Dan Hausman, 5197 Helen C. White Hall Office Hours: Tues. 2:20-3:20; Thurs. 11-12
263-5178   dhausman@wisc.edu

Philosophy/Economics 524 Syllabus


   Economics is of philosophical interest in three different regards.  First, much of economics embodies a theory of rationality, and rationality is of great interest to philosophers both in itself and because of its role in theories of knowledge and ethics.  Second, although they sometimes deny it, most economists are committed to a distinctive theory of human well-being and to a related view of ethics; and ethics is, of course, a part of philosophy.  Third, the problems and practices of economics are of great interest to epistemologists and philosophers of science.  Any discipline that attempts to acquire knowledge of its subject matter is of some epistemological interest, but economics is special because it is a social science with many of the characteristics of a natural science.  It is of particular interest to those concerned about the possibilities of scientific studies of human beings.

   Although I personally am interested in all three of these areas of overlap between economics and philosophy, the focus this semester will be on the third area, that is on questions concerning the methodology of economics and the status and peculiarities of economics as a science.  Since the three issues are not fully separable, we will spend some time with questions concerning rationality and ethics, but the emphasis will be on questions in philosophy of science and philosophy of social science as these arise with respect to economics.

   Philosophy of science is itself a very complicated subject, and it is impossible to cover all the issues in philosophy of science that arise with respect to economics.  To narrow the range of issues and to narrow the philosophical literature, I shall focus this semester mainly (but not exclusively) on the works of Karl Popper and Imre Lakatos as these have been applied to economics. Since the works of Popper and Lakatos have had an especially strong influence on economists and economic methodologists, this emphasis makes sense.

Course Goals:

   1.  To provide an introduction (a) to parts of philosophy of science (especially to the works of Karl Popper and Imre Lakatos), (b) to parts of economics (particularly standard microeconomics and general equilibrium theory) and (c) to some philosophical work devoted specifically to economic methodology.

   2.  To provide an introduction to philosophical argument in general: This course should help you to appreciate how philosophy and economics bear on each other and how knowing philosophy can contribute to doing economics.

   3.  To help you to develop your analytical abilities and your ability to present and to criticize arguments both in discussion and, in particular, in writing: Every good essay, regardless of the subject matter, is an extended argument for some thesis or conclusion.  The only thing special about philosophy essays is the extent to which one focuses upon the logic of the argument.  This course should help you to write more sharply organized, focused and effective essays.

The extent to which these course goals can be achieved is largely up to you, but it is important that you appreciate what I am trying to accomplish.  If you cannot see how any particular lecture or reading assignment relates to the goals of the course, please be sure to ask about it.  In abstract matters it is especially important and especially difficult to be clear on what the point is.  Keep asking "So what?"  Since this course is more concerned with mastering skills than with acquiring information, it demands your active participation.

What this course does not aim to do:

This course does not aim to provide a detailed introduction to economics, to philosophy of science, to the theory of rationality, or to ethics--all of which are complex and intricate subject matters.  Although you should learn something about each of these, you should be aware that these subjects are much more complicated than it might appear from the introductory material we will consider.

Note: Students are encouraged to discuss problems concerning the teaching of this course with the instructor.  If students wish to pursue a complaint with someone else, they should contact James Anderson, Assistant to the Chairperson, Philosophy Department, 5185 H.C. White Hall, 263-5162.


Course Requirements:

      LECTURES  Attendance is expected, and contributions to discussion that are polite and useful will help to boost your semester grade, but there will be no formal penalty for non-attendance.

      QUIZZES These will be both graded and ungraded and are intended to provide food for thought as well as early warning concerning skills and issues that may be difficult for you.  Quiz grades will count for 10% of your semester grade.

      PAPERS The introductory papers should be approximately three double-spaced pages or 800 words in length.  They are initially due on Thursday, February 3, but the assignment will have more than one part. The other papers, which should be approximately 5 pages, or 1300 words, are due on Thursday March 10 and Tuesday, May 3. Papers that are less than one week late will be accepted but penalized by one-half grade.  If there is some good reason why you will not be able to hand in one of the papers on time, please talk with me to arrange for an extension.  Extensions will not normally be granted unless you talk with me before the due date.  The introductory paper assignment will count for 10% of your semester grade and is intended as a diagnostic and teaching exercise rather than as a way of assessing your accomplishments. In addition to writing the paper, the assignment will have two other parts, which will be due on Tuesday, February 8 and Thursday, February 10. The two main papers will each count for 20% of your grade.  Details concerning what I expect can be found below and on separate instruction pages to be distributed later in the semester.

