Causal Realism

This paper is an attempt to systematize the methodological insights and contributions of the Austrian School of Economics and present them in their most up-to-date elaboration, thereby building on the earlier literature on the subject. It aims to improve on the publications listed above in two aspects. First, it takes into account the most recent conceptual developments that address some of the common misunderstandings of the Austrian methodological position, as well as some of its more insightful contemporary criticisms. Second, it organizes the presentation of the relevant material around several clearly specified methodological dimensions, while, in contrast to most of the abovementioned literature, keeping the description of the historical background behind the development of the Austrian method to an absolute minimum, as well as leaving out the non-methodological differences between the ASE and its intellectual rivals, thus aiming to make the presentation in question maximally focused and thematically unified.

The theory of costs is a cornerstone of economic thinking, and figures crucially in the study of human action and society. From the first day of a principles-level course to the most advanced academic literature, costs play a vital role in virtually all behaviors and economic outcomes. How we make choices, why we trade, and how we build institutions and social orders are all problems that can be explained in light of the costs we face.

This volume explores, develops, and critiques the rich literature on costs, examining some of the many ways cost remains relevant in economic theory and practice. The book especially studies costs from the perspective of the Austrian or “causal-realist” approach to economics. The chapters integrate the history of economic thought with contemporary research, finding valuable crossroads
between numerous traditions in economics. They examine the role of costs in theories of choice and opportunity costs; demand and income effects; production and distribution; risk and interest rates; uncertainty and production; monopsony; Post-Keynesianism; transaction costs; socialism and management; and social entrepreneurship.

Together, these papers represent an update and restatement of a central element in the economic way of thinking. Each chapter reveals how the Austrian, causal-realist approach to costs can be used to solve an important problem or debate in economics. These chapters are not only useful for students learning these concepts for the first time: they are also valuable for researchers seeking to understand the unique Austrian perspective and those who want to apply it to new problems.

This book critically examines the recent discussions of powers and powers-based accounts of causation. The author then develops an original view of powers-based causation that aims to be compatible with the theories and findings of natural science. Recently, there has been a dramatic revival of realist approaches to properties and causation, which focus on the relevance of Aristotelian metaphysics and the notion of powers for a scientifically informed view of causation. In this book, R.D. Ingthorsson argues that one central feature of powers-based accounts of causation is arguably incompatible with what is today recognized as fact in the sciences, notably that all interactions are thoroughly reciprocal. Ingthorsson's powerful particulars view of powers-based causation accommodates for the reciprocity of interactions. It also draws out the consequences of that view for issue of causal necessity and offers a way to understand the constitution and persistence of compound objects as causal phenomena. Furthermore, Ingthorsson argues that compound entities, so understood, are just as much processes as they are substances. A Powerful Particulars View of Causation will be of great interest to scholars and advanced students working in metaphysics, philosophy of science, and neo-Aristotelian philosophy, while also being accessible for a general audience.

Mario Bunge's Causality and Modern Science is arguably one of the best treatments of the causal realist tradition ever to have been written, one that defends the place of causality as a category in the conceptual framework of modern science. And yet in the current revival of causal realism in contemporary metaphysics, there is very little awareness of Bunge's work. This paper seeks to remedy this, by highlighting one particular criticism Bunge levels at the Aristotelian view of causation and illustrating its relevance for contemporary powers-based accounts. Roughly, the Aristotelian view depicts interactions between objects as involving a unidirectional exertion of influence of one object upon another. This idea of unidirectional action is central to the Aristotelian distinction between active and passive powers, and its corresponding distinction between active and passive objects. As Bunge points out, modern physics does not recognise the existence of any unidirectional actions at all; all influence comes in the form of reciprocal action, or interaction. If this is right, all notions deriving from or influenced by the idea of unidirectional actions-such as the concept of mutual manifestation and reciprocal disposition partners-risk being false by the same measure. Bunge drew the conclusion that the Aristotelian view is ontologically inadequate, but still advocated its use as the most useful approximation available in science. He considered, but ultimately rejected the possibility of a modified view of causation built on reciprocal action, because, in his view, it couldn't account for the productivity of causation. Bunge's critique of this particular aspect of the Aristotelian view cannot be overlooked in contemporary metaphysics, but it is possible to construe a modified view of causation that takes the reciprocity of interactions seriously without loss of productivity.

