This note suggests that the exercise of measuring poverty in a society is greatly aided by clarity on precisely what one means by “the extent of poverty”. The latter concept may refer to the extent of poverty normalized for population size, or to the extent of poverty not so normalized. Absence of clarity on this distinction – which is both simple and non-trivial – could lead to rather straightforward problems of coherence and consistency in the measurement of poverty.

This paper aims (a) to provide characterizations of realism and instrumentalism that are philosophically interesting and applicable to economics; and (b) to defend instrumentalism against realism as a methodological stance in economics. Starting point is the observation that ‘all models are false’, which, or so I argue, is difficult to square with the realist's aim of truth, even if the latter is understood as ‘partial’ or ‘approximate’. The three cheers in favour of instrumentalism are: (1) Once we have usefulness, truth is redundant. (2) There is something disturbing about causal structure. (3) It's better to do what one can than to chase rainbows.

In a recent article in this journal, D. Wade Hands (1987) reviewed Charles Taylor's two-volume work, Philosophical Papers (1985). Hands predicts that Taylor's work will have no impact on the philosophy of economics. This may indeed turn out to be the case; but if so, it will only be because the profession is not listening. Of course, it is typical of the profession to be more interested in exporting its product than in learning from other disciplines. This is exemplified in Hands's use of the term “philosophy of economics” – philosophy is the handmaiden of the highly successful enterprise of economics. But this journal is called Economics and Philosophy, which means that a conversation requiring an openness and attentiveness is called for between economics and philosophy.

We briefly describe ways in which neuroeconomics has made contributions to its contributing disciplines, especially neuroscience, and a specific way in which it could make future contributions to both. The contributions of a scientific research programme can be categorized in terms of (1) description and classification of phenomena, (2) the discovery of causal relationships among those phenomena, and (3) the development of tools to facilitate (1) and (2). We consider ways in which neuroeconomics has advanced neuroscience and economics along each line. Then, focusing on electrophysiological methods, we consider a puzzle within neuroeconomics whose solution we believe could facilitate contributions to both neuroscience and economics, in line with category (2). This puzzle concerns how the brain assigns reward values to otherwise incomparable stimuli. According to the common currency hypothesis, dopamine release is a component of a neural mechanism that solves comparability problems. We review two versions of the common currency hypothesis, one proposed by Read Montague and colleagues, the other by William Newsome and colleagues, and fit these hypotheses into considerations of rational choice.

Hume is often read as proposing an instrumental theory of decision, in which an agent's choices are rational if they maximally satisfy her desires, given her beliefs. In fact, Hume denies that rationality can be attributed to actions. I argue that this is not a gap needing to be filled. Hume's theory provides a coherent and self-contained understanding of action, compatible with current developments in experimental psychology and behavioural economics. On Hume's account, desires are primitive psychological motivations which do not have propositional content, and so are not subject to the criteria of rational consistency which apply to propositions.

In a series of recent writings, John Roemer (1982a, 1982b, 1985, 1988) has made a provocative claim: exploitation and class are merely second-order concepts within Marxian theory, because both phenomena derive directly from differential ownership of productive assets (DOPA); indeed, exploitation remains a consistent index of economic injustice only if a “property relations” conception of exploitation replaces the common “labor-value” view. In sum, property relations, not the labor exchange, the labor proces, labor values, or even capitalist accumlation should be the central concern of Marxian theory.

The veil of ignorance has been used often as a tool for recommending what justice requires with respect to the distribution of wealth. We complete Harsanyi's model of the veil of ignorance by appending information permitting objective comparisons among persons. In order to do so, we introduce the concept of objective empathy. We show that the veil-of-ignorance conception of John Harsanyi, so completed, and Ronald Dworkin's, when modelled formally, recommend wealth allocations in conflict with the prominently espoused view that priority should be given to the less able in wealth allocation. We finally argue that the veil of ignorance should be rejected as a tool for discovering what justice requires.

