Ontology of Economics: Difference between revisions
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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. | 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. | ||
[https://buffalo | [https://buffalo.box.com/v/Ontology-of-Economics-3-Slides Slides] | ||
[https://buffalo.box.com/v/Ontology-of-economics-3 Video] | [https://buffalo.box.com/v/Ontology-of-economics-3 Video] | ||
Revision as of 00:25, 16 September 2025
PHI 637. Registration number: [1]
Mode: Online Asynchronous
Credit: 2 credit hours, 3 credit hours with additional assigment
Room: Park 141, UB North Campus
Instructors: Barry Smith (Philosophy, UB), Emanuele Martinelli (Philosophy, University of Zurich)
Office hours: BS: by appointment via email. Feel free to send emails regarding any issues with the course material, the electronic delivery thereof, and your required paper.
Course Description
This course is a two-credit hour seminar, taught in online asynchronous mode, with one synchronous meeting in the final session. Students intending to take this course should contact Dr Smith at phismith@buffalo.edu. To obtain three credit hours students can submit an additional 3000 word essay. 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.
Part Three deals with a range of topics including the interplay between law and economics, the role of documents in economic transactions, and the ontology of money.
Required 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
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.
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
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.
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
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.
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
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.
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.
Civil Law, Services and Commodities, and the Mystery of Capital
Austrian Economcs and the Foundations of the Civil Law Slides
Ontology of Services and Commodities Slides
John Searle and Hernando de Soto: The Mystery of Capital and the Construction of Social Reality Slides
Documents Acts, Creativity, and Entrepreneurial Perception
Student presentations
Supplementary material selected from:
The Ontology of Document Acts Slides
AI Creativity and Entrepreneurial Perception Slides
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 | Review of reading matter and associated online content |
| The student will acquire experience in using the methods of philosophical argument, in formulating complex propositions pertaining to economic matters | Writing a technical essay with successive drafts under the guidance of faculty | 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]
Grading
Grading will be based on preparation of an essay of minumum 2000 words. (A second 3,000 essay is required for the 3 credit hour version of this course.) Content and structure of the essay should be discussed with Dr Smith. The essay should be submitted by in a series of drafts. In addition the student will prepare a presentation on the content of this essay, which will be presented in the final class meeting and subject to critique from faculty and other students. Use of GenAi tools will be welcomed, but the student should make clear where and how such tools were used, and identify which specific theses are original.
Using LLMs in writing your essay
You will do your best work, and gain the most from this class, if you study the literature, think very carefully, and write your essays in your own words. However, if you wish to use LLMs to assist in your essay writing, then this is allowed -- but only under the following rules. (These rules hold both for 2000 and for 3000 word essays.)
1. create a 1000 word draft in your own words; this should be a substantive draft, but it can contain for example rough notes pointing to further lines of development. I reserve the right to use software tools, but also my own judgment, to ensure this draft was written by you. Not only this initial draft, but also all further steps in the list below, should rely on study by you of the relevant literature. Both your draft and your final essay should accordingly contain lists of references.
2. submit this draft to me at phismith@buffalo.edu by the middle of the semester
3. the experimental phase (LLM experts can ignore this phase): once you have my approval of your 1000 word draft, you should start experimenting with your favored LLM using this draft as an attachment and formulating prompts relating to its contents; you should experiment heavily using different sorts of prompts, the more creative the better (since the prompts you use in the next phase will be evaluated for your grade); when you are ready to start the interactions with the LLM which are relevant to your grade you move to:
4. the official phase (from here on everything will be logged by the LLM): you create a prompt using your draft as an attachment (as in step 3.); this will start a potentially long process of improvements in your essay created by further contributions from you but with assistance from the LLM whose outputs, sometimes in the form of new or extended versions of your essay, which are generated on the basis of successive prompts on your part; you should note that LLMs have a characteristic style (sometimes called 'Hollyood style', which means: it aims only to please, and too often shuns difficult questions); you should attempt with your prompts to manipulate the style of the LLM output in a direction more appropriate to serious academic research; still more importantly you should be aware that LLMs often make errors (called 'hallucinations'), for example inventing references in the literature which do not in fact exist; you will receive a higher grade if you identify such errors and thereby request in your prompts that the LLM corrects them;
5. the LLM will keep track of everything you tell it to do with your essay; this is because at each stage you have the opportunity to save your work thus far -- including all your prompts -- by using the LLM 'save' function. Use this function regularly to log your progress. This log is part of what will be evaluated for your grade. The link will stay the same throughout, but it will refer to a growing body of the content you have created along the way.
6. When finished press 'save' for one last time and take a note of the link; send me (a) this link, (b) your completed essay, (c) any notes on the log to which the link will point -- for example requesting that I ignore specific chains of prompts because they proved to be dead ends
7. at the end of the process you should send the link resulting from your final save to me, along with your essay. At the end of the process you should send, with to me your essay, which should include the link resulting from your final ‘save’. In addition you should send me a saved version of what comes up at that link in word or pdf. You can redact those portions of the latter you do not want me to see.
Grades will be determined on the basis of (a) originality of the initial draft, (b) creativity of your prompts, (c) quality of final essay,
Note that if you are using the free version of an LLM it may require you to send longer documents in separate chunks. In this case I recommend that you invest (ca. $20 per month) for the extended version of the LLM.
Feel free to contact me if you have any questions.
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
Academic integrity is a fundamental university value. Through the honest completion of academic work, students sustain the integrity of the university while facilitating the university's imperative for the transmission of knowledge and culture based upon the generation of new and innovative ideas. See http://grad.buffalo.edu/Academics/Policies-Procedures/Academic-Integrity.html.
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.
Available resources on sexual assault: UB is committed to providing an environment free of all forms of discrimination and sexual harassment, including sexual assault, domestic and dating violence and stalking. If you have experienced gender-based violence (intimate partner violence, attempted or completed sexual assault, harassment, coercion, stalking, etc.), UB has resources to help. This includes academic accommodations, health and counseling services, housing accommodations, helping with legal protective orders, and assistance with reporting the incident to police or other UB officials if you so choose. Please contact UB’s Title IX Coordinator at 716-645-2266 for more information. For confidential assistance, you may also contact a Crisis Services Campus Advocate at 716-796-4399.
Counselling services: As a student you may experience a range of issues that can cause barriers to learning or reduce your ability to participate in daily activities. These might include strained relationships, anxiety, high levels of stress, alcohol/drug problems, feeling down, health concerns, or unwanted sexual experiences. Counseling, Health Services, and Health Promotion are here to help with these or other concerns. You learn can more about these programs and services by contacting:
- Counseling Services: 120 Richmond Quad (North Campus), phone 716-645-2720
- Health Services: Michael Hall (South Campus), phone: 716-829-3316
- Health Promotion: 114 Student Union (North Campus), phone: 716- 645-2837
