chapter  2
11 Pages

John Stuart Mill and the concept of socially embedded rationality

Before Mill, economists offered little proof of the principle of economic

behaviour other than introspective evidence.1 Even if Adam Smith and

David Ricardo, to take only the two greatest progenitors for example, were

keen observers of economic life, they only mentioned introspection as a

unique source of justification for the principle of economic behaviour. As

a result, when Smith is writing about the “propensity in human nature to

truck, barter and exchange”, or when Ricardo is writing about the capital-

ist “envy for the most profitable investment”, they were both exposed to

the danger of subjectivist bias (Cf. Smith 1776: 17, Ricardo 1817,

chap. iv). John Stuart Mill was the first to use a principle of economic

behaviour as one of the fundamental premises of economic explanation

with the ambition of an empirical generalization.