In Stabilizing Dynamics (1991) Roy Weintraub provides a history of stability theory from the work of Hicks and Samuelson in the late 1930s to the Gale and Scarf counterexamples in the 1960s. Unlike his earlier work in the history of general equilibrium theory (1979, 1985, 1988) this recent contribution is not an attempt to fit the Walrasian program into the narrow framework of some particular philosophy of natural science (such as Lakatos's methodology of scientific research programs). Rather, the theme in Stabilizing Dynamics is broadly social constructivist. Simply put, the constructivist view of science is “that scientific knowledge itself is constructed socially, in communities of scientists: Knowledge is constructed, not found” (p. 9).

In a series of insightful publications, Philip Pettit and Frank Jackson have argued for an explanatory ecumenism that is designed to justify a variety of types of social scientific explanation of different “grains”, including structural and rational choice explanations. Their arguments are put in terms of different kinds of explanatory information; the distinction between causal efficacy, causal relevance and explanatory relevance within their program model of explanation; and virtual reality and resilience explanation. The arguments are here assessed from the point of view of the illumination they are able to cast on the issue of economics imperialism, the project of privileging rational choice as a unifying basis for explanations. While the Jackson–Pettit arguments turn out to be helpful in specifying some of the ontological and pragmatic constraints on economics imperialism, they are also shown to conflate distinct dimensions in the purported explanantia (such as small grain and particular grain, and the macro and the existentially quantified) and thereby to miss an important class of individualist causal process explanations of social phenomena.

One calls a lot of things propositions. If one sees this, then one can discard the idea Russell and Frege had that logic is a science of certain objects – propositions, functions, the logical constants – and that logic is like a natural science such as zoology and talks about these objects as zoology talks of animals. Like a natural science, it could supposedly discover certain relations. For example, Keynes claimed to discover a probability relation which was like implication, yet not quite implication. But logic is a calculus, not a natural science, and in it one can make inventions but not discoveries.

Giving grounds, however, justifying the evidence, comes to an end; – but the end is not certain propositions' striking us immediately as true, i.e. it is not a kind of seeing on our part; it is our acting, which lies at the bottom of the language-game. (Wittgenstein, 1969, §204)

Some social scientists and philosophers (e.g., James Coleman and Jon Elster) claim that all social facts are best explained by means of a micro-explanation. They defend a micro-reductionism in the social sciences: to explain is to provide a mechanism on the individual level.

The first aim of this paper is to challenge this view and defend the view that it has to be substituted for an explanatory pluralism with two components: (1) structural explanations of P-, O- and T-contrasts between social facts are more efficient than the competing micro-explanations; and (2) whether a plain social fact (as opposed to a contrast) is best explained in a micro-explanation or a structural explanation depends on the explanatory interest. The second aim of the paper is to show how this explanatory pluralism is compatible with ontological individualism.

This paper is motivated by our conviction that explanatory pluralism as defended by Frank Jackson and Philip Pettit is on the right track, but must be further elaborated. We want to supplement their contribution, by (1) introducing the difference between explanations of facts and explanations of contrasts; (2) giving examples from the social sciences, instead of mainly from the natural sciences or common sense knowledge; and (3) emphasizing the pragmatic relevance of explanations on different levels –social, psychological, biological, etc. – which is insufficiently done by Jackson and Pettit.

Assuming that in order to best achieve their goal, individuals adapt their behaviour to the game situation, this paper examines the appropriateness of the Berge behaviour rule and equilibrium as a complement to Nash. We define a Berge equilibrium and explain what it means to play in this fashion. We analyse the rationale of individuals playing in a situational manner, and establish an operational approach that describes the circumstances under which the same individual might play in one fashion versus another.

