When my family discusses how we should spend a summer holiday, we start from certain common understandings about our preferences. We prefer self-catering accommodation to hotels, and hotels to campsites. We prefer walking and looking at scenery and wildlife to big-city sightseeing and shopping. When it comes to walks, we prefer walks of six miles or so to ones which are much shorter or much longer, and prefer well-marked but uncrowded paths to ones which are either more rugged or more popular. And so on. These common understandings greatly simplify the task of choosing between holiday destinations and activities, by allowing us quickly to eliminate many options. But what does it mean to say that we prefer one thing to another?

Egalitarian theories of justice hold that equality should be promoted. Typically, perfect equality will not be achievable, and it will be necessary to determine which of various unequal distributions is the most equal. All plausible conceptions of equality hold that, where perfect equality does not obtain, (1) any benefit (no matter how small) to a worst-off person that leaves him/her still a worst-off person has priority (with respect to equality promotion) over any benefit (no matter how large) to a best-off person, and (2) any benefit to a worse-off person (even if not a worst-off person) has priority over a benefit of the same size to a better off person (even if not a best-off person). Beyond that there is much disagreement.

Trygve Haavelmo's 1944 article ‘The Probability Approach in Econometrics’ is considered by most to have provided the foundations for present day econometrics (Morgan, 1990, Chapters 8 and 9). Since Haavelmo (1944), extraordinary advances have been made in econometrics. However, over the last two decades the efficacy and scientific status of econometrics has become questionable. Not surprisingly, the growing discontent with econometrics has been accompanied by a growing interest in econometric methodology.

It is a truism that a market economy cannot function without trust. We must be able to rely on other people to respect our property rights, and on our trading partners to keep their promises. The theory of economics is incomplete unless it can explain why economic agents often trust one another, and why that trust is often repaid. There is a long history of work in economics and philosophy which tries to explain the kinds of reasoning that people use when they engage in practices of trust: this work develops theories of trust. A related tradition in economics, sociology and political science investigates the kinds of social institution that reproduce whatever habits, dispositions or modes of reasoning are involved in acts of trust: this work develops theories of social capital. A recurring question in these literatures is whether a society which organizes its economic life through markets is capable of reproducing the trust on which those markets depend. In this paper, we look at these themes in relation to the writings of three eighteenth-century philosopher-economists: David Hume, Adam Smith, and Antonio Genovesi.

Controversies in economics often fizzle out unresolved. One reason is that, despite their professed empiricism, economists find it hard to agree on the interpretation of the relevant empirical evidence. In this paper I will present an example of a controversial issue first raised and then solved by recourse to laboratory experimentation. A major theme of this paper, then, concerns the methodological advantages of controlled experiments. The second theme is the nature of experimental artefacts and of the methods devised to detect them. Recent studies of experimental science have stressed that experimenters are often merely concerned about determining whether a certain phenomeonon exists or not, or whether, when, and where it can be produced, without necessarily engaging in proving or disproving any theoretical explanation of the phenomenon itself. In this paper I shall be concerned mainly with such a case, and focus on the example of preference reversals, a phenomenon whose existence was until quite recently denied by the majority of economists. Their favourite strategy consisted in trying to explain the phenomenon away as an artefact of the experimental techniques used to observe it. By controlled experimentation, as we shall see, such an interpretation has been discredited, and now preference reversals are generally accepted as real. The problem of distinguishing an artefact from a real phenomenon is related to methodological issues traditionally discussed by philosophers of science, such as the theory-ladenness of observation and Duhem's problem. Part of this paper is devoted to clarifying these two philosophical problems, and to arguing that only the latter is relevant to the case in hand. The solutions to Duhem's problem devised by economic experimentalists will be presented and discussed. I shall show that they belong in two broad categories: independent tests of new predictions derived from the competing hypotheses at stake, and ‘no-miracle arguments’ from different experimental techniques delivering converging results despite their being theoretically independent.

The most influential egalitarian perspective is undoubtedly Rawls's (1971, 1993), which assigns absolute priority to the least advantaged in society (the difference principle). However, many have claimed that even though an egalitarian perspective should imply some priority to the worst off, the Rawlsian perspective is too demanding. One response to this criticism is to argue in favour of an egalitarian perspective that never assigns absolute priority to the worse off, but which still includes limited priority to those members of society in distributive conflicts. A different response to the demandingness criticism is to agree that the worse off should not always be given absolute priority, but to argue that there are some cases where they should be. In this paper, we elaborate on this view, and look at the possibility of deviating from the leximin approach within this category of egalitarian principles.