In the 20th century, philosophy has favoured the neo-Humean view that there are no substantial connections in nature. The 21st century has seen a revival of causal realism and opposition to neo-Humeanism. This book is a constructively critical discussion of the realist revival. It is critical because it aims to show (i) that contemporary realists often inadvertently incorporate into their accounts of causation certain ideas that really belong to the neo-Humean framework they object to, (ii) that the incorporation of these neo-Humean ideas are an obstacle to the further development of causal realism, and (iii) that some of the Aristotelian components that causal realists are seeking to revive are arguably incompatible with the theories and findings of modern science; in other words, they are falsified by science. The book is constructive in that it suggests a way to avoid the fallacies involved in (i)–(iii) to arrive at a modified powerful particulars view that is compatible with modern science. In this chapter the author briefly sets the stage for the discussion, introducing the relevant competing views and central concepts.

Proponents of powers disagree on whether to accept or reject the categorical/dispositional distinction, i.e. the idea that our conception of powers is conceptually incompatible with our conception of quality. Here it is argued that the categorical/dispositional distinction has its roots in the modern analytic view of properties which belongs to the neo-Humean framework. Its allure for contemporary realists is based on (i) misguided epistemological concerns, (i) on the mistaken view that it originates in Locke, and (iii) that Hume’s argument against necessary connections is somehow relevant for realist conceptions of properties. It is shown that the distinction is not present in Locke—he in fact saw properties as both qualities and powers—and that Hume’s argument about necessary connections is just as irrelevant for the contemporary realist debate about properties as for the debate about causal necessity. Finally, building on Locke’s view, a way of thinking of fundamental properties is presented, as primitive natures that we can only understand in virtue of what they do but which we should not think of as being ontologically constituted by these doings. According to this view, properties are both qualities and powers. Open Access: https://www.taylorfrancis.com/chapters/powers-ingthorsson/10.4324/9781003094241-9

Os movimentos sociais configuram um tema clássico de discussão nas ciências sociais. Entretanto, boa parte da literatura dá maior ênfase à análise dos elementos “materiais” da mobilização ou os analisa separadamente de seus elementos “simbólicos”, não raro dando menor ênfase a estes. Quando a análise das duas dimensões se faz presente, é comum a apresentação de descrições importantes sobre a história e características dos movimentos sociais, mas com pouca atenção aos elementos explicativos de como a mobilização e a organização se estruturam. Com o objetivo de realizar uma pesquisa cujo foco esteja nas causas da sustentação e ampliação da mobilização, valemo-nos do conceito de mudança de escala para explorar o que aqui denominamos expansão organizativa e amplificação simbólica como mecanismos causais que possibilitam a um movimento social sustentar-se e ampliar sua mobilização. Para tanto, foi realizada uma pesquisa sobre a mudança de escala na mobilização dos atingidos por barragens na bacia do rio Uruguai, que culminou na fundação do Movimento dos Atingidos por Barragens (MAB). Ancorada na noção de causalidade preconizada pelo realismo crítico, procuramos responder à seguinte questão de pesquisa: como se dá a transformação de um determinado movimento social envolvido em conflitos pontuais em um ator de maior alcance, imbuído de objetivos, pautas e bandeiras políticas diversas? Para tanto, exploramos os mecanismos da expansão organizacional e, sobretudo, da amplificação simbólica para explicar como os atingidos por barragens enquadram o problema social que os atinge e produzem sensos de justiça e justificações para sua mobilização.
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The social movements are a classic debate in the field of social sciences. However, much of its literature places greater emphasis on the analysis of “material” elements of the mobilization or instead analyze its “symbolic” elements separately, not infrequently conceding only minor emphasis to the latter. When the analysis of both dimensions takes place, we usualy have the rendition of relevant descriptions on the history and characteristics of the social movements, nevertheless with scarce consideration to the explicative elements on how the mobilization and the organization are structured. Aiming to conduct research which focuses ont he causes of the sustaining and enlargement of the mobilization, we had recourse to the concept of scale shift to explore what we name organizational expansion and symbolic amplification as a causal mechanism swhich enables a social movement to sustain itself and to enlarge its mobilization. To do so, we carried out a research study on the scale shift in the mobilization of the population affected by dams on the Uruguay River basin its expansion on the founding of the Movimento dos atingidos por Barragens – MAB – (Movement of People Affected by Dams). Anchored in the notion of causality professed by critical realism, we sought to answer the following research question: how does a given social movement concerned with specific conflicts transforms itself into a player of greater reach, imbued with dissimilar objectives, agendas and policies? Therefore, we inquired into the mechanisms of the organizational expansion and especially of the symbolic amplification to explain how those affected by dams frame the social problem that impacts them and develop senses of justice and justifications for their mobilization.

