Ontology of Economics
PHI 637. Registration number: [1]
Time: 1:00-3:50pm, selected Mondays, Fall Semester 2024. Begins September 23 in 141 Park Hall.
Mode: Hybrid: Face-to-Face, Online Synchronous, and Online Asynchronous
Credit: 2 credit hours
Room: Park 141, UB North Campus
Instructors: Barry Smith (Philosophy), Emanuele Martinelli (Philosophy, University of Zurich)
Office hours: BS: by appointment via email; EM: by appointment via email
Course Description
This course is a two-credit hour seminar, taught in hybrid mode. Students intending to take the course online should contact Dr Smith at phismith@buffalo.edu. To obtain three credit hours students can register for a supplementary tutorial with Dr Smith. Students with no background in philosophy are recommended to take the 1-credit-hour asynchronous course described here.
The goal of the course is to give the students conceptual tools to understand and evaluate critically the philosophical assumptions of different schools of thought in economics. Debates between different approaches in economics may be viewed in part as ontological debates as to the nature of social entities such as prices, markets, economic actors. Hence, the course aims at introducing the core categories that determine the world of economics and exploring how different interpretations of these categories can support different economic claims and systems.
Part One of the course introduces topics in social ontology with an eye on economic applications: agency, complexity, information, collectivity, speech acts, claims and obligations.
Part Two analyzes themes underlying the works of the main contemporary economic schools of thought. Austrian economics will be given special prominence because it is arguably the economic school of thought that makes the most open use of philosophical categories in its theories.
Recommended background reading
W. Grassl, and B. Smith (eds.), 2010, Austrian Economics: Historical and Philosophical Background, pp. 1-36, F. A. Hayek, 1945, "The Use of Knowledge in Society"
G. M. Hodgson, 2007, “Meanings of Methodological Individualism”
C. List & P. Pettit, 2011, "Group Agency: The Possibility, Design, and Status of Corporate Agents", Part I
P. Törnberg, 2018, "Complex Realist Economics"
B. Smith and J. Landgrebe, 2022, "Models of Complex Systems", especially pp. 157f.
Recommended background video content
Ontologies of Commerce, Deontic Ontologies
Schedule
September 23: Introduction
'Ontology' can be understood in two ways: 1. as a branch of philosophy that deals with the kinds and categories of entities and how they relate. 2: a more technical area which overlaps with computer science, and which is focused on the use of category systems in data and information systems in large organizations. The bulk of this course is devoted to ontology in the philosophical sense, but this introductory session focuses on technical uses of ontologies. As an introduction to this class we start with an overview of the background of Barry Smith's work in ontology in the study of Austrian philosophy and of Austrian economics. We then move to some examples designed to illustrate how the ontological approach can help us to understand issues in the applied ontology of space/place.
September 30: Introduction: Economic Agents and Agency
This class introduces the topic of 'agency' from the point of view of social ontology, with a focus on the different kinds of agents that populate the social world. This reflection on agency can make our understanding of core economic notions more sophisticated, including economic actors, markets, government interventions, firms. When reflecting on the assumptions of different economic models, philosophical considerations about society are a useful tool. Another very important conceptual distinction is that between 'collectivism' and 'individualism'. Moving from the various levels of this distinction, the class will examine the methodological division between microeconomics and macroeconomics under the lens of the individualist-collectivist spectrum that we find in the socio-ontological literature.
Supplementary Slides
October 7: Market Equilibrium and Critical Perspectives
This class introduces classical and neoclassical economics. We will present the main proposals has advanced by the latter to overcome some core tenets of classical economics. This will include reflection on the assumptions of neoclassical economics, such as economic rationality, general equilibrium, and the invisible hand. We will then explore their deeper philosophical implications by comparing them with notions of social ontology. Different perspectives that try to move away from classical economics are presented, with a major focus on schools of economic though that have critized the core notion of economic equilibrium.
October 14: FALL BREAK (No class)
October 21: Economic Goods and Institutions
1. (BS) The distinction between goods and services. An application of BFO to the economic realm.
2. (EM) Property plays a pivotal role in any commercial economy. The class will discuss the nature and origin of property, discussing classical views like Hohfeld's and Locke's in comparison with the realist perspective of Reinach. Introducing an understanding of the goods at the core of property, the class will encounter Samuelson's classic notions of 'rivalry' and 'excludability' and the subsequent debate around public goods. These may be extended to draw a basic ontology of different kinds of economic goods, following the intuitions of Elinor Ostrom and Mancur Olson. Building an ontology of economic goods is important in the normative domain as well, as institutions can be understood as different systems of rules that are tailored to facilitate the social provision of different kinds of economic goods.
