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I know only about a few liberal economists who directly adhered to philosophical materialism, while not all were vocal about it (Locke, Adam Smith, Voltaire, David Friedman*). I am not completely sure for Alain, and Raymond Boudon. Mises defended a methodological dualism (cf. Theory and history, 1957).

Two issues are related to whether liberal economy theory tends to be materialist or not: objective vs. subjective value, and utilitarianism vs. jusnaturalism.

  • The objective vs. subjective value theory debate.

As explained in a comment of another question, "Adam Smith defined a labor theory of value attributing a property directly to the material, the more modern approach is to reject the property of the material and instead attribute a subjective utility that depends on the individual or where a trade could increase value despite nothing material happening." (haxor789). This is the objective vs. subjective value theory debate.

  • The utilitarianism vs. jusnaturalism debate

As far as I know, Mandeville (a precursor of liberal economy, according to Hayek), Bright, Cobden, Ricardo, Mill, Dunoyer, Say, Bastiat and Mises are considered utilitarians; Milton and David Friedman** are considered direct utilitarians; Hayek, Hume, Smith, Ferguson are considered indirect utilitarians.

Utilitarianism is composed of hedonism (Wikipedia: Hedonism refers to a family of theories, all of which have in common that pleasure plays a central role in them), which itself has to see with epicurianism, a materialist philosophy.

  • Materialism and the two debates

I define materialism as the belief that gives prevalence to the physical, as opposed to the ideas or the spirits.

Overall, I would consider the utilitarian economists cited above as materialists, for the theoretical link utilitarianism has with materialism on the one hand, and for the importance it gives to the material consequences on the other.

In contrast, I would consider Rothbard and Pascal Salin, and other Austrian economists, for whom liberal economics is good for it simply being moral and fair, as not materialists, and maybe as idealists. This is the utilitarianism vs. jusnaturalism debate.

  • Liberal economy against materialism

As of today, I feel materialism is frowned upon in liberal economy theory circles; a situation that may have to see in part with liberal economy theory being gradually adopted by (religious) conservatives (jusnaturalism over utilitarianism because of its historical link with Christianity); and also the existence of what I would call a "hippie trend" which exists in the libertarian movement, as represented by Nick Gillespie the editor-in-chief of Reason magazine (see one of their last reporting "Welcome to the psychedelic renaissance" for an illustration) (jusnaturalism over utilitarianism so that one should not think too much critically about the beliefs and practices of people, especially irrational ones, especially their own hippie beliefs).

I don't think that liberal economy theory adopting the subjective value theory (Austrian economics) makes it non-materialist.

  • Question

Nonetheless, it seems to me that liberal economy theory is materialist in theory, but also historically (as shown in the question).

Is liberal economics theory materialist?

*A kind of common-sense materialism, I suppose. "It is that our knowledge of moral facts comes in the same way as our knowledge of physical facts and so has the same epistemological status—a reasonable, although not in either case certain, basis for belief." (Chapter 61, The machinary of freedom, 3rd edition, David Friedman, 2014)

**"As a moral philosopher I am a libertarian, insofar as I am anything. As an economist I am a utilitarian. One could describe most of this book as a utilitarian approach to libertarianism, but only by using “utilitarian” in a very general sense. My approach would be more accurately described as consequentialist." (Chapter 43, The machinary of freedom, 3rd edition, David Friedman, 2014).

See also here for a synthesis of D. Friedman's arguments in favor of utilitarianism (in French).

