Foundational epistemologies in consumption theory (Amsterdam

359 Pages·2010·1.8 MB·English

FOUNDATIONAL EPISTEMOLOGIES IN
CONSUMPTION THEORY
Alan Storkey
© Alan Storkey page 1
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© Alan Storkey, London, 1993
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Alan Storkey ©2010
© Alan Storkey page 2
VRIJE UNIVERSITEIT TE AMSTERDAM
FOUNDATIONAL EPISTEMOLOGIES IN CONSUMPTION THEORY
ACADEMISCH PROEFSCHRIFT
ter verkrijging van de graad van doctor aan
de Vrije Universiteit te Amsterdam,
op gezag van de rector magnificus
dr. C. Datema,
hoogleraar aan de faculteit der letteren,
in het openbaar te verdedigen
ten overstaan van de promotiecommissie
van de faculteit der sociaal-culturele
Wetenschappen
op woensdag 17 november 1993 te 15.30 uur
in het hoofgebouw van de universiteit, De Boelaan 1105
door
Alan James Storkey
geboren te London
© Alan Storkey page 3
Promotoren: prof. dr. B Goudzwaard
prof. dr. S Griffioen
prof. dr. B Kee
Referent: prof. dr. D Th Kuiper
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Preface and Acknowledgements
The genesis of this study was a period in 1966-7 when I was especially involved in
epistemological issues, partly through attending seminars run by Popper, Lakatos
and Winch and partly through discussions with Elaine on her work on Wittgenstein.
One of the outcomes was a long paper on the different epistemologies embodied in
the various movements of modern art circulated by Hans Rookmaaker. Elaine and I
then continued to work through a variety of epistemological issues in relation to
British and Dutch Christian philosophy, and to develop a Christian evaluation of
theories of knowledge used in the social sciences. In the 1970s, partly in relation to
Tony Cramp's pathbreaking Cambridge lectures, it was articulated into a critique of
some of the trends in economic and sociological thinking, expressed in embryo in
chapter 3 of A Christian Social Perspective. This emerged as part of the background
critique developed with the Calvin College Centre team of George Monsma, John
Tiemstra, Karl Sinke and Fred Graham in 1980/1, and it was during this time that
the ideas began to be shared with Bob Goudzwaard, whose thinking has deepened
and opened the perspective considerably. At the end of that year Bob offered to
supervise the study. The focus on consumption theory grew out of an interest at
Cambridge, a later focus on the sociology of the family and the institutional
reformulation which is present in the Calvin College team's Reforming Economics.
The study has developed over the last decade in work with Bob Goudzwaard, and
also with Sander Griffioen and Bas Kee, who have also contributed much to its
formulation. Although post-modernism has been slower emerging in economics, it is
now beginning to be clear how deep the critical reflection will need to be, and this
study is offered as part of that process.
Thanks for many of the resources of this study are due especially to the following
libraries and those who work within them: Sheffield University, Calvin College,
Gordon College, Oak Hill College, and especially the British Library of Political and
Economic Science at the LSE and Cambridge University Library.
The privilege of working with Bob Goudzwaard, Sander Griffioen and Bas Kee on
this topic goes far beyond the scope of the actual work itself and I thank them for
what they have shared, for their insights, scholarship and friendship. I am also
grateful to those mentioned earlier and to many others for discussions and insights,
and to Calvin College and Oak Hill College for research time.
Finally, I give intimate thanks to my Father and Mother for long term
encouragement, to Amos, Matthew and Caleb for the willingness to discuss issues
and provide technical support, to Elaine for her love, faith, thought and commitment
to this endeavour, and centrally to God as the source of knowledge, contaminated
though it is by our weaknesses.