A generation of social theorists have argued that if free-rider considerations show that certain collective action predicaments are unresolvable under individual, rational choice – unresolvable under an arrangement where each is free to pursue their own relative advantage – then those considerations will equally show that the predicaments cannot be resolved by recourse to norms (Buchanan, 1975, p. 132; Heath, 1976, p. 30; Sober and Wilson, 1998, 156ff; Taylor, 1987, p. 144). If free-rider considerations explain why people do not spontaneously keep the streets clean, though they would each prefer unlittered streets, then those considerations will also explain why there is no effective norm against littering the streets.

A search is under way for a theory that can accommodate our intuitions in population axiology. The object of this search has proved elusive. This is not surprising since, as we shall see, any welfarist axiology that satisfies three reasonable conditions implies at least one of three counter-intuitive conclusions. I shall start by pointing out the failures in three recent attempts to construct an acceptable population axiology. I shall then present an impossibility theorem and conclude with a short discussion of how it might be extended to pluralist axiologies, that is, axiologies that take more values than welfare into account.

Backwards induction is an intriguing form of argument. It is used in a number of different contexts. One of these is the surprise exam paradox. Another is game theory. But its use is problematic, at least sometimes. The purpose of this paper is to determine what, exactly, backwards induction is, and hence to evaluate it. Let us start by rehearsing informally some of its problematic applications.

The notion of ‘revealed preference’ is unclear and should be abandoned. Defenders of the theory of revealed preference have misinterpreted legitimate concerns about the testability of economics as the demand that economists eschew reference to (unobservable) subjective states. As attempts to apply revealed-preference theory to game theory illustrate with particular vividness, this demand is mistaken.

It seems plausible, even truistic, that when an agent is faced with the choice of giving up one belief or another, the decision should be based on the relative strengths of these beliefs along some dimension of doxastic merit. This said, however, two non-trivial questions arise:

(1) Which dimension?

(2) How should the contraction outcome be affected by the distribution of beliefs along this dimension?

Many criticisms have been made of optimization theory (Laville, 1999a). These objections may be explained by the fact that human rationality is bounded – that decisions are constrained by cognitive limitations (Simon, 1982). In the present paper, I will show that if rationality is bounded, then we must study the processes of decision. My thesis is that cognitive limitations lead to procedural rationality. Although this assertion has already been sustained implicitly by Simon (1959) and explicitly by Mongin (1986), it has not been argued in sufficient depth.

Individuals often seem to misjudge their own interests. One reason is inadequate information. Other reasons are failures of reasoning and volition. These reasons have all been construed as paternalist motives for the state to intervene. But in a recent article in this journal, New (1999), criticizes earlier accounts of paternalism. He argues that imperfect information constitutes a standard form of market failure, and consequently policies that respond to it do not require a paternalist motivation. The purpose of this note is to evaluate New's claim.

In a contribution to this journal Amos Witzum has challenged a common interpretation of Adam Smith's theory of justice, according to which Smith ‘employed a concept of justice – in the tradition of natural laws theories – whereby rights are related to guarding what is one's own rather than to what is one's due’ (Witzum, 1997, p. 242). Witzum claims that not only does Smith's conception of justice include one's due, and hence, distributional considerations, but the right to one's own ‘stems from the right to what is one's due’ (p. 244). Furthermore, he asserts that ‘as all members of society own their natural faculties, which presumably were given to them to enable them to survive, the fruits of their labour up to subsistence level belong to them by virtue of their ownership of their own faculties’ (p. 259). This leads him to the conclusion that property acquisition gives rise to a duty, on the part of property holders, to ‘distribute subsistence’ and that when wages fall below the subsistence level, the rights of workers have been violated ‘in exactly the same sense that taking an acquired asset away from its owner constitutes a violation of justice’ (p. 244).

Bill New's (1999) thoughtful paper has performed the valuable service of clarifying the meaning and the policy implications of paternalism. His careful formulation delimits the domain of justified state paternalism. Having argued successfully, in our view, for a narrow ambit, New proceeds to identify situations that justify paternalism. This comment is written in the spirit of a friendly reformulation that refines and improves the specification of when paternalism is justified. Our argument is two-fold. First, we argue that New's formulation, properly understood, will not readily permit the paternalistic interventions he argues are justified. Second, we identify a class of potentially justified interventions that have paternalistic aspects, but which are neither strictly paternalistic nor market-failure remedies.