Tuesday, October 06, 2009

The Metaphysics of Money

Been thinking about money. Sciences describe the behavior of observable systems. In physics, there are empirical terms that are directly measurable, things like mass and distance. We know that these things are real as far as we can know that anything is real. Then there are theoretical terms, things like gravitational potentials and field values, parts of the theories that we use to connect observable results to each other in a way that explains and predicts. The metaphysical status of these objects is a matter of philosophical conversation. Realists argue that the more and more surprising the predictions, the more simple, wide-ranging, and unified the explanations, the more likely it is that these theoretical terms describe part of the furniture of the universe. Instrumentalists argue that all that is real is what is measurable and the theoretical terms are simply useful tools in coordinating those observable quantities.

But what about economics? What are the observables? Price? If we picked some random class of objects and for no good reason all decided that something they were worth absurd amounts of money, then it would be, right? (See babies, beanie) But at the same time, they do have real consequences, for example, whether someone can retire or buy a house. How do we make sense of the basic notions of economics? Do they describe something real? If so, what? If not, what is it the science of?