This paper argues that measurements of opportunity which focus on the contents of a person's opportunity set fail to capture open-ended aspects of opportunity that liberals should value. I propose an alternative conception of ‘opportunity as mutual advantage’ which does not require the explicit specification of opportunity sets, and which rests on an understanding of persons as responsible rather than rational agents. I suggest that issues of distributive fairness are best framed in terms of real income, and that meaningful measurements of real income are possible if opportunity as mutual advantage is ensured.

Behaviourism is the view that preferences, beliefs and other mental states in social-scientific theories are nothing but constructs re-describing people’s behaviour. Mentalism is the view that they capture real phenomena, on a par with the unobservables in science, such as electrons and electromagnetic fields. While behaviourism has gone out of fashion in psychology, it remains influential in economics, especially in ‘revealed preference’ theory. We defend mentalism in economics, construed as a positive science, and show that it fits best scientific practice. We distinguish mentalism from, and reject, the radical neuroeconomic view that behaviour should be explained in terms of brain processes, as distinct from mental states.

In traditional decision theory, utility is regarded as a mathematical representation of preferences to be inferred from agents’ choices. In the recent literature at the interface between economics, psychology and neuroscience, several authors argue that economists could develop more predictive and explanatory models by incorporating insights concerning individuals’ hedonic experiences. Some go as far as to contend that utility is literally computed by specific neural areas and urge economists to complement or substitute their notion of utility with some neuro-psychological construct. In this paper, I distinguish three notions of utility that are frequently mentioned in debates about decision theory and examine some critical issues regarding their definition and measurability. Moreover, I provide various empirical and conceptual reasons to doubt that economists should base decision theoretic analyses on some neuro-psychological notion of utility.

The contemporary theory of epistemic democracy often draws on the Condorcet Jury Theorem to formally justify the ‘wisdom of crowds’. But this theorem is inapplicable in its current form, since one of its premises – voter independence – is notoriously violated. This premise carries responsibility for the theorem's misleading conclusion that ‘large crowds are infallible’. We prove a more useful jury theorem: under defensible premises, ‘large crowds are fallible but better than small groups’. This theorem rehabilitates the importance of deliberation and education, which appear inessential in the classical jury framework. Our theorem is related to Ladha's (1993) seminal jury theorem for interchangeable (‘indistinguishable’) voters based on de Finetti's Theorem. We also prove a more general and simpler such jury theorem.

In The Construction of Social Reality (1995), John Searle develops a theory of institutional facts and objects, of which money, borders and property are presented as prime examples. These objects are the result of us collectively intending certain natural objects to have a certain status, i.e. to ‘count as’ being certain social objects. This view renders such objects irreducible to natural objects. In this paper we propose a radically different approach that is more compatible with standard economic theory. We claim that such institutional objects can be fully understood in terms of actions and incentives, and hence the Searlean apparatus solves a non-existent problem.

Economists use tastes as a source of information about personal welfare and judge the effects of policies upon preference satisfaction; neoclassical welfare economics is the analytical embodiment of this preference sovereignty norm. For an initial distribution of wealth, the welfare-maximizing outcome is the one that exhausts all possible gains from trade. Gains from trade are defined relative to fixed ordinal preferences. This analytical apparatus consists of both the Pareto principle, which implies that externality-free voluntary trades increase welfare, and applied costbenefit analysis, which attempts to weight costs and benefits when evaluating policies that are not Pareto improvements.

