Philosophy of Economics

After a general philosophical introduction, this chapter discusses the meaning and nature of a “pure” science of economics, both as an analytical and a classificatory conception. This discussion leads to the nature of abstraction, idealization, ideal objects, and the production of abstract mathematical theories in economics, which gives rise to Walras’ problem, namely that of “returning to reality” (or producing empirical claims by means of abstract idealized theories) once one such theory has been concocted. The different epistemological views — attempts at solving Walras’ problem — on economics are presented, keeping in view the concept of empirical claim. Another way of producing empirical claims is attempted through the method of fundamental measurement, to which the penultimate section is devoted, in which proofs of the main theorems on ordinal and cardinal utility are discussed. The chapter closes with a discussion on the philosophical problems faced by any attempt at relating economics with other disciplines.