I am teaching a course this term which is basically an examination of modern libertarian political philosophy and political theory  for PhD students in economics.  But, I am also teaching an advanced topics course in economic theory for PhD students this term.  In the first course, we have so far discussed the evolution of the argument for taming man’s passions, including his passions expressed within the realm of politics.  We used Albert Hirschman’s The Passions and the Interests: Political Arguments for Capitalism Before Its Triumph (Princeton, 1977) to serve as the primary text to discuss this intellectual evolution.  In the past I have used Scott Gordon’s Controlling the State (Harvard University Press, 2002), but that is a much more historical rather than philosophical treatment of the issue — though getting that history right is vital to the exercise.  In my advanced topics course, our preoccupation so far has been on rationality and equilibrium modeling, and we have been focusing our reading on a variety of text and journal articles.  This week we discussed a paper by Paul Anand from The Economic Journal, on the issue of intransitivity and rationality in choice.  As luck would have it, Mario Rizzo — who is teaching a course on behavioral economics this term at NYU — just posted about this issue, and why being rational might not always be rational.  Restating last night’s conversation, however, is not my intent with this post, but rather I’d like to perhaps stimulate a discussion on what actually is the relationship between economics and philosophy.  In the Anand paper, he argues explicitly that while economists have freely borrowed and engaged the literature in psychology over human choice (e.g., consider Daniel Kahneman’s Thinking, Fast and Slow), they have failed to engage as seriously the philosophical literature in decision theory and action theory (e.g., Donald Davidson).  Reading that claim made me think — what exactly should the relationship between economics and philosophy be in the modern academic discourse.

My disciplinary training is squarely within economics, though I minored in philosophy as an undergraduate, and I devoted a considerable amount of time as a graduate student studying the philosophy of science under the guidance of my dissertation adviser Don Lavoie.  And while I have written a number of articles on the method and methodology of economics, my primary research has been in applied political economy that has drawn on the disciplines of history, politics and sociology far more than pure philosophy.  At GMU, besides my position in economics, I am a faculty member of the Department of Philosophy, Honors College, Russian Studies, and Center for Global Studies, and I have taught in the School of Law, and served on many dissertations in the School of Public Policy.  In each of my intellectual forays into interdisciplinary work, economics provides the guiding framework (perhaps arrogantly so).  Sociology might provide interesting questions, but it is within the argumentative structure of economics that answers are to be found.  Historical data has no meaning until made intelligible by way of economic analysis.  Politics may be an interesting subject matter, but again it is economics that provides the analytical lens to make sense of political behavior from voting to revolutions.  And, in political theory I think the position staked out by my teacher James Buchanan is the one I am most comfortable with, and serves as the guiding framework for my teaching approach to the course mentioned above.

Within the Buchanan analytical framework the relationship between social philosophy and economics can be understood to reflect the distinction between choice over the rules, and choice within a given set of rules.  Social philosophy examines “what is a good game of life”, but that question cannot be operationalized unless we talk about “what are the good rules that define that game”.  In answering that question, however, we must always be mindful of the strategies that players will play once the rules are established.  In other words, we have to answer “How will the players play the game given those rules?”, and to do that we require the analytical apparatus of economics.  It is the tacking back and forth between “What are the good rules?” and “How will players play given those rules?” that we form a political economy answer to questions of social organization.  This is one of the reasons I am so intrigued by non-ideal theories of justice, as opposed to ideal theorizing — the non-ideal theorizing takes seriously the constraints of treating men as they really are, and seeks to find the pattern of institutions that will allow us to live better together.  In short, it represents philosophy disciplined by economics in order to produce better philosophy.

That is one possible relationship between economics and philosophy in the context of political theory.

On the other hand, there is also the disciplining role of philosophical discourse in the context of economics.  Methodological discussions and the questions of philosophy of science should not just be the peculiar interests of some practicing economists, but should occupy the attention of all economists at least twice in their careers — at the beginning so they can make an informed choice over what sort of economics they want to do, and at the end of their careers as they reflect back on the success or failure of their research endeavors.  Ultimately, methodology matters because it determines not only what one considers interesting questions to pursue, but perhaps more importantly what are acceptable answers to those questions.

How do professional philosophers see the relationship between economics and philosophy?  Is Anand correct that economists could learn as much, if not more, from action theorists as from psychologists on the nature of human choice?  Is Buchanan right that philosophical inquiry into the ‘good society’ must always be tempered by a discussion of self-interest with guile and thus the possibility of strategic opportunism?