My doctorate thesis investigates a particularly controversial issue in both philosophy of economics and philosophy of mind, namely, the problem of interpersonal utility comparisons (IUCs henceforth). As I take utility to be a numerical representation of the intensity of individual preferences, IUCs are judgments about how different people's preferences compare in terms of strength. As factual judgments, IUCs appear to be either underdetermined by the empirical evidence or indeterminate. This casts doubt on whether or not we can have (scientific) knowledge of, or, at least, (scientifically) justified beliefs about, how different people's preferences compare in terms of strength. In general, IUCs can be justified if the assumption of interpersonal similarity, in one of its forms, can be vindicated. I consider two strategies, which attempt to vindicate this assumption by means of, respectively, an inference to the best explanation type of argument and a nativist argument. I argue that both strategies fail. These results suggest that preferences may be interpersonally incomparable with respect to the dimension of strength. I consider four 'possibility' arguments addressing this challenge. I argue that, although some of them may solve the conceptual problem concerning the interpersonal comparability of preference strengths, they all fail to solve the epistemological problem of IUCs. Nevertheless, I argue that a 'modest' transcendental argument shows that IUCs can, at least, be justified, provided that we embrace a coherentist view about the structure of epistemic justification.

This work examines some of the effects that developments in economic theory might have had on concepts of economic justice that are associated with it. Classical economics, as represented by Adam Smith and J.S. Mill is a good example of models of general equilibrium where moral responsibility cannot be evaded. Indeed, in the ethical analysis of these models- conducted by the same people who suggested them- the role of desert was prominent. Contrary to the general belief that classical economists advocated natural liberty for its moral goodness as much as for its economic efficiency, analysis by desert reveals a serious moral inadequacy of natural liberty. This, in turn, may explain the discrepancy between the received view and the fact that the works of classical economists are sometimes full with moral apprehensions about natural liberty. To reach such conclusions there is a need to re-interpret the works of Smith and Mill at both levels of economics and ethics. The bulk of this work is devoted to that purpose. A new interpretation of Smith's ethics is being offered. It is based on the consistency of human character and on the existence of some 'rationalistic' considerations in his work. Such an interpretation offers an alternative (and more comprehensive) solution to what became to be known as the Adam Smith's problem (old and new). Also, the application of his moral theory to the analysis of actions implies that a correlation must exist between intention and consequences. Thus the moral significance of the proposed spill-over of beneficence derived from the 'invisible hand' mechanism, is questioned. A new interpretation of Smith's economic follows where 'pre-market demand' relates the capitalists' decisions on saving to equilibrium prices. A distinction that has a moral significance is then being drawn between 'market-price' and 'natural price'. The study of Mill's methodology serves as a foundation to interpret some apparent contradictions in his moral theory (the relationship between Utilitarianism and Liberty). Ethology, which is the theory of character formation plays a major role in it. Coupled with Mill's theories of Free-will and Individuality, it is possible to establish a solution to the problems of Utilitarianism and Liberty without expanding the concept of utility. Similar principles are then introduced to Mill's discussion of economic justice. The principle of individuality is being presented in the form of Mill's principle of 'proportional remuneration'. A discussion of his theories of property follows and then, the question of the meaning of 'proportional remuneration' is being put forward. Before, however, an exposition of Mill's economic model in the framework of 'cost of production' general equilibrium is being offered. Then, the principle of proportional remuneration is being investigated. It is also related to a much wider question of the role and meaning of the labour theory of value in classical economics.

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The following articles submitted in partial fulfillment of the requirements for the degree of PhD by published works attempt to restate, refine and extend various themes in the tradition of the Austrian School of Economics and their relationship to selected topics in political economy. It is argued that two traditions developed out of the "marginal revolution" in economic theory, beginning in the 1870s: the Neo-Classical and Austrian approaches. In the Neo-Classical tradition, a theory of economic equilibrium is formulated on the basis of a "static" view of man and the market, in which actors are assumed to have a "given" ends-means framework in which agents narrowly maximize to attain "optimal" results within their respective decisions and across individuals for determination of interpersonal equilibrium. The Austrians, on the other hand, developed a more dynamic process theory of market activities based on a conception of man as an intentional being who creates his ends-means framework and initiates actions to improve his circumstances. The Austrian framework emphasized the role of time, uncertainty and imperfect knowledge, with a focus on the temporal-sequence of market interactions that may tend to bring about a pattern of interpersonal coordination of individual plans. It is also explained how the Classical Economists' concept of man and the market was much closer to the Austrian perspective than to that of the Neo-Classical Economists. The Austrian approach is extended by showing a "phenomenological foundation" to Austrian Economics in the writings of Edmund Husserl and its influence on the methodological works of Ludwig von Mises. The sociological contributions of Max Weber are shown to be the starting point for Mises' theory of "action," and how Weber's conception of the Ideal Type was adopted by Mises as a tool for understanding the process of expectations-formation in the market. The writings of Austrian sociologists, Alfred Schutz, are used to explain the reasoning behind the Austrian theory of action and the mental processes through which the social actors creatively imagine what becomes the endsmeans framework, which the Neo-Classical Economists assume are "given." Schutz's refinement of Weber's Ideal Typification schema is reformulated to explain the process through which individuals in the social and market arenas construct situational and personal ideal types that create the structures of intersubjective meaning enabling expectations-formation and the potential for interpersonal plan coordination. Lastly, the Austrian theme of acting man and the market process are applied to the issues of economic calculation under socialism, problems with Neo-Classical assumptions concerning government intervention in the market economy and the limits of economic policy within the market order.

