies.

Ontological questions continue with further "what is..." questions addressed at fundamental economic phenomena, such as "what is (economic) value?", "what is a market?". While it is possible to respond to such questions with real verbal definitions, the philosophical value of posing such questions actually aims at shifting entire perspectives as to the nature of the foundations of economics. In the rare cases that attempts at ontological shifts gain wide acceptance, their ripple effects can spread throughout the entire field of economics.

Methodology and epistemology of economics

Main article: Economic methodology

An epistemology deals with how we know things. In the philosophy of economics this means asking questions such as: what kind of a "truth claim" is made by economic theories - for example, are we claiming that the theories relate to reality or perceptions? How can or should we prove economic theories - for example, must every economic theory be empirically verifiable? How exact are economic theories and can they lay claim to the status of an exact science - for example, are economic predictions as reliable as predictions in the natural sciences, and why or why not? Another way of expressing this issue is to ask whether economic theories can state "laws". Philosophers of science have explored these issues intensively since the work of Alexander Rosenberg and Daniel Hausman in the 1970s.

Game theory and economic agents

Main articles: game theory, decision theory

Game theory is shared between a number of disciplines, but especially mathematics, economics and philosophy. Game theory is still extensively discussed within the field of the philosophy of economics. Decision theory is closely related to game theory and is likewise very strongly interdisciplinary. Philosophical approaches in decision theory focus on foundational concepts in decision theory - for example, on the natures of choice or preference, rationality, risk and uncertainty, economic agents.

Ethics of economic systems

The ethics of economic systems deals with the issues such as how it is right (just, fair) to keep or distribute economic goods. This area overlaps strongly with other disciplines. Approaches are regarded as more philosophical when they study the fundamentals - for example, John Rawls' A Theory of Justice (1971) and Robert Nozick's Anarchy, State and Utopia (1974).

Utilitarianism, one of the ethical methodologies, has its origins inextricably interwoven with the emergence of modern economic thought. Today utilitarianism has spread throughout applied ethics as one of a number of approaches. Non-utilitarian approaches in applied ethics are also now used when questioning the ethics of economic systems - e.g. rights-based (deontological) approaches.

Many political ideologies have been an immediate outgrowth of reflection on the ethics of economic systems. Marx, for example, is generally regarded primarily as a philosopher, his most notable work being on the philosophy of economics.

Non-mainstream economic thinking

The philosophy of economics defines itself as including the questioning of foundations or assumptions of economics. The foundations and assumption of economics have been questioned from the perspective of noteworthy but typically under-represented groups. These areas are therefore to be included within the philosophy of economics.

  • Cross-cultural perspectives on economics: an example is the Buddhist-inspired Bhutanese "Gross National Happiness" concept (suggested as a better development measure than GNI/GDP). Amartya Sen is a renowned advocate for the integration of cross-cultural phenomena into economic thinking ("It may be well asked why anyone should try to lecture the World Bank on culture." [1]) Related area: economic anthropology.
  • Feminist perspectives on economics: e.g. Drusilla Barker & Edith Kuiper eds., Towards a feminist philosophy of economics. Routledge. 2003. ISBN 0-415-28388-4.  ; see also feminist economics.

Important figures

Related disciplines

The ethics of economic systems is an area of overlap between business ethics and the philosophy of economics. People who write on the ethics of economic systems are more likely to call themselves 'political philosophers' than business ethicists or economic philosophers. There is significant overlap between theoretical issues in economics and the philosophy of economics. As economics is generally accepted to have its origins in philosophy, the history of economics overlaps with the philosophy of economics.


  • Caldwell, Bruce (1987). "positivism," The New Palgrave: A Dictionary of Economics, v.3, pp.921-23.
  • Downie, R.S. (1987). "moral philosophy," The New Palgrave: A Dictionary of Economics, v. 3, pp. 551-56.
  • Hausman, Daniel M., and Michael S. McPherson (1996). Economic Analysis and Moral Philosophy. New York: Cambridge University Press. ISBN 0-521-55850 6.  
  • Hodgson, Bernard (2001). Economics as Moral Science. Description and chapter-preview links, pp. xi-xiv.
  • Putnam, Hillary (2002). The Collapse of the Fact/Value Dichotomy and Other Essays, Ch. 3, "Fact and Value in the World of Amartya Sen," and Part 2, "Rationality and Value." HUP. Description.
  • Robinson, Joan (1962). Economic Philosophy. Searchable chapter-preview links.
  • Walsh, Vivian (1961). Scarcity and Evil. Prentice-Hall.
  • _____ (1987). "philosophy and economics," The New Palgrave: A Dictionary of Economics, v. 3, pp. 861-869.


External links


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