Theoretical and ethical reductionism and the neglect of subjectivity in economics and economic education

Abstract

The dominant ethical stance in economic analysis, especially in microeconomics, is grounded on a reduction of human behaviour to utility maximisation. We explore the concept of utility which is central to economic analysis, and investigate the significant semantic shift that it has undergone from the “old” to the modern “Max U” approach. It is shown that both the “old” and “new” concept of utility are reductionist, with the modern version being a more radical reductionism. The latter has replaced truth with the useful (i.e., utility maximisation), forgetting the theoretical philosophical dimension of ethics, and replaced subjectivity with individuals’ preferences. Against this, in this chapter, a theoretical philosophical perspective on economics is adopted that permits the recovery of intentional, goal-oriented behaviour and its representation in economic theory.