      EXAMS There will be two midterm exams, Thursday, March 3 and Tuesday, April 12, that will count for 10% of your semester grade, and a final examination during the scheduled examination period that will count for 20% of your grade.

Course Outline:

Note: I do not expect students to do the optional readings, but I included in the xeroxed reader a few that I thought might be particularly useful or enjoyable.

Tuesday, January 18:  Introduction: discussion of the goals, structure and requirements of the course

Bruce Caldwell, "Economic Methodology: Rationale, Foundations, Prospects," in Uskali Mäki, Bo Gustafsson and Christian Knudsen, eds. Rationality, Institutions, and Economic Methodology. London: Routledge, 1993, pp. 45-60.

Thursday, January 20 : An introduction to economics and its methodological problems

PE (introduction) 1-4, 28-41
Hausman, The Inexact and Separate Science of Economics, ch. 1 "Rationality"

Frank Knight, "Economics and Human Action," PE 111-118.
Karl Marx, "Ideology and Method in Political Economy," PE 119-42

Tuesday, January 25: An introduction to economic methodology

Hands, RWR, ch. 1

Thursday, January 27: John Stuart Mill's view of the definition and method of economics

J.S. Mill "On the Definition and Method of Political Economy," PE 52-68.

Tuesday, February 1: The transformation of Mill's definition and the retention of his method in neoclassical economics.

J.S. Mill "On the Definition and Method of Political Economy," PE 52-68.
Lionel Robbins, "The Nature and Significance of Economic Science," PE 83-99.

Mark Blaug, The Methodology of Economics. Cambridge: Cambridge University Press, 1992, ch. 3.

Thursday, Feburary 3:  Mill's view and the positivist critique

Terence Hutchison, "On Verification in Economics," PE 158-67.
RWR, ch. 2.

Introductory Papers Due

Read Fritz Machlup, "On Indirect Verification," PE 168-179, in addition to the assigned reading by Terence Hutchison and study with special care the eight paragraphs beginning on p. 171 with the words "In his comments..." and ending on page 173 "applications of the theory." In this passage Machlup argues that some theoretical claims, such as "businessmen attempt to maximize profits" are neither definitional claims nor testable (and hence confirmable or disconfirmable). Your task is to write a brief paper (about 800 words) in which you restate clearly Machlup's view of such claims and decide whether his position makes sense. Though you should focus your attention on the passage from pp. 171-173, you may want to draw on comments that Machlup makes elsewhere in his essay or on comments that Hutchison makes.

Be sure to consult the general directions on paper writing near the end of this syllabus.

Tuesday, February 8: Positive versus normative economics.  Instrumentalism in economics.

Milton Friedman, "The Methodology of Positive Economics," PE 180-213.

Uskali Mäki, "Reorienting the Assumptions Issue," in R. Backhouse, ed. New Directions in Economic Methodology. London: Routledge, 1994, pp. 236-56.

Second part of introductory paper assignment due

Thursday, February 10: The peculiarities of Friedman's methodological views

Milton Friedman, "The Methodology of Positive Economics," PE 180-213.
Herbert Simon, "Testability and Approximation," PE 214-17.
Dan Hausman, "Why Look under the Hood?" PE 217-21.

J. Daniel Hammond, "An Interview with Milton Friedman on Methodology," in Bruce Caldwell, ed. The Philosophy and Methodology of Economics. Aldershot: Edward Elgar, 1993, pp. 216-38.
Dennis Mueller, "The Corporation and the Economist," PE 289-314.

Third part of introductory paper assignment due

Tuesday, February 15: Karl Popper's philosophy of science and the problem of demarcation

Karl Popper, "Conjectures and Refutations" (xerox)

Thursday, February 17:  Popper, Hume and the problem of induction

Karl Popper, "Conjectures and Refutations" (xerox)
David Hume, An Inquiry Concerning Human Understanding (excerpts xeroxed)

D. Wade Hands, "Karl Popper and Economic Methodology: A New Look," Economics and Philosophy 1 (1985): 83-99.
Bruce Caldwell, "Clarifying Popper," Journal of Economic Literature 29 (1991): 1-33.