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    "I define materialism as the belief that gives prevalence to the physical, as opposed to the ideas or the spirits" - Prevalence? Preference? Materialism in philosophy doesn't just say the material/physical is common or preferential. It says the physical is all there is. You can give preference to the physical regardless of whether you believe there's anything beyond that, and all economics would be materialist if it doesn't appeal to e.g. deities. Of course no-one can stop you from defining materialism differently, but it's not particularly constructive to use an obscure definition of a term.
    – NotThatGuy
    Commented Sep 20, 2023 at 13:59
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    Economics, like all sciences, uses methodological naturalism, meaning that it only deals with things of nature. That isn't really the same thing as being materialistic since one can be an ontological naturalist without thinking that everything is material. Commented Sep 20, 2023 at 14:16
  • Hasty generalization: Adam Smith "was "in some sense" a Christian." If you assert that "A-ism implies B-ism" what you are saying is (more formally) that "For every x, if x is A, then x is B" which is simply refuted by a single case of an A that is not-B. Commented Sep 20, 2023 at 14:19
  • "... for whom liberal economics is good for it simply being moral and fair" - umm... the primary justification behind moving away from that is because it isn't moral and fair. In any case, the issue with calling this non-materialist is that, not only all economics, but almost everything would then be non-materialist, because you seem to be saying that having any sort of goal makes something non-materialist.
    – NotThatGuy
    Commented Sep 20, 2023 at 14:24
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    @Starckman I'll adres this in an answer.
    – Jumboman
    Commented Sep 21, 2023 at 12:51

3 Answers 3

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I'll put my comments to your other Q as kind of an answer here:

Is liberal economics materialist?

In a broad sense [of the latter] it is.

However, a big division in the philosophy of economics is whether utility is interpersonal, i.e. can be added/compared across persons or not. The former is sometimes subsumed to utilitarianism.

I think materialism [as defined in Wikipedia, could find no SEP page for it] is too vague to say whether utilitarianism is a consequence of it or not. In fact, even if "the mind is what the brain does", it doesn't immediately entail to me that all brains would value stuff the same, so I'd say utilitarianism isn't an immediate consequence of materialism, broadly defined.

As for why many modern economists are not "vocal proponents of materialism", there's not much reason to promote a vague and broad term, to advance one's academic career, for instance. Especially given that materialism as a term was over-promoted by Marxists, and many modern economists are not outright Marxists. (If you doubt the first part of this para, just look at this paper, which I found in a few minutes on Google; it says for instance that "From Marx to Althusser, the materialist approach has tended to assume that individuals (that is, workers, proletarians and other social actors) unconsciously reproduce the social structures of capitalism that alienate them." So there's a near-identification of Marxism with materialism in some corners.)

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  • Interesting answer (especially the last paragraph), thx :)
    – Starckman
    Commented Sep 20, 2023 at 13:33
  • I managed to find the SEP for it in the meantime. They call it Physicalism instead plato.stanford.edu/entries/physicalism The latter is actually a newer term. One (but not the only) of the reasons for its introduction was the nature of gravity, apparently. There's also this useful page of things associated with physicalism/materialism plato.stanford.edu/entries/physicalism/associated.html Commented Sep 20, 2023 at 14:01
  • Alas the latter doesn't get to anything in economics. Commented Sep 20, 2023 at 14:07
  • Another thing, from my observation, is that they vigorously want to distance themselves from the "consumerism" to which liberal economy is attached to by its adversaries. So they reject philosophical materialism all together. But I think it is wrong, just by showing that liberal economy theory is grounded on thorough philosophical considerations you already prove that it has nothing to do with consumerism. Anyway
    – Starckman
    Commented Sep 21, 2023 at 6:03
  • But in general, those who reject materialism in liberal economy theory are also the same who reject rationalism (in the large sense of the term, aka secular philosophy, logic, etc.) And that for the same reason: (religious) conservatism
    – Starckman
    Commented Sep 21, 2023 at 6:06
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After having read a bit about materialism, realism and idealism, monism, dualism, ontology and epistemology. I'd say reducing materialism to the rejection of supernaturalism is a little simplistic and keeps the door open for a lot of things to be or not be materialist.

Like there is apparently solipsism which argues that there is just the mind and nothing else, which would be monist idealism. Then there is the idea that there is an outside world that exists even if we don't think about it, which would be ontological realism. Then you could also have epistemic realism if the outside world doesn't just exist, but is also actually perceivable so that we can learn about it. And if you think an outside world and a mind both exist that would be ontological dualism. Which is compatible with some forms of realism, but not with materialism which is explicitly monist and rejects the existence of a mind as a different thing. And that mind-world of idealism could still be ontological in that you assume that mind related stuff exists thoughts, ideas, concepts, consciousness and so on and it can be epistemic in that you can think that the mind objects are different from the material objects, so stuff like this color problem where you can perceive the color red by means of the light of a specific wavelength, but where redness is not actually a property of the wavelength but an interpretation of a physical property by the mind.