In the face of ongoing socio-economic problems such as inequality and the degradation of ecosystems, the question of the proper scope of markets remains a pressing one. Here, a theoretical framework for addressing this question is established, that is based upon a close analysis and synthesis of the contributions of the Austrian economists, Mises and Hayek. The radically pro-market conclusions of the Austrians have been strongly criticised by many writers who show them to overlook the normative significance of the problems of the market. Such critics propose that markets be limited in their scope, or possibly even replaced entirely, by non-market, political decision-making. Yet these writers tend to overlook the force of the challenge that the Austrian thesis poses to their proposals. Aside from their commitment to the normative primacy of a strictly procedural, market-orientated conceptionofliberty, the Austrian thesis shares with non-market advocates some important philosophical premises concerning the incommensurability of values and the spatio-temporal dispersion of knowledge. In the face of such complexity, the Austrians argue that the market process, by facilitating the encapsulation and discovery of knowledge, is an indispensible means of achieving coordination between individuals across society seeking to attain a plurality of different ends. The Austrian thesis offers profound insights into the epistemological challenge facing non-market, political institutions seeking to shape socio-economic outcomes. Yet the Austrian critique is directed towards a simplistic, neoclassical-inspired model of non-market decision-making. The Austrians overlook the potential for non-market processes and institutions to be designed to perform the same kind of epistemological functions as they argue can only be fulfilled by markets. Here, Austrian theory is shown to offer valuable insights for assessing the potential offered by a number of different, often recently developed, approaches in the fields of computation, planning, political theory and institutional practice. An 'immanent critique' ofthe Austrian case for markets is thus offered that draws from Austrian-inspired, theoretical insights in order to establish a framework for assessing the potential for non-market institutions to address the challenge of complexity.

In the first chapter, the structural stability of the hybrid New Keynesian Phillips Curve (NKPC) and possible changes in pricing behaviour of firms is investigated in the context of oil price shocks. Using quarterly US aggregate data, this curve is estimated in subsamples formed with oil shock dates by generalized method of moments (GMM) and continuously updated GMM (CU-GMM). The standard GMM estimates suggest that although the forward-looking behaviour is predominant in pre-oil shock period, it loses ground against backward-looking behaviour after every oil shock. The CU-GMM results confirm the structural instability of hybrid NKPC in presence of oil shocks but now forward-looking behaviour becomes more important after oil shocks. In the second chapter, the structural stability of the NKPC featuring evolving trend inflation derived by Cogley and Sbordone’s (2008) is tested by exploiting three major oil shocks and three macroeconomic regimes. This is estimated by adapting two-step procedure combining Bayesian vector autoregression with minimum distance estimation. The results suggest that when a large and persistent macroeconomic shock sets off a large and sudden increase in trend inflation, backward-looking becomes more rational. When we impose continuous evolving trend inflation across macroeconomic regimes known as Great Inflation, Great Moderation, and Great Recession, the estimates of firm pricing parameters implies a structurally stable NKPC. In the final chapter, a small open economy NKPC is derived and estimated for a developing oil-exporting economy sick with Dutch-Disease. This curve is estimated for standard closed and open economy specifications of the Iranian economy. Introducing open economy elements produces three differences in the estimation. First, the degree of price stickiness and the fraction of backward-looking firms decrease. Second, the degree of substitutability between inputs is close to unity for Iranian economy. Third, the forward-looking behaviour gains ground while the backward-looking behaviour becomes less important.

