Philosophy of Markets


Richard Marshall interviews Liza Herzog in 3:AM Magazine:

3:AM: When you discuss the philosophy of markets you begin by pointing out that economists theorizing and modeling markets are inadequate. What’s the problem?

LH: Economic models make simplifying assumptions about human agency and about social interaction. If one only used these models to answer the questions they are supposed to answer, taking into account their methodological limitations, there wouldn’t be any problem. But often they are used to make much wider claims. For example, predications are based on a theoretical model, but with insufficient discussion of whether the assumptions of the model also hold in reality. Along the way, one often finds that normative judgments sneak in, but without being made explicit. Thus, one cannot even ask critical questions, for example whether certain theories serve the interests of certain social groups – whether they are ideologies in the classical sense.

3:AM: You also suggest that philosophers like Rawls’s on justice and others discussing social and political issues like Elizabeth Anderson tend to discuss the market as something to be tamed from the outside rather than be the central subject. Can you say something about this?

LH: Markets are often treated as “black boxes” in normative theorizing, maybe because of an implicit assumption that they are the economists’ business, not ours. Thinking about the boundaries of markets, and about their place in society, is very important, but it is not the only question we can, and should, ask about them. We also need to think about the internal structures of markets: what is their ontology, what kinds of social relations do they create between individuals, what internal distributive features do they have? Some might say that by treating markets from a philosophical perspective, we bestow too much honor to them, replicating the dominance that the economic sphere already has on our lives. But I think we can best resists the tendencies of markets to colonize the life world, as Habermas put it, if we get a better understanding of what they are, and what is problematic about them.

More here.