The question of when people may impose risks on each other is of fundamental moral importance. Forms of “quantified risk assessment,” especially risk cost-benefit analysis, provide one powerful approach to providing a systematic answer. It is also well known that such techniques can show that existing resources could be used more effectively to reduce risk overall. Thus it is often argued that some current practices are irrational. On the other hand critics of quantified risk assessment argue that it cannot adequately capture all relevant features, such as “societal concern” and so should be abandoned. In this paper I argue that current forms of quantified risk assessment are inadequate, and in themselves, therefore, insufficient to demonstrate that current practices are irrational. In particular, I will argue that insufficient attention has been given to the cause of a hazard, which needs to be treated as a primary variable in its own right. However rather than reject quantified risk assessment I wish to supplement it by proposing a framework to make explicit the role causation plays in the understanding of risk, and how it interacts with factors which influence perception of risks and other attitudes to risk control. Once an improved description of risk perception is available it will become possible to have a more informed debate about the normative question: how safety should be regulated.

In modern economics, the use of sympathy and empathy shows significant ambiguity. Sympathy has been used in two different senses. First, it refers to cases where the concern for others directly affects an individual's own welfare (Sen, 1977). Second, the term has served the purposes of welfare economics, where it is associated with interpersonal comparisons of the extended sympathy type, that is, comparisons between one's own situation in a social state and someone else's in a different social state (Arrow, 1963 [1951]). On the other hand, empathy has been used interchangeably with sympathy either to render the idea of interdependent utility functions (Leibenstein, 1976), or to convey the imaginative process of imagining oneself in someone else's place (Harsanyi, 1977).

Discussions of Karl Popper's falsificationist philosophy of science appear regularly in the recent literature on economic methodology. In this literature, there seem to be two fundamental points of agreement about Popper. First, most economists take Popper's falsificationist method of bold conjecture and severe test to be the correct characterization of scientific conduct in the physical sciences. Second, most economists admit that economic theory fails miserably when judged by these same falsificationist standards. As Latsis (1976, p. 8) states, “the development of economic analysis would look a dismal affair through falsificationist spectacles.”

The concept of well-being is central to the subject matter of moral philosophy as well as economics. According to some moral theorists (particularly utilitarians) morality is about the maximization of social well-being. According to others, notably John Rawls (1972) we ought to give particular priority to the worst off members in society. Both these and other moral positions, whatever the priority they attach to different members of society in arriving at moral judgements, require an account of well-being or advantage. The concern with well-being is thus of foundational importance in moral philosophy, even if well-being is not thought of as all that matters. Furthermore, those who want to distinguish ‘morality’ from ‘self-interest’ must furnish us with an account of human interests, so that we can distinguish the moral realm from that of self-interest or prudence. The concerns of moral philosophers, here, clearly overlap with those of economists. Economists (particularly in welfare and development economics) are much concerned with questions of how well people are doing, with their ‘standard of living’ or ‘quality of life’. However, there are very different ways of thinking about each of these ideas. Indeed, we need to discriminate between different views of the quality of life and to decide which is the most appropriate for the purposes of moral theory and the normative parts of economics.

It is commonplace to suppose that the theory of individual rational choice is considerably less problematic than the theory of collective rational choice. In particular, it is often assumed by philosophers, economists, and other social scientists that an individual's choices among outcomes (or lotteries yielding specified probabilities of outcomes) accurately reflect that individual's underlying preferences or values. Further, it is now well known that if an individual's choices among outcomes (or lotteries thereof) satisfy certain plausible axioms of rationality or consistency, that individual's choice-behavior can be interpreted as maximizing expected utility on a utility scale that is unique up to a linear transformation (Ramsey, 1931; Savage, 1954; Von Neumann and Morgenstern, 1944). Hence, there is, in principle, an empirically respectable method of measuring individuals' values and a single unified schema for explaining their actions as value maximizing (insofar as they act rationally).

One of the fundamental components of the concept of economic rationality is that preference orderings are “complete,” i.e., that all alternative actions an economic agent can take are comparable (Arrow, 1951; De-breu, 1959). The idea that all actions can be ranked may be called the single utility assumption. The attractiveness of this assumption is considerable. It would be hard to fathom what choice among alternatives means if the available alternatives cannot be ranked by the chooser in some way. In addition, the efficiency criterion makes sense only if one can infer that an individual's choice reflects the best, in expected welfare terms, among all choices that individual could have made (Sen, 1982a). The possibility that a rearrangement of resources could make someone “better off” without making others “worse off” can be understood only if the post-rearrangement world is comparable with the pre-rearrange-ment world.

