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other judgements which themselves require justification. Because the justification for this new set of beliefs depends on the justification of antecedent beliefs, and the justification for these antecedent beliefs requires yet another set of beliefs, and so on, the process of justification becomes an infinite regress.10

The issue of justification has become so important to philosophers that at least one scholar has suggested that epistemology be described as the theory of justification rather than the theory of knowledge (Kekes 1977). Though few philosophers take such an extreme view, most would probably agree with John Pollock that: ‘The central problem of epistemology is to give an account of when beliefs are justified’ (Pollock 1984, p. 103). Despite the many differences between recent theories of knowledge, all include attempts to address the problem of an infinite regress of justifications.11 The problem is considered serious because it precludes the use of a truthful basis on which knowledge claims can be supported. Philosophers have thought that without such a foundation the regress of justifications leads to relativism or scepticism.12

THE METHOD OF FOUNDATIONALISM

Many renowned philosophers have considered the theory of foundationalism to be the most promising strategy for solving the regress problem.13 The goal of foundationalism is to identify a set of privileged ‘basic’ beliefs which are ‘immediately’ justified, and then demonstrate that these beliefs provide a basis for epistemically justifying all other beliefs. The foundationalist approach to justifying beliefs has been common among philosophers since the emergence of western philosophy. In the words of Nicholas Rescher, foundationalism ‘represents the predominant and most strikingly prominent approach to Western epistemology, deep-rooted throughout the Western tradition from Aristotle through Descartes to the present day’ (Rescher 1979, p. 54). Most forms of foundationalism contain two criteria that may be identified as the ‘privileged justification rule’ and the ‘dependency rule’:

1 Privileged Justification Rule: There exists a set of immediately justified observations or beliefs such that epistemic justification for each member of the set does not depend exclusively on the prior justification of other observations or beliefs.

2 Dependency Rule: Epistemic justification for all true non-basic beliefs must ultimately be derived from the set of basic beliefs: that is, from beliefs that satisfy the Privileged Justification Rule.

Foundationalism claims that the only way to halt the regress of epistemic justifications is to anchor non-basic beliefs to a foundation of basic beliefs. At one time foundationalists argued that basic beliefs must be objective, certain and absolute.14 The philosopher C.I.Lewis, for example, warned that unless such a bedrock is correctly identified:

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any citation of evidence for a statement about objective reality, and any mentionable corroboration of it, will become involved in an indefinite regress of the merely probable—or else it will go round in a circle—and here probability will fail to be genuine. If anything is to be probable, then something must be certain…. We do have such absolute certainties, in the sense data initiating belief and in those passages of experience which later may confirm it.

(Lewis 1946, p. 186)

Because of problems encountered in identifying incorrigible beliefs, recent versions of foundationalism have abandoned references to axiomatic, incorrigible, intuitive, immediate, primitive, and self-evident beliefs in favour of those that are self-justifying, self-presenting or self-warranted.15 Regardless of the subtle differences between these descriptions, it has been assumed that foundational beliefs are in some sense basic or simply ‘given’.

Foundationalism has often been compared to Euclidean geometry because of the geometric-like structure that links the justification of nonbasic to basic beliefs. The structure connects the claims of justification to a set of axioms by way of a linear claim of inferences. Rescher notes the ‘Euclidean approach’ is ‘the paradigm model of cognitive systemization throughout the mainstream of Western philosophy’ (Rescher 1979, p. 53). This geometric analogy can be expanded somewhat if we visualize foundationalism as an epistemic structure with basic beliefs on the lower level supporting beliefs at all higher levels. The levels are connected in such a way that whatever happens to change beliefs in the ‘superstructure’ will not affect the foundational beliefs. Rescher suggests that the structure can be viewed as a ‘vast inverted pyramid that represents the total body of knowledge’ with the foundational beliefs representing the pyramid’s apex (Rescher 1979, p. 41).

Empirical observations, such as perceptions, are sometimes offered as an example of a source for basic beliefs. Williams, for example, cites a foundational-type theory as ‘the empiricist theory of perceptual knowledge’ (Williams 1977, p. 25). Rorty suggests that one reason why empirical beliefs seem to qualify as immediate beliefs is that we can be certain about them ‘because of their causes rather than because of the arguments given for them’. (Rorty 1979, p. 157). Beliefs based on perceptions have been considered foundational because of the ‘grip’ a perceived object is thought to have on us. According to this view, an object is known objectively because, as philosopher Laurence BonJour notes, it is ‘simply given to or thrust upon the mind’ (BonJour 1985, p. 60).

