Philosopher Economists

Two subjects that will forever be related whether in books, concept, or even college majors (PPE, PE, etc.)  But what do they have in common or, more specifically, how does philosophy have economic qualities?

Currently we are studying Game Theory, but this can be narrowed down in many cases to rational choice, so let's focus on that.  I'm sure many of you can immediately connect this to what philosophers have studied for ages, but lets dive into it anyway.

Rational choice is comprised primarily of rationality (duh), preference, risk, and uncertainty.  Preference is key because without it there is no goal for which rationality can guide us to.  So first we must locate our preference which can be highly subjective and has been debated in philosophy centuries.  One of the first that addressed varying preferences was pre-Socratic philosopher Protagoras, a famous sophist.  Sophists were disliked because they would teach anyone the art of argument, even if that person was a criminal.  Often times, this resulted in the "wrong" person winning a case, but Protagoras offered that then maybe they weren't "wrong."  He instead claimed that "right" and "wrong" depended on the cultural factors and experiences an individual was raised with.  This idea is pretty common now and Protagoras was the first of what we call a relativist.  Philosophy is the primary school of thought that debates this preference and this relative idea of right and wrong, sometimes a category of ethics.  Once we have decided what is right or wrong, the next step is debating the risk and uncertainty. 

Uncertainty is the enemy of rationality.  It is incredibly difficult to stay rational and logical when nearly all subject matter appears far from being some mathematical equation that is easy to predict.  Philosophy has been in the business of predicting and describing the seemingly irrational for years.  Thales, "the first philosopher", was well known for his theory that the entire world stemmed from water.  Since he outlined this fundamental "truth" he could derive rational theories from it.  Since A must be, then B must be, then C must be, then D or E must be, etc.  Basically, by thinking logically, we can create a branching system of possibilities that incorporate for more potential rationalities.  Obviously Thales wasn't necessarily correct in his theory, but he did set up a framework that is now followed by philosophers and, as I am claiming, economists.

We now have a massive branch of possibilities and it is time to create a list of probabilities for each one and eventually take a risk on some of them.  Philosophers find out which is the most probably and hold this as a possible truth.  This is risk, but when combined with uncertainty and preference we can get a glimpse into a more rational decision.

All sorts of philosophical ideas are intertwined with economics and, while I only highlighted a brief fundamental history of where the two coincide, I believe that all economists have a little bit of philosopher in them.
Image result for thales


https://en.wikipedia.org/wiki/Philosophy_and_economics
http://www.philosophicaleconomics.com
https://blog.oup.com/2013/11/five-most-influential-economic-philosophers/

Comments

  1. AnonymousApril 19, 2019 at 3:58 PM

    I really loved this post!! I'm a firm believer of the fact that right and wrong aren't definable by society and are subjective to each individual and their moral code. In terms of economics, I just wrote a blog post about behavioral economics, which is essentially the psychology behind economics and relates a lot to the idea of rationality in the human mind. Richard Thaler, the Nobel prize winning economist, had many criticisms of the rational economic model for many reasons, one of them being, as you mentioned above, that the term "rational" is very loosely defined. Because of this, it doesn't provide a very disciplined structure as many economists intended nor does a majority of the population fit into the rational economic model. The question of rationality has been argued since the beginning of time, but despite that humans are not rational beings. Therefore, economic models should factor in human psychology and the underlying irrationality of the human race.

    https://www.nber.org/papers/w4777.pdf

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