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The Modal View and Defending Microeconomics

Published online by Cambridge University Press:  31 January 2023

Steven Rappaport
Steven Rappaport*
Affiliation:
De Anza College
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Extract

What Daniel Hausman has called “the simple criticism of economic theory”1 is succinctly conveyed by the following passage: “We know full well not only that commodities are not infinitely divisible (which is only intended as a simplification), but businessmen do not always attempt to maximize profits and that the preferences of consumers are not always transitive. ‘Businessmen maximize profits’ and ‘a consumer’s preferences are transitive’ are fundamental economic ‘laws’. How can economists rationally accept a theory which is so full of falsehoods?” (1981a, p. 382). In a recent paper Hausman considers several defenses of neoclassical microeconomics against the simple criticism. One of them is the modal view which Hausman initially characterizes in the, following admittedly vague and ambiguous manner: “Microeconomic general statements are modal (counter-factual) claims.

Type
Part V. Social Science
Information
PSA: Proceedings of the Biennial Meeting of the Philosophy of Science Association , Volume 1986 , Issue 1: Volume One: Contributed Papers 1986 , 1986 , pp. 289 - 297
Copyright
Copyright © Philosophy of Science Association 1986

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