Part 1: BS on Goods and Services
Beyond the Goods-Services Continuum
Part 2: EM on Goods and Institutions
October 28: Austrian Economics 1 - Menger, Mises, and Apriorism
The class introduces the philosophical presuppositions of the Austrian school of economics, and its program to promote an understanding of economics as a philosophy of human action, or praxeology. This interest begins in the works of the two founding fathers of the school, Carl Menger and Ludwig von Mises, and the course thus introduces the main innovations they proposed: apriorism, the praxeological approach, the theory of exchange, the subjective theory of value, the re-establishment of methodological individualism.
November 4: Austrian Economics 2 - Hayek and the Price System
One of the core objections to neoclassical economics made by the representatives of the Austrian school is their nuanced approach toward quantitative mathematical models of the economy. Firstly, the class will introduce the central notion of 'need' in Menger's thought, as an alternative to the neoclassical notion of 'utility.' The course, further, moves to Hayek's understanding of social phenomena as spontaneous orders, and the ontological foundations of this perspective. This maps, in turn, to Hayek's understanding of the economy as a complex system, prompting the recent development of complexity economics.
Discussion on Hayek and Cultural Evolution
Paper on Needs and Desires in Carl Menger
November 11: Austrian Economics 3 - Schumpeter and Kirzner on Entrepreneurship and Creativity in Humans and Beyond
The last core tenet of Austrian economics that the course finds philosophically important is entrepreneurship as the equilibrating force that drives the process of market equilibrium. The class will first put forward an understanding of the economic equilibrium as a process rather than a static state or goal, through an analysis of the price system in Hayek's and Kirzner's thought. The course will thus present the topic of entrepreneurship through the (sometimes conflicting) ideas of Joseph Schumpeter and Israel Kirzner. The focal point is that entrepreneurship is a fundamental notion in economics that is rarely investigated outside the Austrian school, and this has to do with the Austrian's recognition of the intrinsic complexity of the economy. Entrepreneurship can be further generalized as a feature of all action that has to do with creativity and proactivity, and this will allow to consider the hypothesis of designing AI entrepreneurs out of present-day technologies like stock market prediction systems, and so on.
November 18: Market Socialism, AI, and Economic Planning
The class will explore the 'calculation debate' sparked by Mises' and Hayek's objections to economic planning. The two main socialist replies will be introduced: the objectivity of economic value through the labor theory of value, and market socialism. Soon, the calculation debate has been flooded by proposals to harness the successes of AI technology for planning the economy. The class will thus present and discuss the most promising models that attempt to plan the economy through AI intervention, starting from Salvador Allende's CyberSyn project in Chile: the Lange-Lerner model, the Cockshott-Cottrell model, Nieto's model, and Saros' democratic economic planning model.
November 25: Student Presentations
1:00pm Olivia Hobai: "Rationality, behavioral economics, and scientific realism"
1:30pm Giacomo de Colle: "The economic and material basis of the state"
December 9: Student Presentations
1:00pm James Cordeiro, "Aspects of the Ontology of Stablecoins"
1:30pm Elena Milivinti, "Bridging Classical Economic Theories with Contemporary Challenges"
Student Learning Outcomes
| Program Outcomes/Competencies | Instructional Method(s) | Assessment Method(s) |
|---|---|---|
| The student will acquire a knowledge of the philosophy of the social sciences in general and of economics in particular. | Lectures and class discussions | Review of reading matter and associated online content and participation in class discussions |
| The student will acquire experience in using the methods of philosophical argument, in formulating complex propositions pertaining to economic matters | Participation in practical experiments | Review of results |
| The student will acquire experience in formulating ideas using powerful persuasive prose. | Creation of documentation and youtube presentations | Review of results |
How to Write an Essay
- Steven Pinker, The Sense of Style, Penguin Books, 2014
- Strunk and White, The Elements of Style
- Harvard's guide to writing philosophy
- Jim Pryor's guide to writing philosophy
- Jordan Peterson's Essay Writing Guide
- How to Use ChatGPT to write an essay
Suggested Additional Reading
W. B. Arthur, 2021, “Foundations of Complexity Economics”, [2]
S. Bostaph, 2019, “Schumpeter vs Kirzner on Entrepreneurs”, [3]
P. Boettke & R. Candela, 2022, "On the Feasibility of Technosocialism", [4]
S. R. Chant, 2007, "Unintentional Collective Action", [5]
