This paper considers the relevance of the Duhem-Quine thesis in economics. In the introductory discussion which follows, the meaning of the thesis and a brief history of its development are detailed. The purpose of the paper is to discuss the effects of the thesis in four specific and diverse theories in economics, and to illustrate the dependence of testing the theories on a set of auxiliary hypotheses. A general taxonomy of auxiliary hypotheses is provided to demonstrate the confounding of auxiliary hypotheses with the testing of economic theory.

In this paper we consider a Bayesian treatment of ‘Duhem's thesis’, the proposition that theories are never refuted on empirical grounds because they cannot be tested in isolation from auxiliary hypotheses about initial conditions or the operation of scientific instruments. Sawyer, Beed, and Sankey (1997) consider Duhem's thesis (and its restatement in stronger and weaker forms as the ‘Duhem-Quine thesis’) and its role in hypothesis testing, using four theories from economics and finance as examples. Here we consider Duhem's thesis in the context of theory choice, econometric results, and the ‘farm problem’ in agricultural economics. This problem is defined as persistently low and highly variable prices, incomes, and returns in the agricultural sector as compared to the nonagricultural sector of the U.S. economy. The existence of the farm problem tends to refute an implication of general equilibrium (GE) theory — that resources flow to equate returns between sectors of the economy. We discuss Duhem's thesis in the context of demonstrating why evidence supporting the farm problem has not diminished the standing of general equilibrium theory among agricultural economists.

Many people believe that we have responsibility towards the distant future, but exactly how far this responsibility reaches and how we can find a reasonable ethical foundation for it has not been answered in any definitive manner. Future people have no power over us, they form no part of our moral community and it is unclear how we can represent them in a possible original position. All these problems can be circumvented when you take an impersonal decision criterion like maximizing total or average utility. Such a sum-ranking criterion is neutral with respect to distance in time or space: my utility, my neighbour's and that of our descendants all carry the same weight. This makes future people an integral part of present decisions. Time-neutrality was defended by, among others, Sidgwick, Pigou and Ramsey.

The Inexact and Separate Science of Economics (ISSE) (Hausman, 1992) represents the most ambitious attempt to provide a systematic account of economic methodology since the first edition of Blaug's The Methodology of Economics (1980). As such, it has been the subject of extensive critical commentary (for example, Blaug, 1992b; Backhouse, 1995; Miller, 1996; Hahn, 1996; Mäki, 1996). For all the attention it has received, however, some important aspects of the book's thesis have not been developed properly. Two important ones are (1) what might be called, following the terminology used in the experimental economics literature, the ‘framing effect’ of Hausman's definition of economics, and (2) the significance of Hausman's claim that economists are committed to developing economics as a ‘separate’ science. To understand these points it is important to make explicit the position from which Hausman approaches the philosophy of science.

The principle of belief persistence, or conservativity principle, states that ‘When changing beliefs in response to new evidence, you should continue to believe as many of the old beliefs as possible’ (Harman, 1986, p. 46). In particular, this means that if an individual gets new information, she has to accommodate it in her new belief set (the set of propositions she believes), and, if the new information is not inconsistent with the old belief set, then (1) the individual has to maintain all the beliefs she previously had and (2) the change should be minimal in the sense that every proposition in the new belief set must be deducible from the union of the old belief set and the new information (see, e.g., Gärdenfors, 1988; Stalnaker, 1984). We focus on this minimal notion of belief persistence and characterize it both semantically and syntactically.

In a recent paper, Pierluigi Barrotta (1996) argues that Mises ‘ended up by defending an epistemological tenet very far from Kant's’ (p. 51), concluding that ‘Mises's apriorism cannot be vindicated through Kant's epistemology’ (p. 65). In contrast, I shall argue that certain of Mises's arguments can be reconstructed in Kantian terms, and thus the distance between Mises and Kant is not as extreme as Barrotta's argument may appear to suggest. Specifically, I shall argue that Mises, like Kant, seeks to establish the a priori nature of the category of causality. To this extent at least, Mises's apriorism can be vindicated through Kant's epistemology.

Ronald Dworkin's (1981) theory of equality of resources draws heavily on conceptual tools developed in economic theory. His criterion for a just distribution of resources is closely connected with two economic ideas: first, the idea that a distribution of resources reflects a concern for equality if it is envy-free; second, the idea that such an envy-free distribution of resources is attainable as a competitive equilibrium from equal split. The objective of this paper is to show that the criterion of equality of resources has been misinterpreted by normative economics, largely due to Dworkin's own lack of precision, and that it needs to be reformulated in order to be intelligible. The dimensions along which the reformulation is needed concern (1) the nature of the preferences used in what Dworkin calls the ‘envy test’ and (2) the nature of the envy test itself.

