I understand that there is a philosophy behind pretty much every science, like philosophy of physics and philosophy of biology. So, what about the philosophy of economics? Is there such a thing, and if so, can I see some texts on the philosophy of economics?


3 Answers 3


Start with Why Economists Love Robinson Crusoe:


The full article is not available but here is the teaser:

The character’s strangest adventure, however, is none of these. It is surely his centuries-long ramble through the literature of economics. Crusoe has appeared in Karl Marx’s “Das Kapital”, John Maynard Keynes’s “General Theory” and Milton Friedman’s Chicago lectures on “Price Theory”. He has an entry in the New Palgrave Dictionary of Economics. And he often washes up in economics textbooks.

I cannot find a scholarly reference that describes how the distinct famous economists describe the Robinson Crusoe economy. I would start there with further keyword search to get to the core of economic philosophy.

My informal thoughts based on recollection of reading many economic theories. - Robinson Crusoe lives alone on a remote island. He can labor to produce goods using raw materials from the land. To subsist, without increasing his wealth, Crusoe must labor to obtain the food, water, and shelter that he needs to survive. Shelter at first might be crude because Crusoe must get food, water, and perhaps make fire, and must produce a surplus of these consumption goods, before he can invest his labor to produce other goods that economists call investment goods. Karl Marx, as I recall from second hand authors, focuses on the subsistence economy where the people can provision and reproduce themselves, and can repair the wealth at the rate that it wears out, and cannot grow the wealth because there is no surplus. If there is a surplus of consumption goods then it can be distributed to provision the investment goods workers such that a portion of the workforce can spend their time making investment goods. Crusoe is the workforce so he must divide his labor whereas society can divide the labor via political interactions.

Scarcity, production, and the concept of the consumer goods or economic suprlus, is the key to understanding all political-economic reasoning in my judgment. I think Marx and a few other economists make this the focus of their analysis of the political-economic systems. Austrian economists are libertarians and their focus in both on the surplus and on the political institutions that they think will maximize liberty of individuals in society.

Investment goods would be a sturdy shelter that allows Crusoe to consume its services for long periods of time, and tools that make it easier to produce consumption goods, such as for picking fruit or carrying water or diverting the flow of water, etc. So Crusoe must devote his labor to the production of either consumption goods or investment goods according to his needs and desires and to do so he must first produce a surplus of consumptions goods. This is the fable or story of one man making economic decisions when faced with scarcity, raw materials, and the capacity for labor and economic investment. Introduce another person onto the island and the model for the one-man economy is the same except for the politics of how to cooperate or compete over the resources, and how to decide how to create the consumption goods surplus, and how to distribute the surplus among the workers or land owners or private propery owners, etc.

Socialism is the idea that the people own all the land and capital in common so no private property owners can exclude the people from participating in the production and distribution of goods. But then there must be a political system to divide the labor between production of investment and consumption goods so socialist politics becomes the problem or the solution depending on the perspective of the speculating political philosopher.

Controversies in economic theory arise in part over the role of government (social institutions) include finance or financial relations. The way I try to simplify these controversies is to imagine society as a unit that I call The Company Town. In this model everyone who works outside the household sector for wages is paid by The Company Town. So TCT pays the wage bill in society. Somehow The Company Town decides how to provide public and private goods including the mix of investment goods and consumption goods. Households pay taxes to The Company Town and buy all their goods from The Company Town either paying back their wages, reducing their savings, or by taking loans from loan officers (bankers) who are also employed by The Company Town. This model is drastically simplified but it shows how finance relations work in the modern financial economy where we have both private banking and public finance relations. Economic models of the complex financial system are impractical but the Federal Reserve tries to keep a statistical accounting model for financial instruments in the flow of funds accounts. Philosophical debates in economics revolve around the role and nature of finance and the role and nature of government.


Joon Chang's excellent and accessible Economics: The User's Guide discusses many of the various schools of economics, which he regards not as completing claimants to any scientific truth — for he denies that economics is a science — but rather as representatives of different philosophical systems.

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    The author’s name is Ha-Joon Chang, but for some reason SE edits it to only Joon Chang every time I publish it. Why is that?
    – h_undatus
    Feb 29 at 4:44
  • 2
    I've tried as well to edit the author's name, and I confirm that the Ha- prefix is somehow removed. Feb 29 at 9:58

Check out Daniel M. Hausman, Tony Lawson and Lawrence A. Boland for economics as a whole. Related to this could be the philosophy behind property and the philosophy of coercion (as they are fundamental in the meta-analysis), ranging from Robert Nozick to Karl Marx (or even some non-western cannon, though I'm not sure exactly where you could get that).

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