It is universally agreed that involuntary unemployment is an evil for unemployed individuals, who lose both income and the non-pecuniary benefits of paid employment, and for society, which loses the productive labor that the unemployed are unable to expend. It is nearly as widely agreed that there is at least a prima-facie case for alleviating this evil – for reasons of justice and/or benevolence and/or social order. Finally, there is little doubt that the evils of involuntary unemployment cannot be adequately addressed in contemporary societies without state intervention – whether through monetary or fiscal policies, cash payments or other subsidies to the unemployed, direct provision of employment by the state, or some combination of these measures.

Neuroeconomics illustrates our deepening descent into the details of individual cognition. This descent is guided by the implicit assumption that “individual human” is the important “agent” of neoclassical economics. I argue here that this assumption is neither obviously correct, nor of primary importance to human economies. In particular I suggest that the main genius of the human species lies with its ability to distribute cognition across individuals, and to incrementally accumulate physical and social cognitive artifacts that largely obviate the innate biological limitations of individuals. If this is largely why our economies grow, then we should be much more interested in distributed cognition in human groups, and correspondingly less interested in individual cognition. We should also be much more interested in the cultural accumulation of cognitive artefacts: computational devices and media, social structures and economic institutions.

One widely used method for allocating health care resources involves the use of cost-effectiveness analysis (CEA) to rank treatments in terms of quality-adjusted life-years (QALYs) gained. CEA has been criticized for discriminating against people with disabilities by valuing their lives less than those of non-disabled people. Avoiding discrimination seems to lead to the 'QALY trap': we cannot value saving lives equally and still value raising quality of life. This paper reviews existing responses to the QALY trap and argues that all are problematic. Instead, we argue that adopting a moderate form of prioritarianism avoids the QALY trap and disability discrimination.

Fascination with the Coase Theorem arises over its apparently unassailable counterintuitive conclusion that the imposition of legal liability has no effect on which of two competing uses of land prevails, and also over the general difficulty in tying down an unqualified statement of the theorem. Instead of entering the debate over what exactly the theorem holds, this article suggests that the core of Coase's reasoning is flawed and to the extent that any version of the theorem relies upon this reasoning it can be disproved. The article commences by modelling the nature of the counter-intuitive thrust to the Coase Theorem, which is used to trace the development of Coase's reasoning, and ultimately to expose the flaw it contains. The heart of the article comprises the allegation of an error made by Coase when he transferred his core argument to the context of economic rents. Ancillary observations are made on the relationship between the Coasean analysis of characteristically legal problems and the conditions of general market equilibrium, and the theoretical status of Law-and-Economics.

In this article, I shall suggest an approach to the justification of normative moral principles which leads, I think, to utilitarianism. The approach is based on asking what moral norms we would each endorse if we had no prior moral commitments. I argue that we would endorse norms that lead to the satisfaction of all our nonmoral values or goals. The same approach leads to a view of utility as consisting of those goals that we would want satisfied. In the second half of the article, I examine the implication of this view for several issues about the nature of utility, such as the use of past and future goals. The argument for utilitarianism is not completed here. The rest of it requires a defense of expected-utility theory, of interpersonal comparison, and of equal consideration (see Baron, 1993; Broome, 1991).

Egalitarian theories of justice hold that equality should be promoted. Typically, perfect equality will not be achievable, and it will be necessary to determine which of various unequal distributions is the most equal. All plausible conceptions of equality hold that, where perfect equality does not obtain, (1) any benefit (no matter how small) to a worst-off person that leaves him/her still a worst-off person has priority (with respect to equality promotion) over any benefit (no matter how large) to a best-off person, and (2) any benefit to a worse-off person (even if not a worst-off person) has priority over a benefit of the same size to a better off person (even if not a best-off person). Beyond that there is much disagreement.

This essay argues in favor of retaining the positive/normative distinction in economics, in spite of developments in methodology and epistemology that have cast doubt on the possibility of a “value-free” economics. The central claim is that it is worthwhile to distinguish between positive economic analysis and normative judgments, even if economics is viewed as being permeated with ethical values. This argument is presented without trying either to demonstrate that there is (or is not) a profound epistemological difference between science and ethics or to show that positive science can (or cannot) afford us access to objective reality.