New Directions in Economic Methodology PDF
Preview New Directions in Economic Methodology
NEW DIRECTIONS IN ECONOMIC METHODOLOGY Recent years have witnessed a dramatic growth in interest in economic methodology. However, this work has moved in a number of significantly dif- ferent directions, and it is not easy to see how several of these might be recon- ciled. The dominance of ‘falsificationism’ and the ideas associated with Kuhn, Lakatos and Popper that had emerged by the late 1970s has gone, and has been replaced by a range of more or less exclusive approaches. In New Directions in Economic Methodology some of the figures most closely asso- ciated with the most important of these new approaches provide new and definitive statements of their positions. The result reflects the diversity of work currently being undertaken in economic methodology. Much, but by no means all, of this work reflects a dissatisfaction with the current practice of eco- nomics and in the course of the book various attempts to reform or replace existing practices are proposed. The book begins with chapters which examine some of the big questions which underlie economics. What are—and what should be—the aims of eco- nomics? How might these be pursued? It proceeds with a section which consid- ers what is left of ‘falsificationism’. This includes chapters which advocate, criticize and reformulate what is still the dominant position within economic methodology. The third and fourth sections of the book reflect the extent to which recent developments are influenced by areas outside economics, especially philoso- phy (both analytical and continental), discourse analysis and various forms of analytical theory. The perspectives addressed here include different incarna- tions of realism, pragmaticism, those of the ‘rhetoric’ school and other approaches which see the economy as a ‘text’. Roger Backhouse is Reader in the History of Economic Thought at the University of Birmingham. ECONOMICS AS SOCIAL THEORY Series Edited by Tony Lawson University of Cambridge Social theory is experiencing something of a revival within economics. Critical analyses of the particular nature of the subject matter of social studies and of the types of methods, categories and modes of explanation that can legiti- mately be endorsed for the scientific study of social objects, are re-emerging. Economists are again addressing such issues as the relationship between agency and structure, between economy and the rest of society, and between inquirer and the object of inquiry. There is renewed interest in elaborating basic categories such as causation, competition, culture, discrimination, evolu- tion, money, need, order, organization, power, probability, process, rational- ity, technology, time, truth, uncertainty and value etc. The objective for this series is to facilitate this revival further. In contemporary economics the label ‘theory’ has been appropriated by a group that confines itself to largely a-social, a-historical, mathematical ‘modelling’. Economics as Social Theory thus reclaims the ‘theory’ label, offering a platform for alternative, rigorous, but broader and more critical conceptions of theorizing. ECONOMICS AND LANGUAGE Edited by Willie Henderson, Tony Dudley-Evans and Roger Backhouse RATIONALITY, INSTITUTIONS AND ECONOMIC METHODOLOGY Edited by Uskali Mäki, Bo Gustafsson and Christian Knudsen WHO PAYS FOR THE KIDS? Gender and the structures of constraint Nancy Folbre NEW DIRECTIONS IN ECONOMIC METHODOLOGY Edited by Roger E.Backhouse London and New York First published 1994 by Routledge 11 New Fetter Lane, London EC4P 4EE This edition published in the Taylor & Francis e-Library, 2004. Simultaneously published in the USA and Canada by Routledge 29 West 35th Street, New York, NY 10001 Selection and editorial matter © 1994 Roger E.Backhouse Individual chapters © of the respective authors All rights reserved. No part of this book may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library. Library of Congress Cataloging in Publication Data New directions in economic methodology/edited by Roger E.Backhouse. p. cm. Includes bibliographical references and index. ISBN 0-415-09636-7 1. Economics—Methodology. I. Backhouse, Roger. HB131.N48 1994 330’.01–dc20 93–37623 CIP ISBN 0-203-20408-5 Master e-book ISBN ISBN 0-203-26643-9 (Adobe eReader Format) ISBN 0-415-09636-7 (Print Edition) 0-415-09637-5 (pbk) CONTENTS C ontributors vi i P reface ix 1 I NTRODUCTION: NEW DIRECTIONS IN ECONOMIC METHODOLOGY Roger E.Backhouse 1 Part I General perspectives 2 E NDS AND MEANS IN THE METHODOLOGY OF ECONOMICS Terence W.Hutchison 27 3 T HE ART OF ECONOMICS BY THE NUMBERS David