Substance and process ontologies are typically construed as complete opposites. In this chapter it is argued that contemporary process ontologists are primarily in opposition to what is identified as the modern analytic view of substance, which is the brain-child of the neo-Humean framework, but not obviously in opposition to the Aristotelian view of substance. It is argued that a process ontology that frames itself in perfect opposition to the Aristotelian view, in particular by denying any common constituent that underlies the distinct stages of a process, is one that can only make sense of change either as variation between temporal parts, the view taken by neo-Humean substance ontologists, or in terms of absolute becoming; which is a becoming that violates the idea that everything has a natural origin. Finally, it is argued that the author’s account of compound entities as unities of interacting parts represents such compound objects as entities for which change is essential for their continued existence, and that they are therefore processes while still being substances in the way dictated by the Aristotelian tradition.

Causal realism, the author argues, is not merely a commitment to the reality of causal connections but also an attempt to explain the nature of such connections. Not all realists appeal to powers in trying to explain causation, but instead to notions such as causal processes, transmission of conserved quantities, and mechanisms. These accounts, it is argued, fail to explain causation because they implicitly endorse neo-Humean strictures about sticking to observable correlates. Some powers-based approaches also fail to explain, because they too implicitly endorse some neo-Humean ideas, such as the dispositional analysis of powers, and the two-place relation model of causal connections. Accounts that reject the dispositional analysis and two-place relation model represent a return to what used to be the standard view of causation prior to the rise of empiricism, notably that causation is the production of changes brought about by the interaction of powerful particulars. There used to be a general agreement about this general idea across the range of different philosophical schools of thought, from Aristotle and well into the Early Modern period. It is argued that this is the most promising form of causal realism. Open Access: https://www.taylorfrancis.com/chapters/causal-realism-ingthorsson/10.4324/9781003094241-4

Most powers-based accounts assume, in accordance with the standard view, that interactions are unidirectional; one object acts while another passively receives the influence. This assumption arguably contradicts the theories and findings of natural science, which take it to be established that unidirectional actions do not exist. They insist that every interaction is perfectly reciprocal; all interacting entities simultaneously act on each other, to the same magnitude, and in the same way. The author shows how the standard view can be modified to accommodate the reciprocity of interactions. The modification requires that we neither treat the action of one, or any other object, as a cause, but only the interaction as a whole. Also, that we treat the sum total of changes produced in all the things involved as the effect. This allows a perfectly intelligible analysis of the idea that cause and effect are simultaneous, and a novel analysis of the generic connection between cause and effect: the effect is made out of the same entities that were involved in its production. That is, it is argued that the most fundamental feature of causation is reciprocal action, or interaction as this is defined by the natural sciences. Open Access: https://www.taylorfrancis.com/chapters/causal-production-ingthorsson/10.4324/9781003094241-5