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Contents
Preface and Acknowledgements.............................................................................................5
Introduction.............................................................................................................................8
Chapter one: Foundationalism and Consumption Theory.....................................................12
Theory as a Path.................................................................................................................. 12
The Public Affairs Economists.............................................................................................. 21
The Search for Academic Recognition..................................................................................23
Locating the Problems of Knowledge................................................................................... 30
The Failure of Foundationalism............................................................................................ 44
Introduction...........................................................................................................................64
Rationalism as a Foundational Epistemology....................................................................... 66
Its Origins and Development................................................................................................ 97
Subjective Kantianism........................................................................................................ 125
Chapter three: Positivism and Consumption Theory...........................................................144
Introduction and Background..............................................................................................144
Attempts at the Foundation.................................................................................................151
Logic and Positivism...........................................................................................................170
Popper and the Break with Inductivism...............................................................................178
Probable Certainty..............................................................................................................187
Background........................................................................................................................ 198
The Epistemological Base.................................................................................................. 202
The Cambridge School.......................................................................................................207
Mill and the Foundation of Causal Epistemology.å............................................................. 210
Mill's Epistemology in Economics and Consumption Theory...............................................213
Marshall's Consumption Theory..........................................................................................221
Behaviourism......................................................................................................................240
Consumer Behaviourism.................................................................................................... 246
Review of Foundationalism.................................................................................................256
A Christian Diagnosis of Foundationalism.......................................................................... 262
Bibliographies.....................................................................................................................314
Index.................................................................................................................................. 349
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Introduction
This study has a shape which is unusual, and it is good at the beginning to share a
strategic view of its scope and intentions. The subject matter is consumption theory
as it has developed in economics from the 1870s to recent times, what could be
called 'modern consumption theory'. The focus of the study is on the
epistemological construction of that theory, and as such forms part of the growing
interest in the philosophy of economic science which has been fostered by
Hutchinson, Blaug, Caldwell, Carabelli and others. It carries the concerns of these
theorists further by articulating the epistemological issues in relation not to a single
theorist or period but to a subdiscipline of economics. It also has something in
common with post-modernist critiques in bringing into question long-term orthodox
constructs which have had authority in areas of academic study. The central thesis
is that much of consumption theory has been definitively shaped by a drive to
establish epistemological security, what is here called a 'foundational' drive, which
has distorted its development. As a result the basis of this subdiscipline is suspect
in a way which damages its ability to address the issues of consumption which are
thrown up by the domain of study. However, the aim of the critique is to open up the
possibility of a reconstituted view of consumption theory itself, and this is the
intention especially of the last chapter. Such an initial terse account needs to be
filled out by a more discursive narrative of the book.
The first chapter sets the scene by reinterpreting the dominant way of seeing the
growth of modern economic theory, that is as a progressive refinement of scientific
knowledge. This view, assumed by Schumpeter, Samuelson and many others fails
to allow the possibility that the discipline has, in part, been developing on the basis
of progressively compounded errors. To investigate this possibility the study steps
back into the era of classical economics and identifies a series of problems which
theorists of the time faced which added up to a crisis for economics threatening its
very existence as a discipline. The response to this first crisis, it is suggested, was
to develop a conception of economic science which would allow the discipline to
survive in the academic climate of its day. This involved establishing some kind of
unassailable authority for the theory advanced as knowledge. The early neo-
classical theorists tried to do this by adopting foundational theories of knowledge
which would guarantee the validity of the theory they developed. These foundational
positions have become the dominant orthodoxies within consumption theory over
the last hundred years or so, when it has seemed as though the foundational move
was a resounding success. Actually, however, it may have been a flawed academic
response which has left the discipline, and especially consumption theory, with a
series of internal problems. These have developed into a second crisis no less
serious than the first, and like the former it has not been consciously addressed in a
systematic way. Only gradually have the underlying problems become more evident
and their Êtiology is traced in detail in chapters two, three and four.
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The first chapter, to provide a basis for telling this story, articulates in some detail
what this foundational move entailed. It was not only an economic response but
picked up on wider trends in academic culture which followed from similar crises of
belief and knowledge in other areas. The idea of 'foundationalism' needs some
clarification. It is a concept which has been employed by a number of philosophers
of science and increasingly by post-modernists with various meanings which involve
family resemblances but are not identical. The meaning employed here shows
similar concerns, but has a slightly different intent. It is used to bring together and
define what in retrospect turns out to be an astonishing modern preoccupation of
thought seeking to establish an indubitable basis for knowledge in the human
sciences. It is not limited to economics, but can also be seen as having influence in
sociology, psychology, linguistics, history, politics and other social sciences. This
study does no more than touch on these possibilities, but it does raise the likelihood
that studies in other disciplines and subdisciplines could reveal a pattern which is
similar. The first chapter identifies and defines the foundational response and
examines some of the key structural problems which follow from adopting it as a
basis for (economic) theory. The tenor of the critique of foundationalism can also be
described. It suggests that the problem in theory formation is deeper than can be
met by combining different approaches; there are certain generic problems, like the
otherworldliness of theory, methodological dogmatism, the exclusivity of data,
boundary disputes, and value-freedom which create insoluble dilemmas for the
discipline. After exploring these possibilities in principle, the first chapter finally
traces the early emergence of consumption theory in the second half of the 19th
century and suggests how it was likely to be influenced by foundationalism.
