How does that difference affect what each kind of theory can cover, and what it can claim?
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1.What is the difference between an economic theory defined in a purely formal way, and one with a substantial definition (that is, between a theory with no substantial content, and a theory defined by its substantial content)? How does that difference affect what each kind of theory can cover, and what it can claim? What can each do that the other can’t?
Here are a bunch of definitions, obviously the first three are formal, the rest are substantial:
a. “Praxeology [economics] is a science of means, not of ends. It applies the term happiness in a purely formal sense.” (Ludwig von Mises)
b. “Economics is the science which studies human behavior as relationship between ends and scarce means which have alternative uses.” (Lionel Robbins, but generally accepted by Neoclassical economists)
C. “Economics studies the allocation of scarce resources among competing ends for the satisfaction of unlimited wants.” (A standard textbook interpretation of Robbins’ definition)
d. “Economics studies the causes of material welfare.” (“standard” definition according to Robbins)
e. “Economics is the study of how the means of life are provided.” (Institutionalist Economics, Foster)
f. “Economics is the study of the economy.” (Ha-Joon Chang)
g. “Economics is the study of the processes of production and distribution.” (A variant of the former)
h. “The critique of political economy / the critical analysis of the capitalist mode of production.” (Marx)
2. What should economic theory aim to achieve?
NOTE: The two prompts are related. So, if you do the second, one thing to consider is the formal/substantial division. Both raise not only the question of the positive/normative, fact/value distinction, but also that of the relation of positive and normative to the concept of critique (you may want to look at “Critique; Positive, normative, Critical”).