This chapter introduces a distinction between philosophical attempts to characterise vs. explain a phenomenon and argues that powers-based accounts of causation are best understood as attempts to explain, while neo-Humean accounts can only hope to characterise causation. As a consequence, it is argued, powers-based accounts need not be understood as rivals to neo-Humean approaches. The explanation that powers-based approaches offer entails that causation appears to us in the way that neo-Humean approaches characterise causation. Neo-Humean accounts are only contrary to powers-based accounts when seen as committing to the basic tenet of neo-Humean metaphysics, notably that there are no substantial connections in nature. However, it is not obvious that everyone that endorses neo-Humean accounts of causation also commits to the ontology of neo-Humean metaphysics. Download link: https://www.taylorfrancis.com/chapters/powers-based-vs-neo-humean-approaches-ingthorsson/10.4324/9781003094241-3

The aim of the present paper is to investigate the logical relationship between the prevalence of specific macroeconomic theories and the ethical quality of practices that take place in the financial markets. The main thesis presented herein is that viewing the financial markets through an appropriate economic framework is a crucial prerequisite of maintaining their ethical foundations and harnessing their ethical potential. Three competing macroeconomic visions-the "animal spirits" theory, the efficient market hypothesis, and the causal-realist market process approach are assessed with respect to their logically deducible effects on the ethical thinking of financial operators. The main conclusion of the paper is that the causal-realist approach provides the most satisfactory account of the inherent conceptual nature of financial markets, thereby furnishing the best guidance for the development of appropriate professional virtues by their key members.

In my talk, I will critically assess four theses (or sentiments) that are widely accepted in the philosophical community: (1) There are many and mutually incompatible views of causation (2) Causation is at rock bottom a relation between temporally distinct entities (3) Causes act on their effects (4) The case against the necessity of causal connections is overwhelming Theses (2), (3), and (4) have their origins in the empiricist tradition, but have now become part and parcel of philosophical though in general; even causal realists tend to accept them, and this is why (1) is also accepted. It is of course particularly worrying that causal realists accept them, because their acceptance hampers progress of so-called powers-based accounts of causation (attempts to revive the Aristotelian view of causation). Indeed, my argument primarily addresses those who profess to be causal realists, but do not realise that they have unknowingly accepted elements of the empiricist view in their view of causation. Nevertheless, some of what I say has implications for the Humean as well. For instance, the idea that the case against the necessity of causal connections is strong, is often taken to be a reason to adopt Humeanism. I will demonstrate that most of the arguments in favour of (4) do not really address any view that has seriously endorsed causal necessity, except those that already incorporate the dogmas that belong to the empiricist conception (in particular (2) and (3)). It should be noted that my argument does not address those who assume that causal necessity must conform to the broader notion of 'true in all possible worlds', but this is not assumed either in the arguments that profess to show that causation isn't necessary. As for the other dogmas, then with respect to (1) I will argue that (i) the Aristotelian view of causation is the only view that attempts to explain what causation is, as opposed to merely describe certain salient features of how causation appears to us, and (ii) it logically entails that the world exhibits all the salient features that other views appeal to in their description of causation. That is, if the world is Aristotelian, then it will exhibit the kind of regularity that regularity accounts talk about (albeit of the conditional kind, i.e. 'if C in S, then E'), effects will be counterfactually dependent on their causes, and intervention/manipulation will be a great method to identify causal connections. On the other hand, if the Aristotelian view is assumed to be false, it follows that the world will fail to exhibit regularity (even of the conditional kind), effects will not be counterfactually dependent on their causes, and intervention will be an unreliable method to identify causal connections. I will finish by pointing out that the only explanatory view around—Aristotelianism —does not represent causation as a mere two-place relation, nor does it depict causes as acting on their effects; it represents the relation between cause and effect as itself a product of something more fundamental, an interaction between powerful particulars. The Aristotelian view claims that the particulars involved in the cause act on each other and thus bring the effect into existence. In fact, one can wonder where the idea comes from that causes act on