So you might extend materialism to think of the mind as a set of material properties that are somewhat encapsulated into an material entity. Or you could take your own position and see the material reality as something that you're filtering and making sense of through the mind. And probably a whole host of other perspectives that you can take. In other words these things can be mutually exclusive or compatible with each other depending on what perspective you focus on.

So to accept the existence of an external world and the rejection of an external supernatural does surprisingly little to narrow down these different perspectives.

Also idk you could interpret materialism as referring to the atomic model of reality where everything is just atoms interacting with each other (not referring to what we call atoms, but whatever the actual fundamental building blocks of everything end up being). And then refer to the individual as the atom of society as a hallmark of liberal thinking in general and of liberal economics in particular.

Though while maybe the atom of society, the individual is hardly the atom of the materialist world and the focus on the individual could thus be very idealist.

Like if value is expressed as utility which is subjective to the individual and not inherent in the material object, then technically value is a mental object that is immaterial, non-mind independent. Or does the material object interacts with the individual to perform material processes that create that state of mind?

In that case you'd have another battleground not mentioned in the question and that is the "liberal" part, which assumes the individual to be a free and independent agent, but this kind of materialism would likely reduce the individual to an inanimate object that doesn't act but is only acted upon.

Also even if the object changes the state of mind (utility) of the individual, then the object itself must still possess some kind of valuable (relevant) properties. So to focus not on that but only on how it manipulates the mental object is pretty idealist rather than material.

The other problem is that price is treated as both an individual as well as an objective property. However while a single individual is able to compute a price based on utility and comparison between utility of other things, it does not have an objective character based on this utility alone.

There are also various other theories of value that often think price as a combination of several values rather than just one. https://en.wikipedia.org/wiki/Theory_of_value_(economics)

For example, you could measure the cost of producing or reproducing it, with special emphasize on the labor invested in it, which again has a cost of living in order to provide that labor. On top of the intrinsic value of cost and labor you also have a portion added due to supply and demand of a larger society idk a fungible consumable is likely to be able to be sold to many customers allowing for an average price.

But on top of that you also have personal utility and the power theory of value. Like no matter how cheap or expensive a goal is due to average supply and demand, your personal supply and demand or that of the vendor could be vastly different. Also ultimately the price is completely arbitrary as it ends up what the vendor can charge before the buyer is charging at them for being an asshole or what the seller is willing to accept before calling the police over threats and abuse of power. Or idk selling under production cost or selling below the cost of living for ones labor is not rational but if your coerced or in dire need that is what leads to the price rather than it's intrinsic value, though the buyer might still profit from that intrinsic value that they can get uncoerced.

So while value could maybe be calculable, "price" as in what's on the tag is something that can only be calculated in edge cases where one of the previous things becomes relevant.

And price in terms of money, is even worse as the value of money is hard to predict and depends on what people are willing to give you for that. So it's less of a stable value and more of a hope or expectation. Like you go to the market see bananas at $1 sell stuff for $1 and go to the market and find that bananas are now either sold out or $2 then selling the stuff for $1 was selling it below value despite it being at value at the time.

So different people operate with different ideas of a price and to argue that the market reflects all of these ideas and doesn't just allow for manipulation of prices by means of supply and demand or by using power to change prices, is pretty wishful thinking often not rooted in reality (apart from certain edge cases).

And about the conception of rights, it's not just about utilitarianism. Like materialistically the laws of nature would be the laws of physics that can not be broken because they CAN not be broken (if they can then they weren't laws). But liberal economics often has a more ideological motivation of law. You could argue that something like democracy and having people figure out laws for themselves is pretty materialist as different atoms of society create something by interaction, while a right to property is often just assumed dogmatically as an axiom which might be justified by idk Locke but just as a rationalization not as a necessity of the natural.

So there are probably some points where you could argue that it's more idealist, but as that the specifics depends on how broad or fine you take materialism to be.

