Abstract

In his comment on my paper Western economics and the Economy of Japan (Katzner, 1999), Thiruvadanthai raises three issues of considerable importance for economic analysis. The first concerns the significance of the relationship between the cultural background of the investigators and the culture in which the object of the investigators' analysis is set. The second has to do with the meaning of the term rationality or rational behavior as it used in economics. And the third, which relates, in a fundamental way, to the purpose of economic analysis itself, is about the meaning and role of explanation in economics. I disagree with the position taken by Thiruvadanthai, or implicit in his discussion, on each of these issues and, in what follows, will try to set out the reasons why.

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