What Economics Can Learn From Ontology: Toward an Interdisciplinary Reconciliation

What Economics Can Learn From Ontology: Toward an Interdisciplinary Reconciliation

Gloria Zúñiga y Postigo (Ashford University, USA)
Copyright: © 2020 |Pages: 22
DOI: 10.4018/978-1-7998-1037-7.ch011


This chapter will present the argument that the tools of ontology offer a means for teaching the philosophical foundations of economic value and for engaging interdisciplinarily the examinations of economics. Ontology is the branch of philosophy that is concerned with the description of existing domains in the world, the objects in such domains, and their relations. It does not attempt to explain or interpret, only to describe, and it is in this sense that ontology is reconcilable with the scientific methods of economics. Additionally, it is capable of describing the complex structures, relations, and emergence of economic objects in human economic activity. This chapter will address three insights from ontology that shed light on the implications of the notion of subjectivity in the theory of subjective economic value, the differences between economic value and other kinds of value, and the role that subjectivity and economic value have in the emergence of the social object we know as money.
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Although there have been important seed ideas advanced by the ancient Greek philosophers,1 the literature on the ontology of economics starts more formally in economics and with Carl Menger at the turn of the 20th Century (1976). Menger’s breakthrough was influential in the work of F. A. Hayek and others, but it lost its momentum around the end of the first half of the 20th Century. Ontological investigations have enjoyed a recent rise in popularity and the contemporary contributions are quite significant.2 The practical contribution from this resurgence of interest in the ontology of economics is that it has facilitated the understanding of complex economic processes for non-specialists, and fueled the rise of interdisciplinary specializations such as philosophy of economics, and interdisciplinary programs such as philosophy, politics and economics, known most commonly now as PPE. A mechanism that set the stage for the renewed interest in these interdisciplinary activities was the growing awareness of moral problems in business, which was part of the wave in philosophy in the 1970s of developing specific applications of ethics to each specialized area of human activity—e.g., medicine, psychiatry, engineering, animal husbandry, to name a few—and of the methods in which human beings grew, harvested, mined, or hunted, the natural resources in the world, including the treatment of the human labor hired for such activities. Business ethics is one of the most successful applications of ethics insofar as it has become a required course in many business and economics programs at most universities. Specializing in business ethics requires not only the knowledge of ethical theory but also of business methods and economic concepts. Courses in business ethics are thus a challenge for both economists and philosophers.

Ontology can assist to ameliorate this challenge. The tools of ontology can easily present the differences among different ethical theories, starting from the notion of the moral good employed as the criterion of justification in each ethical theory, to the description of the fundamental and background characteristics for each of the theories. The same can be achieved for economic concepts. Even if the more technical aspects of economic analysis will still remain inaccessible to non-specialists taking business ethics courses, the tools of ontology can make possible for students (who will form part of society as consumers and voters) to understand that they have a role in guiding the forces of supply and demand, that price increases are not set by companies (the Shkreli incident with the price of Daraprim, notwithstanding), that taxing only the rich brings negative unintended consequences, and the role of incentives in our decisions to spend or save. This continuing dissemination of economic knowledge to those who will not become economists does indeed fill a gap that had previously remained neglected.

The motivation for this paper is to further promote this interdisciplinary interaction by advancing the argument that ontology can make a significant contribution to economics that will allow its body of knowledge to be more accessible to non-specialists in academia and broader society. Why should economists be interested in this? An important reason is that economists can empower ordinary members of society. Economics has greater power than any other discipline in influencing fiscal and monetary policy in nations. The problem is that ordinary citizens vote for elected officials based on platforms that assume a particular economic position, and they must do this without having even a rudimentary understanding of basic economic concepts. The optimal situation would be that voters could access material from which they can grasp basic economic principles which will help them identify mere rhetoric and emotional appeal from fact. Even if ordinary citizens cannot grasp the more technical aspects of economic analysis, understanding basic principles will be enough for making better decisions that will affect whole societies.

Key Terms in this Chapter

Social Objects: Objects that come into being by spontaneous orders from human interactions that are not the result of human design or deliberation. They are constituted by beliefs that typically have a physical basis. Concepts, rules, and physical things, for example, can all be social objects.

Subjective: (a) The epistemic sense of subjective refers to an agent’s judgments whose truth or falsity depends on his or her attitudes, feelings, beliefs, points of view. For example, “I like chocolate” is a subjective judgment. As such, subjective judgments are reducible to the mind. (b) The ontological sense of subjective refers to judgments about facts in the world that can settle the truth or falsity of such judgments. For example, “I like Belgian chocolate” is a judgment that refers to the fact that there is such a thing as Belgian chocolate, and these facts can settle the truth of the kind of chocolate that I like. However, I if say “I like Antarctican chocolate,” then this judgment has no correspondence with a fact in the world since there isn’t such a thing as chocolate grown or made in Antarctica.

Economic Value: The causal connection that is perceived by an agent between a thing and the satisfaction of his or her present and urgent need.

Epistemic: Refers to the real of knowledge and justified belief known in philosophy as epistemology. Epistemology is concerned with the necessary and sufficient conditions of knowledge, its sources, its limits, theories of truth, what constitutes a justified belief, and whether the justification should be internal or external to the mind. and the truth conditions for propositions that represent.

Money: (a) In macroeconomics, money has been understood in terms of a classification of institutionalized currency that starts from the most liquid forms (M1) to broad money (M2, M3, or M4, depending on the practice) for the purposes of measuring the money supply for monetary policy considerations. (b) In economics and common-sense knowledge by ordinary users, money is the most efficient medium for exchange. In its institutionalized form, money is understood as being equivalent to the currency in a nation. More generally, money has taken many forms from shells, cigarettes, stamps, baseball cards, etc., and, more recently, cryptocurrencies.

Ontology: Ontology is the branch of philosophy that is concerned with the description of a domain, the objects in such a domain, and their relations that exist among these objects.

Philosophy: An activity of clarifying ideas—e.g., distinguishing an object, term, or idea from its closest conceptual neighbors, discovering its relevant domain(s) and boundaries, and advancing descriptions or definitions for it. In the course of roughly three millennia, this activity has resulted in the formation of well-defined bodies of knowledge that have given rise to disciplines in academia. Less formally, the activity of clarifying ideas assists individuals in self-reflection, character improvement, greater awareness of their moral agency, identifying goals, pursuing them, and seeking happiness.

Economic Objects: These are the objects that fall under classifications that define the fundamental denizens of economics, such as good, price, money, commodity, value, exchange.

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