Tuesday, February 22: Lakatos and sophisticated methodological falsificationism

Imre Lakatos, "Falsification and the Methodology of Scientific Research Programmes," (xerox) 91-122.

D. Wade Hands, "Popper and Lakatos on Economic Methodology," in Uskali Mäki, Bo Gustafsson and Christian Knudsen, eds. Rationality, Institutions, and Economic Methodology. London: Routledge, 1993, pp. 61-75.

Thursday, February 24: How do (or should) scientists behave?

Thomas Kuhn, The Structure of Scientific Revolutions (excerpts xeroxed)

Tuesday, March 1: The methodology of scientific research programmes

Imre Lakatos, "Falsification and the Methodology of Scientific Research Programmes," (xerox) 122-137, 154-59, 184-89.

Thursday, March 3: Midterm examination #1

Tuesday, March 8: The "Received View" in Philosophy of Science and its Breakdown

RWR, ch. 3

Thursday, March 10: The sociological "turn"

RWR, ch. 5.

Dan Hausman, "Kuhn, Lakatos, and the Character of Economics," in R. Backhouse, ed. New Directions in Economic Methodology. London: Routledge, 1994, pp.195-215.

**Paper Due**

Tuesday, March 15: Contemporary Economic Methodology I: The Popperian tradition

RWR, ch. 7, section 7.1 only.
Mark Blaug, "Paradigms vs. Research Programmes in the History of Economics," PE 348-75.

D. Wade Hands, "Second Thoughts on Lakatos," History of Political Economy 17 (1985): 1-16.
E. Roy Weintraub, "Appraising General Equilibrium Analysis," Economics and Philosophy 1 (1985): 23-37.

Thursday, March 17: Conclusions on Popper and Lakatos

Mark Blaug, "Paradigms vs. Research Programmes in the History of Economics," PE 348-75.
Mark Blaug, "Why I Am not a Constructivist: Confessions of an Unrepentant Popperian," (xerox)

Tuesday, March 29: Return to Mill

RWR, sec. 7.2
Hausman, "The inexact deductive method," from The Inexact and Separate Science of Economics  

Thursday, March 31: Realism in economic methodology

RWR, sec. 7.3
Hausman, "Problems with Realism in Economics" (xerox)

Tuesday, April 5: More on realism in economic methodology

Uskali Mäki, "Reclaiming Relevant Realism," (xerox)
Tony Lawson, "What Has Realism Got to Do With It?" (xerox)
Dan Hausman, "Realist Philosophy and Methodology of Economics: What Is it?" and "Ontology and Methodology in Economics" (xeroxes)

Thursday, April 7: Alternative views: economics as political philosophy and applied mathematics

Alexander Rosenberg, Alexander Rosenberg, "If Economics Isn't Science, What Is It?" PE 376-94.

Tuesday, April 12: Midterm #2

Thursday, April 14: Alternative views: the rhetoric of economics

Deirdre McCloskey, "The Rhetoric of Economics," PE 395-445.

Tuesday, April 19: Should methodology be replaced with rhetoric?

Deirdre McCloskey, "The Rhetoric of Economics," PE 395-445.
RWR, Section 6.2

RWR, Section 6.1
Stanley Fish, "Comments from Outside Economics," in Arjo Klamer, Donald McCloskey, and Robert Solow, eds. The Consequences of Economic Rhetoric. Cambridge: Cambridge University Press, 1989, pp. 21-30.

Thursday, April 21: Is methodology passé, sexist or silly?

RWR, Sections 6.2, 6.3
E. Roy Weintraub, "Methodology Doesn't Matter, But the History of Thought Might" (xerox)

Optional: Uskali Mäki, "Social Conditioning of Economics," in Neil deMarchi, ed. Post-Popperian Methodology of Economics: Recovering Practice. Dordrecht: Kluwer, 1992, pp. 65-104.

Tuesday, April 26: Rationality, ethics, and normative economics

Dan Hausman and Michael McPherson, Economic Analysis and Moral Philosophy, second edition, Chapter 1 (xerox)
Hausman and McPherson, "Economics, Rationality and Ethics," PE 252-59.

Thursday, April 28: Can economics be value neutral?