Advances in technology have made it possible for us to take actions that affect the numbers and identities of humans and other animals that will live in the future. Effective and inexpensive birth control, child allowances, genetic screening, safe abortion, in vitro fertilization, the education of young women, sterilization programs, environmental degradation and war all have these effects.

The context-free weak ordering principle (that rational preferences are weakly ordered, and that subtracting members from the domain of alternatives does not alter the ordering of the original domain, see, for example, Savage, 1972, pp. 205–6; McClennen, 1990, pp. 29–30) is viewed by many as a cornerstone of rational choice theory. McClennen, for example, claims (1990, p. 1) that this principle is one of a pair on which '[t]he theory of rational choice and preference, as it has been developed in the past few decades by economists and decision theorists, rests', and Sen (1970, p. 17) characterizes a version of context freedom (the ‘independence of irrelevant alternatives’, or ‘property α’) as ‘a very basic requirement of rational choice’. But this principle is certainly not uncontroversial: there are examples of (putative) principle is certainly not apper irrational.

Kuhn and Moresi (1995) (henceforth, K&M) have proposed a useful taxonomy for classifying prisoners' dilemmas (henceforth, PDs). This comment is concerned with K&M's observation that legal penalties for defection can transform PDs into cooperative games, and their argument that the role of the law may vary depending on how the PD is classified by their taxonomy. The purpose of this note is to support K&M's analysis by demonstrating that the law of damages, as understood by economic analysis, already performs the function that K&M assign to legal penalties for defection.

Are there worthwhile values and ideals which flourish in the procedures of the state but wither in the transactions of the market? Are there equitable and fulfilling social relationships which are nurtured in the economic sphere but crumble in the political world? There is clearly some truth in the claim that at least in certain circumstances market systems inculcate in people not only ‘honesty and diligence, but also sensitivity to the needs and preferences of others’ (Gray, 1992, p. 24). On the other hand, it is difficult to deny the appeal of a tradition of thought which attaches moral superiority to the non-market ideals and values epitomised in the gift relationship. Titmuss (1970), for example, objected to treating blood as a commodity in part because it undermined the sense of fraternity or community which a system of voluntary blood donors enhanced. A contemporary statement of this position holds that gift values differ from commodity values in being ‘tokens of love, admiration, respect, honor, and so forth, and consequently lose their value when they are provided for merely self-interested reasons’ (Anderson, 1990, p. 203).

In spite of the numerous occasions on which Adam Smith expresses his reservations regarding the morality of commercial societies, there seems to be an agreement that he believed such systems to be fundamentally just. To some, this is so because they attribute to Smith a concept of justice which is narrowly confined to the ‘right to have [one's] body free from injury, and [one's] liberty free from infringement’ (Lectures on Jurisprudence, p. 401). In a world where people have an interest in the fortune of others regardless of how selfish their motives for action might be, injuring someone else's body or restricting someone else's liberty is unlikely to be the behavioural norm.

To others, natural liberty in the sphere of economic activity is just not only because individuals behind the system naturally comply with justice in its commutative sense, but also because the system itself generates justice in the distributive sense. Such arguments are based on either the working of the invisible hand — which produces the ‘same distribution of the necessities of life, which would have been made, had the earth been divided into equal portions among all its inhabitants …’ (TMS, p. 185) — or on the approval of the ‘impartial spectator’ of the distribution which is associated with the natural price (Young, 1986).

In modern economics, the use of sympathy and empathy shows significant ambiguity. Sympathy has been used in two different senses. First, it refers to cases where the concern for others directly affects an individual's own welfare (Sen, 1977). Second, the term has served the purposes of welfare economics, where it is associated with interpersonal comparisons of the extended sympathy type, that is, comparisons between one's own situation in a social state and someone else's in a different social state (Arrow, 1963 [1951]). On the other hand, empathy has been used interchangeably with sympathy either to render the idea of interdependent utility functions (Leibenstein, 1976), or to convey the imaginative process of imagining oneself in someone else's place (Harsanyi, 1977).

As late twentieth-century discourses of modernity and postmodernity invoke their Enlightenment heritage in a search for the origins of their present achievements and predicaments, Adam Smith's works are still seen as a canonic representative of that heritage. Smith has long been evoked as the ‘father’ of economics and the original proponent of laissez-faire capitalism, but the political changes in recent decades have reconstituted his iconic status. With the full range of Smith's published and unpublished writings and lectures now widely available, there has been a huge growth in the scholarly literature on Smith which has subjected this traditional view to searching questions. The overwhelming conclusion to emerge is that Smith's works display a subtlety and complexity that is at odds with the received image of Smith as the spokesman of modernity, but the diversity of interpretation raises some difficult methodological issues.