I attempt a reconstruction of Adam Smith's view of human nature as explicated in The Theory of Moral Sentiments (TMS). Smith's view of human conduct is neither functionalist nor reductionist, but interactionist. The moral autonomy of the individual, conscience, is neither made a function of public approval nor reduced to self-contained impulses of altruism and egoism. Smith does not see human conduct as a blend of independently defined impulses. Rather, conduct is unified, by the underpinning sentiment of sympathy.

Neuroeconomics is the newest of the economic sciences with a focus on how the embodied human brain interacts with its institutional and social environment to make economic decisions. This paper presents an overview of neuroeconomics methods and reviews a number of results in this emerging field of study.

The goal of neuroeconomics is a mathematical theory of how the brain implements decisions, that is tied to behaviour. This theory is likely to show some decisions for which rational-choice theory is a good approximation (particularly for evolutionarily sculpted or highly learned choices), to provide a deeper level of distinction among competing behavioural alternatives, and to provide empirical inspiration for economics to incorporate more nuanced ideas about endogeneity of preferences, individual difference, emotions, endogeneous regulation of states, and so forth. I also address some concerns about rhetoric and practical epistemology. Neuroscience articles are necessarily speculative and the science has proceeded rapidly because of that rhetorical convention. Single-study papers are encouraged and are necessarily limited in what can be inferred, so the sturdiest cumulation of results, and the best guide forward, comes in review journals which compile results and suggest themes. The potential of neuroeconomics is in combining the clearest experimental paradigms and statistical methods in economics, with the unprecedented capacity to measure a range of neural and cognitive activity that economists like Edgeworth, Fisher and Ramsey daydreamed about but did not have.

This paper examines a broad range of ethical perspectives and principles relevant to the analysis of issues raised by the science of climate change and explores their implications. A second and companion paper extends this analysis to the contribution of ethics, economics and politics in understanding policy towards climate change. These tasks must start with the science which tells us that this is a problem of risk management on an immense scale. Risks on this scale take us far outside the familiar policy questions and standard, largely marginal, techniques commonly used by economists; this is a subject that requires the full breadth and depth of what economics has to offer and a much more thoughtful view of ethics than economists usually bring to bear. Different philosophical approaches bring different perspectives on understanding and policy, yet they generally point to the case for strong action to manage climate change.

In The Enterprise of Knowledge (Levi, 1980a), I proposed a general theory of rational choice which I intended as a characterization of a prescriptive theory of ideal rationality. A cardinal tenet of this theory is that assessments of expected value or expected utility in the Bayesian sense may not be representable by a numerical indicator or indeed induce an ordering of feasible options in a context of deliberation. My reasons for taking this position are related to my commitment to the inquiry-oriented approach to human knowledge and valuation favored by the American pragmatists, Charles Peirce and John Dewey. A feature of any acceptable view of inquiry ought to be that during an inquiry points under dispute ought to be kept in suspense pending resolution through inquiry.

What distinguishes preference utilitarianism (PU) from other utilitarian positions is the axiological component: the view concerning what is intrinsically valuable. According to PU, intrinsic value is based on preferences. Intrinsically valuable states are connected to our preferences (wants, desires) being satisfied.

I am most grateful to Elizabeth Anderson (2000), Philip Pettit (2000) and Thomas Scanlon (2000) for making such insightful and penetrating comments on my work and the related literature. I have reason enough to be happy, having been powerfully defended in some respects and engagingly challenged in others. I must also take this opportunity of thanking Martha Nussbaum, for not only chairing the session in which these papers were presented followed by a splendid discussion (which she led), but also for taking the initiative, in the first place, to arrange the session.