Economics and Three Faces of Prudence

Modern economics does not have much use for the classical scheme of virtues and vices. Yet, it appears to recognise prudence, or something lying in the same general region as prudence. In classical philosophy, prudence is the virtue of practical rationality, or rationality in action. Economics too has a theory of rationality in action. This paper asks if this is a good theory – if the actions prescribed by economics are indeed the actions that an ideally prudent counsellor would prescribe. As I argue in what follows, there is reason to think that they are not, and the reason is to be traced back to the crucial dimension of time that is neglected in the economic theory of rational action.