It Isn’t Bad to Have Limits, as Long as You Know Them: What the Aristotelian Tradition can Offer Economics
Abstract: Economics can learn much about its limits from the Aristotelian tradition, which describes aspects of choice behavior which cannot be precisely modeled. This article argues through three propositions that economists cannot understand the limits of their modeling approach for normative work unless they engage with more comprehensive accounts of human decision making, like the account offered in the Aristotelian tradition. An awareness of the limits of economic modelling can have two desirable effects: it can bring some clarity to the confusion of terms which plagues discussion between economists and non-economists, and encourage economists to advocate more effectively for those insights of their models which are least dependent on unrealistic assumptions.
JEL Codes: B4, A11, D63