This thesis contributes to our understanding of the relationship be- tween the material activity of human labour and the monetary forms of an economy by examining the theoretical foundations of the classi- cal approach to economic analysis, in particular the objective costs-of- production approach to economic value. The classical labour theory of value suffers from two related prob- lems: David Ricardo's problem of an invariable measure of value and Karl Marx's transformation problem. This thesis proposes to resolve both problems by constructing a more general labour theory of value. The more general theory provides a new perspective on related issues in the classical theory, including Marx's classification of money-capital as an irrational commodity, the meaning and significance of Piero Sraffa's standard commodity and Luigi Pasinetti's restriction of the labour theory to a normative role. According to the classical account of capitalist competition the scram- ble for profit causes market prices to "gravitate" to natural prices. This thesis proposes a nonlinear dynamic model of classical gravitation in which prices and labour costs converge to a state of mutual consistency in equilibrium. The dynamic model, combined with a general labour theory of value, establishes a lawful relation between prices and labour costs, which reconstructs Marx's version of the classical "law of value".

The first chapter introduces the thesis and reviews the literature on loss aversion, the endowment effect and the willingness to pay/willingness to accept gap, and the effects of experience. The second chapter reports an extended version of Knetsch's exchange of goods experiment to explore how different types of experience influence the endowment effect. The experiment has four treatments, which compare the behaviour of subjects with experience of consuming, owning, and choosing goods to a control group. The results are consistent with earlier studies in that an endowment effect is observed; however, the strength of the effect is less than in earlier studies and differs between treatments. In particular, there is a significantly stronger endowment effect in the treatments in which the endowment is acquired in two steps rather than one step. The third chapter reports a repeated market experiment in which subjects buy and sell lotteries under symmetric and asymmetric information. Buying and selling bids and prices are compared. A gap between buying and selling prices decays under symmetric information but persists under asymmetric information. Furthermore, there are spillover effects. When the regime switches between symmetric and asymmetric information, subjects do not immediately adjust their behaviour. The results are interpreted as evidence that behaviour is driven by heuristics. The fourth chapter reports another repeated market experiment in which subjects buy and sell lotteries. How the lotteries’ odds are presented and whether the lottery gets resolved after each trial vary between treatments. Among the findings is that the gap between buying and selling bids decays when lotteries are not resolved each trial but persists when they are. The final chapter summarises the findings of the three experiments and identifies common patterns. Directions for future experimental and theoretical research are suggested. Finally, implications for policy are discussed.

In this thesis, we study the causal relationship between functional distribution of income and economic growth. In particular, we focus on some of the aspects that might alter the effect of the profit share on growth. After a brief introduction and literature review, the empirical contributions will be presented in Chapters 3,4 and 5. Chapter 3 analyses the effect of a contemporaneous decrease in the wage share among countries that are major trade partners. Falling wage share and wage moderation are a global phenomenon which are hardly opposed by governments. This is because lower wages are associated with lower export prices and, therefore, have a positive effect on net-exports. There is, however, a fallacy of composition problem: not all countries can improve their balance of payments contemporaneously. Studying the country members of the North America Free Trade Agreement, we find that the effect on export of a contemporaneous decrease in the wage share in Mexico, Canada and the United States, is negative in all countries. In other words, the competitive advantage that each country gains because of a reduction in its wage share (to which is associated a decrease in export prices), is offset by a contemporaneous increase in competitiveness in the other two countries. Moreover, we find that NAFTA is overall wage-led: the profit share has a negative effect on aggregate demand. Chapter 4 tests whether it is possible that the effect of the profit share on growth is different in the long run and in the short run. Following Blecker (2014) our hypothesis is that in the short run the growth regime is less wage-led than it is in the long run. The results of our empirical investigation support this hypothesis, at least for the United States over the period 1950-2014. The effect of wages on consumption increases more than proportionally compared to the effect of profits on consumption from the short to the long run. Moreover, consumer debt seem to have only a short-run effect on consumption indicating that in the long run, when debt has to be repaid, consumption depends more on the level of income and on how it is distributed. Regarding investment, the effect of capacity utilization is always larger than the effect of the profit share and that the difference between the two effects is higher in the long run than in the short run. This confirms the hypothesis that in the long run, unless there is an increase in demand, it is likely that firms are not going to increase investments even in the presence of high profits. In addition, the rentier share of profits – that comprises dividends and interest payments – has a long-run negative effect on investment. In the long run rentiers divert firms’ profits from investment and, therefore, it weakens the effect of profits on investment. Finally, Chapter 5 studies the possibility of structural breaks in the relationship between functional distribution of income and growth. We argue that, from the 1980s, financialization and the European exchange rate agreements weakened the positive effect of the profit share on growth in Italy. The growth regime is therefore becoming less profit-led and more wage-led. Our results confirm this hypothesis and also shed light on the concept of cooperative and conflictual regimes as defined by Bhaduri and Marglin (1990).