Table of Contents

Handbook on the History of Economic Analysis Volume III

Handbook on the History of Economic Analysis Volume III

Developments in Major Fields of Economics

Edited by Gilbert Faccarello and Heinz D. Kurz

Volume III contains entries on the development of major fields in economics from the inception of systematic analysis until modern times. The reader is provided with succinct summary accounts of the main problems, the methods used to address them and the results obtained across time. The emphasis is on both the continuity and the major changes that have occurred in the economic analysis of problematic issues such as economic growth, income distribution, employment, inflation, business cycles and financial instability. Each Handbook can be read individually and acts as a self-contained volume in its own right. It can be purchased separately or as part of a three-volume set.

Chapter 13: Economics and philosophy

Hartmut Kliemt

Subjects: economics and finance, history of economic thought

Extract

The man of system . . . is apt to be very wise in his own conceit; and is often so enamoured with the supposed beauty of his own ideal plan of government, that he cannot suffer the smallest deviation from any part of it. He goes on to establish it completely and in all its parts, without any regard either to the great interests, or to the strong prejudices which may oppose it. He seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chess-board. He does not consider that the pieces upon the chess-board have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess-board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might chuse to impress upon it. If those two principles coincide and act in the same direction, the game of human society will go on easily and harmoniously, and is very likely to be happy and successful. If they are opposite or different, the game will go on miserably, and the society must be at all times in the highest degree of disorder. (Smith 1759 [1982]: 233–4) Philosophers and economists alike tend to think of Adam Smith as the founding father of economics and of his Wealth of Nations as its founding document. Yet Adam Smith was a prescient critic of assuming rational homo oeconomicus behaviour across the board, not a supporter of this explanatory strategy. The economic philosophy underlying neo-classical economics and the so-called economic imperialism that arose from it is Hobbesian rather than Smithian. It rests on and still expresses Thomas Hobbes’s vision of a universal social theory that should, first, be unfolded by spelling out the implications of the homo oeconomicus model “more geometrico” and, secondly, restrict normative argument and practical advice to pointing out means to the (“given”) ends of its addressees.

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