Hausman and McPherson, Economic Analysis and Moral Philosophy, second edition, chapter 3 (xerox)
Philippe Mongin, "Value Judgments and Value Neutrality in Economics," (xerox)

Tuesday, May 3: The philosophical presuppositions of normative economics

Hausman and McPherson, Economic Analysis and Moral Philosophy, second edition, chapter 2 (xerox)
Hausman and McPherson, "Economics, Rationality and Ethics," PE 259-77.

Joseph Schumpeter, "Science and Ideology," PE 224-38.
Robert Solow, "Science and Ideology in Economics," PE 239-51.

**Paper Due**

Thursday, May 5: Conclusions

RWR, chapter 9

David Collander, "The Art of Economics by the Numbers," in R. Backhouse, ed. New Directions in Economic Methodology. London: Routledge, 1994, pp. 35-49.

Office Hours:

If my office hours, (Tuesdays 2:20-3:20 and Thursdays 11-12) are not convenient, see me after class to arrange another time to meet.  My job is to help you to master the skills and material with which this course is concerned, so feel free to come see me.

A Note on Plagarism:

Plagiarism is a serious offense. All sources and assistance used in preparing your papers must be precisely and explicitly acknowledged. If you have any questions about what constitutes plagiarism, please come talk with me. Ignorance of what constitutes plagiarism is not a defense. It is your responsibility to be sure. The web creates special risks. Cutting and pasting even a few words from a web page or paraphrasing material without a reference constitutes plagiarism. If you are not sure how to refer to something you find on the internet, you can always give the web address (the URL).  It is generally better to quote than to paraphrase from material on the web, because in the absence of page numbers it can be hard to find passages that are paraphrased rather than quoted.

Paper Assignments:

The first of the three papers is shorter and counts for less to give you a chance to get some experience writing philosophy papers without too much risk to your semester grade.  Paper topics will be distributed.  Remember that these are topics--that is, issues to think about--not recipes.  You have to decide what it is that you want to maintain in your essays.  In writing the papers please keep in mind the following requirements and suggestions:

   1.  The papers should be roughly five double-spaced pages long  (3 pages in the case of the introductory paper) and are due promptly at the beginning of class on the dates specified in the course outline above.  If there are special reasons why you cannot submit an essay on time, please speak with me before the due date.

   2.  Do not regard the paper topics as essay examination questions, all of whose parts must be addressed.  Although your papers must be on the assigned topics, the point is to write a well-organized and unified argument for some clearly enunciated conclusion.

   3.  You are expected to give references when you cite detailed claims or arguments made in the readings, and your papers should, where appropriate, show familiarity with relevant materials from the lectures or reading for the course.  But you are expected to write essays, not examinations.  So don't bother to demonstrate that you have done the course readings.  Cite them only when they are relevant.  Be sure that your paper is a well organized argument for some clearly articulated thesis.

   4.  All papers must be typed or printed double-spaced with wide margins (at least one inch) on all sides, so that there is plenty of room for marginal comments.  Be sure to keep copies of your papers.  Please do not use binders.

   5.  Papers for the course must be essentially correct in their "mechanical" aspects-- spelling, punctuation, grammar, typing, and so forth.  Papers with more than 3 or 4 errors per page will be marked down, and if they are very messy, they will not only be penalized, but they will also be returned for correction before being graded.  Obviously spelling and typing are of no intrinsic importance, but messy papers are hard to assess; and it is not unfair to expect you to take responsibility for making sure that your papers are correct in these minor aspects.  If you have difficulty with the mechanical features of paper writing, please get someone to proofread your paper before you hand it in.

   6.  The paper topics are not recipes for writing the papers.  They suggest issues to consider and questions to ponder.  But the task of deciding what you want to argue remains.  The task of writing a good essay is virtually identical with the task of thinking out a clear thesis or conclusion that you want to defend and then elaborating and defending it.  You should be able to say clearly and precisely not only what your paper is about, but also what your paper maintains.  Be sure each of your papers has both a thesis--that it asserts something definite--and a logical organization.  Once it is clear what you what to show, you will have a criterion to decide what is relevant and the basis for organizing your paper.  Can you put your main point clearly in a sentence?  Can you say clearly in a sentence what your paper shows or proves?  Are all the parts of your paper relevant to your main point?  Is the structure of your argument clear?  No good essay merely summarizes things you have read and then offers your remarks or points of comparison or differences you noticed.  Every acceptable essay integrates its remarks into an argument of its own.  Exposition of the views of others should always be part of your argument for your thesis.