Consumption theory is perhaps a favourable case. It emerged when
foundationalism, as here described, was also taking shape, and its whole career
has therefore been shaped within this kind of search for economic knowledge. In
other areas of economics like production theory or international trade the effect
might have been less decisive because of the earlier crystallisation of theoretical
issues. To some extent this study remains agnostic about the weight of the influence
of foundationalism in other disciplines, in wider economic theory and even in
consumption theory. By focussing on the developments in consumption theory
which are more obviously foundational, it tends to give less substantive treatment to
other streams of thought which are not epistemologically based. In so doing it
"conforms" to orthodoxy while offering a critique of it. Post-Keynesians and others
have sought to study an alternative tradition of theorists who have different
perspectives to offer. This task is not undertaken here; the emphasis is rather on
uncovering the fundamental epistemological mistakes to see what can be learned
through them. Although they may be particularly relevant to consumption theory,
others working in the epistemology of economics are convinced that the extent to
which theories of knowledge have shaped the development of the discipline is still
widely underestimated. (Carabelli 1988 1-13) This study merely suggests
foundational theories have had a debilitating effect on consumption theory, but the
© Alan Storkey page 9
ramifications may be much wider.
The foundational move did not, however, result in one pattern of theoretical
development. There were actually a variety of responses which theorists believed
provided an infallible foundation for knowledge, and the next three chapters look at
the main traditions exemplifying these responses - rationalism, positivism and
causal-behavioural views of knowledge. Throughout each of these chapters a
particular argument is mounted. The need for epistemological certainty is seen as
pushing theorists to pursue their kind of foundationalism, often drawing on
philosophers or philosophers of science who were available in their academic
culture. This in turn shaped the kind of theory seen as necessary and valid, and
each of these views of theory was then held dogmatically over against the other
kinds which were also around. Thus, a picture emerges of a subdiscipline which
fractured into more and more theoretical empires, each of which owed allegiance to
its own foundation. Yet because the fundamental epistemological dogmatism of
each of these positions was not recognized or admitted, the possibility of
meaningful debate among consumption theorists was continually curtailed.
Evidence is presented not just of noncomprehension across major epistemological
traditions, but also between methodologies which seemed to be close neighbours.
However, the concern is not only the fragmentation of theoretical debate, but also
the impoverished ability of foundationally-based theory to address its subject matter.
Each prescribed theory excluded evidence, subject matter, modes of arguing and
public issues and thereby reduced its kind of theory to a form which was empty of
much significant content. The theory embodied its foundational weaknesses. Each
of the positions, because it was self-referencing, cut itself off from a full engagement
with the subject matter and even distorted the issues on which it did focus. The
picture emerges, therefore, of a subdiscipline which has lost its usefulness. Indeed,
within the literature we face a sharp fall off in relevant work alongside an expansion
in the significance of consumption in economic life. It is, for example, astonishing
that only 0.5% of members of the American Economic Association rate consumption
theory as a major area of specialisation. (AER Dec 1989 573-5) Yet the analysis of
these chapters is not all critique, for the detailed examination of particular theorists
and positions allows a map to be drawn of some of the unaddressed areas and
ignored modes of theorizing which can be developed in the final chapter. These are
also available from some of the theories and traditions which have stayed outside a
foundational approach. Thus, the analysis suggests, in varying degrees, that a
radical deconstruction of consumption theory is needed, and in the final chapter a
reconstruction is attempted using the insights gathered from the previous analysis.
This final chapter makes more explicit a christian critique of the idea of autonomous
theoretical knowledge and shows a way of reintegrating theory with the wider issues
of consumption. It picks up on some of the post-modernist consumption theorists to
construct a different map of the domain and uses an alternative theory of knowledge
to develop new ways of understanding. It acknowledges important contributions
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