First Principles, Fallibilism, and Economics

The Center for the History of Political Economy Working Paper Series, 2017-01

30 Pages Posted: 20 Jan 2017 Last revised: 24 Jan 2017

See all articles by Kevin D. Hoover

Kevin D. Hoover

Duke University - Departments of Economics and Philosophy

Date Written: January 1, 2017

Abstract

The role of first principles in economics is examined through the lens of dominant methodological approaches of the classical and neoclassical periods. First principles are most clearly displayed in pure deductive systems. The tension between first principles as the basis for deductivist approaches to economics and the widespread belief that economics is an empirical discipline. Empirical disciplines require some sort of falsifiability. Fallibilism is the doctrine that no empirical beliefs can be certified as true beyond possibility of doubt. Yet, empirical inquiries also require a starting place. Even rejecting foundationalism, any inquiry starts with indubitable beliefs – that is, beliefs that are not in fact doubted. Anti-foundationalism and fallibilism are in tension, as indubitability appears to have necessary consequences, undercutting fallibilism, while fallibilism threatens confidence in the de facto first principles that begin inquiry. This tension is examined in the different attempts to define economics and its method from John Stuart Mill’s economics as the science of wealth through Lionel Robbins’ and recent neoclassical economists’ economics as the optimal use of scare resources. Commitment to first principles risks emptying economics of its empirical content, while commitment to empirical content entails violating supposed first principles and muddles the boundaries of the discipline. Finally, Stigler and Becker’s “De Gustibus Non Est Disuptandum” is considered as an attempt to square empiricism with Robbins’ deductivism.

Keywords: economics, first principles, fallibilism, foundationalism, empiricism, John Stuart Mill, Lionel Robbins, George Stigler, Gary Becker

JEL Classification: B41, B12, B13, B21, D00, A10

Suggested Citation

Hoover, Kevin D., First Principles, Fallibilism, and Economics (January 1, 2017). The Center for the History of Political Economy Working Paper Series, 2017-01, Available at SSRN: https://ssrn.com/abstract=2901539 or http://dx.doi.org/10.2139/ssrn.2901539

Kevin D. Hoover (Contact Author)

Duke University - Departments of Economics and Philosophy ( email )

213 Social Sciences Building
Box 90097
Durham, NC 27708-0204
United States

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