Table of Contents

Handbook of Economics and Ethics

Handbook of Economics and Ethics

Elgar original reference

Edited by Jan Peil and Irene van Staveren

The Handbook of Economics and Ethics portrays an understanding of economic methodology in which facts and values, though distinct, are closely interconnected in a variety of ways. From theory building to data collection, and from modelling to policy evaluation, this encyclopaedic Handbook is at the intersection of economics and ethics.

Chapter 20: Fact/Value Dichotomy

Vivian Walsh

Subjects: economics and finance, behavioural and experimental economics, history of economic thought


Vivian Walsh The philosophical roots of the fact/value dichotomy that still haunts neoclassical economics go back at least to David Hume. For Hume, a ‘matter of fact’ was something that one could see, hear, touch, taste or smell. Arguably, this was a reasonable view for a philosopher to adopt in the eighteenth century. In the early twentieth century, however, the new science confronted philosophers with ‘facts’ that could not be perceived nor expressed except in mathematics. This directly destroyed another dichotomy – that between fact and theory – while indirectly undermining the fact/value dichotomy as well. Meanwhile, there was a detailed attack on the fact/value dichotomy by one group of philosophers, and a striking defence of it by another. The attack came from the classical American pragmatists, who argued that facts, theories and values are all necessarily entangled. Since these pragmatists peaked in the late nineteenth and very early twentieth century, however, their work was done before the impact of the new mathematics, logic and science, and was not framed in such a way as to catch the attention of the new science and philosophy. One pragmatist, however, Morton White, was young enough to make important contributions, and these will be discussed later. Logical positivism The logical positivists in Vienna of the 1920s were deeply impressed by the new axiomatic mathematics and logic, and by the new physical science. Their goal was to serve the new science by clarifying the language available for its formalization, eliminating metaphysical vestiges and constructing an ideal...

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