   7.  Note that a well-organized paper is not merely orderly.  For example, a paper that argues that Popper argues claims 1, 2, and 3 and that one can defend claim 1 as follows, claim 2 as follows, but not claim 3 is orderly, and it has a thesis.  But it would only be well-organized--truly one paper rather than three--if the discussions of the three claims bore some relations to one another and if the paper added up to some unified and substantive statement.

   8.  When you quote, paraphrase, or make use of a point made by others, be sure to document the source.  I am not particular about what style you use.  All that matters is that your references be precise and usable.  If you say that Popper says that induction is central to science, it should be clear on what page Popper supposedly says that. The easiest way to give a reference is simply to put the source and page number in parenthesis.  Papers without clear references (where needed) will be marked down.

   9.  As you are working on your essays, please feel free to come to me for help.  You do not need to do any further research beyond the materials suggested, but you can consult with me if you want references for further reading.

   10.  Try to say exactly what you mean.  Pay careful attention to your language.  Sentences such as "Newton is a great theory" are common on student essays, but they are unacceptably careless -- people are not theories.

   11.  In a political debate, the point is to win, and one consequently tries to make the arguments of one's opponents sound as ridiculous and worthless as possible.  In a philosophical debate (or in writing a philosophy essay), in contrast, the objective is to learn the truth.  So you should try to make the arguments conflicting with your views as compelling as possible, before you answer them.  For if there are any objections to what you are maintaining that you cannot answer, then you cannot be sure that you are right.  Work hard at trying to see "the other side".

   12.  Although many historical, economic, sociological, and scientific facts are relevant to the issues you are addressing in your essays, be careful to keep your focus philosophical.  If you aren't sure whether your papers are philosophical or not, check with me.

   13.  To help in organizing your thinking and writing, when you complete your rough drafts of the papers, you should attempt to answer the following three questions:

  1. What is your thesis--that is, what is it that you are trying to maintain or show or prove?  What is your main argument for your thesis?
  2. What is the most important objection to or criticism of your thesis that you need to consider?  Formulate that objection or criticism as an argument.
  3. What is your argument in response to the objection or criticism mentioned in answer to question 2?

If you cannot answer these questions clearly and easily, then there are serious problems with your paper.  Do not regard your papers as finished or acceptable until each clearly implies answers to the above questions.  (But an essay is not, of course, a list of answers to any set of questions.)  You need not turn in your answers to the questions, but you should have them available in case I want to see them.  Taking the task of answering these questions seriously can make a big difference in the quality of your paper.

Paper grading criteria

An "A" paper typically has all of the following virtues, although in exceptional cases papers with only five of the six virtues might merit an "A"

  1. It has a well-defined thesis and a logical organization.
  2. It shows good sense, intellectual honesty and struggle.  It attempts to defend a defensible thesis and takes seriously objections to that thesis.
  3. It is well-informed.  If there are passages in the assigned readings for the course that are particularly relevant to the matters under discussion in the essay, these are cited and discussed.  The paper shows an awareness of conceptual distinctions and clarifications developed in the course.
  4. It is intelligent, logical, and careful.  The argument is carefully articulated and developed. Obvious difficulties are anticipated and answered, and gaps are closed.
  5. It is significant.  The issues discussed, although typically matters of detail, are of some importance, and their importance is made clear within the essay.
  6. The paper is written in a lucid and grammatical style.

A "B" paper has the following virtues:

  1. As before.
  2. As before.
  3. As before.
  4. It is logical and not careless.  The argument is well articulated.
  5. It is not trivial.  The essay provides some motivation for its topic.
  6. The paper is grammatical.

A "C" paper has at least the following virtues:

  1. It is orderly and has some focus.
  2. It shows some serious concern with the issues it deals with.
  3. It is not uninformed.  Where relevant, it shows awareness of the content of the course.
  4. There are some definite and cogent arguments in the essay.
  5. The paper has some point.
  6. The paper is readable and minimally grammatical.

A "D" paper

  1. Has some intelligible organization.
  2. Shows some concern with the issues it deals with.
  3. Shows minimal awareness of the content of the course.
  4. Makes some relevant and sensible argument
  5. Has some point.
  6. Is comprehensible.