R. Crespo, 2022, "The Nature of the Economy", [6]
A. Cottrell & P. Cockshott, 1993, "Calculation, Complexity and Planning: The Socialist Calculation Debate Once Again", [7]
H. De Soto, 2001, "The Mystery of Capital", [8]
N. Effingham, 2009, "The Metaphysics of Groups", [9]
J. Fernández-Villaverde, 2020, "Simple Rules for a Complex World with Artificial Intelligence", [10]
G. Gaus, 2021, "The Open Society and Its Complexity", [11]
F. A. Hayek, 2012, "Law, Legislation and Liberty. A New Statement of the Liberal Principles of Justice and Political Economy", pp: 35-54, [12]
P. Mirowski & K. Somefun, 1998, "Towards an Automata Approach of Institutional (and Evolutionary) Economics", [13]
S. Phelan, 2020, "Can Entrepreneurship Be Learned by Intelligent Machines", [14]
L. Philips & M. Rozworski, 2019, "The People's Republic of Walmart", [15]
A. Quinton, 1976, “Social Objects”, [16]
S. Ramoglou, 2021, "Why Do Disequilibria Exist?", [17]
L. E. Read, 1958, "I, Pencil: My Family Tree", [18]
R. Scruton & J. Finnis, 1989, "Corporate Persons", [19]
J. Searle, 2010, "Collective Intentions and Actions", [20]
A. Sen, 1977, "Rational Fools: A Critique of the Behavioral Foundations of Economic Theory", [21]
S. Thurner et al., 2018, "Introduction to the Theory of Complex Systems", [22]
T. Yamamori, 2020, "The Intersubjective Ontology of Need in Carl Menger", [23]
Important Dates
| Oct 19 | - submit proposed title and abstract of your essay |
| Oct 23 | - submit a table of contents of your essay and 300 word summary plus draft of associated ppt slides |
| Oct 30 | - submit first draft of essay (~1000 words) and associated powerpoint (~10 slides) |
| Nov 13 | - submit second draft of essay (~2000 words) and associated powerpoint (~10 slides) |
| Nov 25 | - class presentation |
| Dec 2 | - class presentation |
| Dec 10 | - submit final version of essay and powerpoint slides and upload final version of video to youtube |
Grading
Grading will be based on two factors:
I: understanding and criticism of the material presented in classes 1-8
All students are required to take an active part in class (and where relevant on-line) discussions throughout the semester.
II: preparation of an essay, and associated powerpoint slides and recorded presentation.
Content and structure of the essay should be discussed with Dr Smith.
Grading Policy: Grading follows standard Graduate School policies. Grades will be weighted according to the following breakdown:
Weighting Assignment
- 20% - class discussions
- 15% - youtube video presentation
- 15% - powerpoint slides
- 50% - essay
Final Grades
Percentages refer to sum of assignment grades as listed above
Grade Quality Percentage
| A | 4.0 | 90.0% -100.00% |
| A- | 3.67 | 87.0% - 89.9% |
| B+ | 3.33 | 84.0% - 86.9% |
| B | 3.00 | 80.0% - 83.9% |
| B- | 2.67 | 77.0% - 79.9% |
| C+ | 2.33 | 74.0% - 76.9% |
| C | 2.00 | 71.0% - 73.9% |
| C- | 1.67 | 68.0% - 70.9% |
| D+ | 1.33 | 65.0% - 67.9% |
| D | 1.00 | 62.0% - 64.9% |
| F | 0 | 61.9% or below |
An interim grade of Incomplete (I) may be assigned if the student has not completed all requirements for the course. An interim grade of 'I' shall not be assigned to a student who did not attend the course. The default grade accompanying an interim grade of 'I' shall be 'U' and will be displayed on the UB record as 'IU.' The default Unsatisfactory (U) grade shall become the permanent course grade of record if the 'IU' is not changed through formal notice by the instructor upon the student's completion of the course.
Assignment of an interim 'IU' is at the discretion of the instructor. A grade of 'IU' can be assigned only if successful completion of unfulfilled course requirements can result in a final grade better than the default 'U' grade. The student should have a passing average in the requirements already completed. The instructor shall provide the student specification, in writing, of the requirements to be fulfilled.
The university’s Graduate Incomplete Policy can be found here.
Related Policies and Services
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Accessibility resources: If you have any disability which requires reasonable accommodations to enable you to participate in this course, please contact the Office of Accessibility Resources in 60 Capen Hall, 645-2608 and also the instructor of this course during the first week of class. The office will provide you with information and review appropriate arrangements for reasonable accommodations, which can be found on the web here.
University suppert services: Students are often unaware of university support services. For example, the Center for Excellence in Writing provides support for written work, and several tutoring centers on campus provide academic success support and resources.
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- Counseling Services: 120 Richmond Quad (North Campus), phone 716-645-2720
- Health Services: Michael Hall (South Campus), phone: 716-829-3316
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