Teleological Reasoning in Economics
The prime example of a teleological approach to economics can be found in the first part of Aristotle’s Politics. He defines economics as the art of creating the material and social conditions for the survival of the oikos or household. Simultaneously, he
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Teleological Reasoning in Economics Luk Bouckaert
Abstract The prime example of a teleological approach to economics can be found in the first part of Aristotle’s Politics. He defines economics as the art of creating the material and social conditions for the survival of the oikos or household. Simultaneously, he integrates economics in a social matrix that subordinates economics to politics and ethics. Modern philosophy and economics is anti-Aristotelian and anti-teleological. Modern economic actors are supposed to be driven by autonomous preferences and free choices. The market functions as a causal equilibrium mechanism that promote welfare for everyone as an unintended byproduct. Although Adam Smith interpreted this unintended teleological effect as an ‘invisible hand’, he was one of the first moral philosophers to underpin this order with a non-teleological substratum. After him, the deconstruction of teleology pursued its logic giving way to the idea of economics as a process of ‘creative destruction’ (Schumpeter). The paper explores how thinking economics as a relational dynamic opens a space for human creativity without losing the embeddedness in an ecological system of meaning and purpose. Teleological reasoning explains and helps understand phenomena by referring to their ultimate purpose and design. Modern positive science avoids teleological reasoning because of its controversial, metaphysical implications. Instead, causal analysis is its hallmark. Despite many efforts in economics to become a ‘pure science’, teleological reasoning has always paid a substantial role. Discussing e.g. the aim of business ipso facto implies a teleological mode of reasoning. Even if we do not agree in defining that purpose, at least we agree that a company has a purpose or telos. In a similar way we cannot fully understand the role of markets unless we explain their social utility and functioning. Hence the question ‘Do we need a teleological model of economics?’ seems to be trivial because the answer can only be in the affirmative. The more relevant questions are: why do we differ in defining the purpose of business and economics? Which teleological model should be prioritized
L. Bouckaert (*) Catholic University of Leuven, Leuven, Belgium European SPES Institute, Leuven, Belgium e-mail: [email protected] © Springer International Publishing AG 2017 P. Rona, L. Zsolnai (eds.), Economics as a Moral Science, Virtues and Economics 1, DOI 10.1007/978-3-319-53291-2_4
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in our context of today? Why do some of us define the aim of business as maximizing profit and others as realizing a set of stakeholder values or even serving the common good? Answering these questions refers us to the meta-stories of philosophical and normative views on economics, politics and ethics as well as to the historical context in which these views are embedded. In this paper we will identify four meta-stories or paradigms of teleological reasoning in economics and business. These models are historically dated but thei
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