If an indubitable epistemic foundation for justification can be discovered then there exists an objective and universal basis for choosing between competing knowledge claims. It has often been assumed that the task of philosophy is to derive a universal epistemic standard of this type (Rorty 1979). An economist could defend the claim that he was rational by appealing to a foundationalist

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standard that solved the infinite regress puzzle. If it exists, the foundationalist standard could be used to justify a rational economist’s claim that he had taken all relevant information into account. However, faced with sophisticated challenges to their theories, foundationalists repeatedly have been unable to defend systems of knowledge that rely on basic beliefs. To a growing number of philosophers it appears unlikely that such a defence is possible.

Problems with foundationalism

Critics of foundationalism usually begin by questioning whether the foundationalist has identified beliefs which are actually self-justifying. They then question whether the set of basic beliefs is sufficient to justify all non-basic beliefs. It is far beyond the scope of this paper to review all the objections raised against the various forms of foundationalism.16 Instead, the justification of beliefs based on perceptions will be analysed to illustrate two difficulties with foundationalist-type theories. Beliefs based on perceptions are commonly accepted as given by most people and have been treated as foundational by numerous philosophers.17 Perceptual awareness is usually assumed to produce ‘hard’ or ‘brute’ facts because it is immediate, but this evidence is at least conceivably subject to revision. We learn, for example, that under fluorescent lighting objects of a certain colour will appear differently than they do when they are exposed to sunlight. There is also evidence that the human eye and mind must learn to integrate the ‘raw data’ of sense perception to form images of objects. Unless this learning process is guided exclusively by the nature of the object (and not ‘constructed’ in part by the perceiver), the resulting image will be influenced by perceptual interpretations and judgements that are independent of the external world. Perceptual judgements formed in this manner would appear to violate foundationalism’s privileged justification rule. For Rescher, as for many other modern philosophers, ‘The consideration that we have no direct access to the truth regarding the modus operandi of the world we inhabit is perhaps the most fundamental fact of epistemology’ (Rescher 1979, p. 35).

A slightly modified view of foundationalism claims that the conditions under which the perceptual object is observed must be taken into account. Unfortunately, we cannot step outside the sensory-perceptual process to judge whether there are conditions that distort our current perceptions. We can only appeal to other perceptions or other beliefs. To evaluate the reliability of the perceptual process, some additional standard must be applied; however, appealing to beliefs outside the set of givens runs counter to the strategy on which foundationalism is based. Relying on an additional standard puts in motion the regress of justifications which foundationalism was designed to prevent.

A second challenge facing foundationalism concerns its ability to construct the inferential linkage that connects basic beliefs to all other beliefs. The foundationalist must demonstrate that the context of basic beliefs is sufficiently

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rich to confer justification independently on to other beliefs. Within the philosophy of science, most scholars have rejected the view that unidirectional linkage connects basic observations with the more complex elements of explanatory theory. Instead, observations themselves are considered to be ‘theory-laden’. Rorty notes:

We cannot determine relevance by focusing on subject matter and saying, for example, ‘Don’t bother with what Scripture said God did, just look at the planets and see what they do’. Mere looking at the planets will be of no help in choosing our model of the heavens, any more than mere reading of Scripture.

(Rorty 1979, p. 332)

Similar statements could be made for the social sciences. There is little reason to believe that concepts such as the state, economy, or society can ultimately be inferred from basic beliefs.

Foundationalist theories have played a pivotal role in philosophy, and philosophers do not take lightly the fact that these theories are unable to solve the regress problem. The apparent failure of foundationalism has led some to advocate abandoning epistemic investigations and even philosophy itself. Even for scholars who are reluctant to abandon epistemology, the relativist position may seem to be an increasingly attractive alternative.

Foundationalism and economic methodology

Even though philosophers have identified many weaknesses in foundationalism, the foundationalist approach is still relied on by many economists who advocate methodological positivism.18 In economics, the classic statement regarding positivist methodology is Milton Friedman’s essay ‘The methodology of positive economics’ (Friedman 1953). In this article Friedman draws on positivist and instrumentalist theories to form a foundationalist-type standard. He employs this methodological standard to show why assumptions made in economic models are often unrealistic. Friedman claims that assumptions in economic theories are similar to the assumption of a perfect vacuum in theories regarding gravity: ‘Truly important and significant hypotheses will be found to have “assumptions” that are wildly inaccurate descriptive representations of reality, and, in general, the more significant the theory, the more unrealistic the assumptions (in this sense)’ (Friedman 1953, p. 14).

For example, few economists believe that economic agents are sophisticated enough to calculate the expected value of economic variables by solving probability density functions. Theorists would have serious problems if the validity of formal RE models depended on a realistic representation of agents and the decision-making procedures actually used by producers and consumers.