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  • +1 for your answer. "I'd say reducing materialism to the rejection of supernaturalism" well, I defined as "the belief that gives prevalence to the physical, as opposed to the ideas or the spirits."
    – Starckman
    Commented Sep 30, 2023 at 10:12
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I don't think that liberal economy theory adopting the subjective value theory (Austrian economics) makes it non-materialist.

Modern economist have a many tricks to convince us that inequality under capitalism really isn't all that bad. One particularly useful argument involves adopting the subjective value theory while simultaneously conflating the concepts 'money', 'wealth' and 'utility', using them at will as if they were the same. They do this in order to 'prove' that the economy is not a zero-sum game.

Here is what they would have you believe: if you have 10 bananas and trade 5 of them with a person who has 10 coconuts, not only are you both happier; since you both possess items that have more value to you personally, you both get richer! The 'economy' increases in value!

Obviously this comes with a whole range of questions and implications. When you wake up hungry, you probably value food more than when you just ate, so the food in your kitchen increases in value, and the hungier you get, the richer you become. Then you eat, and it loses value again. Also, we tend to tax something called 'added value'. If you and the coconut-trader both increased your wealth, how do we quantify these new-found riches so that we may properly tax you?

A materialist (Smith, Marx) looks at all this and thinks: What are you talking about? There were 10 bananas and 10 coconots yesterday, and there are still 10 of each today. It doesn't matter how much you enjoy a taste, or how hungry you are. These are not material concepts. You are of course free to have an opinion on all of this, but to call any of this materialistic (as discussed in the comments) simply because hunger is a concept rooted in biology, or because you were raised under circumstances where bananas taste bitter, seems to stretch the definition of materialism pretty thin.

This is why the term 'neoliberalism' has a certain value, and why it's confusing to refer to both Smith and Friedman as simply 'liberals'. In terms of their philosophical outlook, Smith is closer to Marx than to the Austrian economists. Locke wrote a proviso under which private ownership was justified, but also admitted that once you accept a subjective-value currency (i.e. drop materialism), his proviso falls apart. So, in order to justify ownership of massive amounts of land, economists dropped materialism.

In short, there is a clear line to be drawn between materialist economists and idealists, and it divides classical liberals and marxists on one side, and neoliberals/libertarians/austrians on the other side.

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  • adding this as a comment because it's a more emotional argument, but I really don't see how anyone could hear economists talking about quantative easing, investor confidence, consumer trust, synthetic CDO's, paintings and soccer players worth 300 million, cryptocurrency, NFT's, bubbles and crises, and think: "ah yes, good old fashioned materialism, perfectly rooted in rational reality and objective facts"
    – Jumboman
    Commented Sep 21, 2023 at 14:36
  • @Starckman I'm not sure you are looking at this with an open mind. You seem to be asking for confirmation that you, as a liberal, are also a materialist. This question cannot be answered by empty statements about 'resentment' (no one mentioned that) or by listing any positive effects of capitalism. You are free to like capitalism; that is not the discussion. The answer to your question, as I pointed out, depends on whether you're a Smith-style capitalist or an austrian-style capitalist, because the former is materialist and the latter isn't.
    – Jumboman
    Commented Sep 22, 2023 at 11:15
  • @Starckman It is not a matter of beliefs. The literal definition of idealism is that reality is in the minds of people. Fiat currency - pieces of worthless paper that get their value solely because of social agreements and trust - only has value in the minds of people; it cannot be eaten, worn or lived in. Hence, fiat currency are squarely within the realm of idealism. This is what I alluded to in my first comment. Dragging 'individualism' into this only muddies the conversation.
    – Jumboman
    Commented Sep 22, 2023 at 12:20
  • Let us continue this discussion in chat.
    – Starckman
    Commented Sep 22, 2023 at 12:39
  • @Starckman If you cannot argue in good faith, I don't see any point in continuing the discussion. If you want to argue that minds are physical, and so by extension, that idealism and materialism are the same epistomological framework, rather than diametrically opposed (and in doing so, erase the vast literature on the subjects) then be my guest; but you will have to do it alone, because I'm not interested in playing your games.
    – Jumboman
    Commented Sep 22, 2023 at 12:40

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