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Hume's law or Hume's guillotine [1] is the thesis that an ethical or judgmental conclusion cannot be inferred from purely descriptive factual statements. [ 2 ] A similar view is defended by G. E. Moore 's open-question argument , intended to refute any identification of moral properties with natural properties , which is asserted by ethical ...
The price–specie flow mechanism is a model developed by Scottish economist David Hume (1711–1776) to illustrate how trade imbalances can self-correct and adjust under the gold standard. Hume expounded his argument in Of the Balance of Trade , which he wrote to counter the Mercantilist idea that a nation should strive for a positive balance ...
The fallacy of composition is an informal fallacy that arises when one infers that something is true of the whole from the fact that it is true of some part of the whole. A trivial example might be: "This tire is made of rubber; therefore, the vehicle of which it is a part is also made of rubber."
Hume starts out with an important point that touches upon a key fact of economics that many fail to recognize even in the 21st century: allowing the sale or export of a good actually increases its production. Economic activity in trade is not a fixed-slice pie but one in which freedom to trade can create more, rather than less:
Causation in economics has a long history with Adam Smith explicitly acknowledging its importance via his (1776) An Inquiry into the Nature and Causes of the Wealth of Nations and David Hume (1739, 1742, 1777) and John Stuart Mill (1848) both offering important contributions with more philosophical discussions.
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The paradox of thrift is an example of the fallacy of composition, the idea that what is true of the parts must always be true of the whole. The narrow claim transparently contradicts the fallacy, and the broad one does so by implication, because while individual thrift is generally averred to be good for the individual, the paradox of thrift ...
The fact–value distinction is also closely related to the moralistic fallacy, an invalid inference of factual conclusions from purely evaluative premises. For example, an invalid inference "Because everybody ought to be equal, there are no innate genetic differences between people" is an instance of the moralistic fallacy.