Colander 35 4 W HAT ARE THE QUESTIONS? Philip Mirowski 50 5 T HE SOCIOLOGY OF SCIENTIFIC KNOWLEDGE: SOME THOUGHTS ON THE POSSIBILITIES D.Wade Hands 76 Part II Falsificationism: for and against 6 W HY I AM NOT A CONSTRUCTIVIST: CONFESSIONS OF AN UNREPENTANT POPPERIAN Mark Blaug 111 7 T WO PROPOSALS FOR THE RECOVERY OF ECONOMIC PRACTICE Bruce J.Caldwell 140 vi NEW DIRECTIONS IN ECONOMIC METHODOLOGY 8 S CIENTIFIC THINKING WITHOUT SCIENTIFIC METHOD: TWO VIEWS OF POPPER Lawrence A.Boland 157 9 T HE LAKATOSIAN LEGACY IN ECONOMIC METHODOLOGY Roger E.Backhouse 175 Part III Philosophical perspectives on economics 10 K UHN, LAKATOS AND THE CHARACTER OF ECONOMICS Daniel M.Hausman 197 11 W HAT IS THE COGNITIVE STATUS OF ECONOMIC THEORY? Alexander Rosenberg 218 12 R EORIENTING THE ASSUMPTIONS ISSUE Uskali Mäki 237 13 A REALIST THEORY FOR ECONOMICS Tony Lawson 257 14 P RAGMATISM, PRAGMATICISM AND ECONOMIC METHOD Kevin D.Hoover 285 Part IV Economics as discourse 15 H OW TO DO A RHETORICAL ANALYSIS, AND WHY Donald N.McCloskey 318 16 M ETAPHOR AND ECONOMICS Willie Henderson 343 17 T HE ECONOMY AS TEXT Vivienne Brown 368 I ndex 383 CONTRIBUTORS Roger E.Backhouse is Reader in the History of Economic Thought at the University of Birmingham. He has published on macroeconomics, the history of economic thought and economic methodology, and is author of A History of Modern Economic Analysis, Economists and the Economy and is co-editor of Economics and Language. He is Review Editor of the Economic Journal. Mark Blaug is Professor Emeritus, University of London, and Visiting Pro- fessor of Economics at the University of Exeter. He is author of Economic Theory in Retrospect, Economic Theories: True or False and The Methodology of Economics. Lawrence A.Boland is Professor of Economics at Simon Fraser University. He is author of numerous articles and books on economic methodology, including The Foundations of Economic Method, Methodology for a New Microeconomics, Methodology of Economic Model Building and The Principles of Economics: Some Lies My Teacher Told Me. Vivienne Brown is Lecturer in Economics at the Open University, UK. Her research interests include the history of economic thought and language/ discourse. She is author of Adam Smith’s Discourse: Canonicity, Commerce and Con- science. Bruce J.Caldwell is Professor of Economics at the University of North Car- olina at Greensboro. He is author of Beyond Positivism: Economic Methodology in the Twentieth Century (recently reissued by Routledge) and is editor and co-editor of Carl Menger and His Legacy in Economics, The Philosophy and Methodology of Economics and Austrian Economics: Tensions and New Directions. David Colander is Christian A.Johnson Distinguished Professor of Eco- nomics at Middlebury College. He is co-author of The Making of an Economist and A History of Economic Theory and co-editor of The Spread of Economic Ideas. D.Wade Hands is Professor of Economics at the University of Puget Sound. He has published many articles on general equilibrium theory, the his- tory of economic thought and methodology. He is author of Testing, Rationality and Progress: Essays on the Popperian Tradition in Economic Methodology (1993). Daniel M.Hausman is Professor of Philosophy at the University of Wis- consin-Madison. He is co-editor of Economics and Philosophy. His writings on the viii NEW DIRECTIONS IN ECONOMIC METHODOLOGY philosophy of economics include Capital, Profits and Prices: An Essay in the Philoso- phy of Economics, The Inexact and Separate Science of Economics, and Essays on Philoso- phy and Economic Methodology. He is editor of The Philosophy of Economics: An Anthology, and is currently writing a book on ethics and economics. Willie Henderson is Senior Lecturer in the School of Continuing Studies at the University of Birmingham. He has a long-standing interest in methodologi- cal, language and educational issues in economics. He is co-editor of The Language of Economics: The Analysis of Economics Discourse (1990) and Economics and Language (1993). Kevin D.Hoover is Professor of Economics at the University of California, Davis. He is author of The New Classical Macroeconomics: A Sceptical Inquiry, as well as articles on macroeconomics, the methodology of economics, and phi- losophy. He is currently writing a book entitled Causality in Macroeconomics. Terence W.Hutchison is Emeritus Professor of Economics at the Univer- sity of Birmingham. He has published extensively on the history of economic thought and economic methodology. His publications on methodology include The Significance and Basic Postulates of Economic Theory (1938), Positive Economics and Policy Objectives (1964), Knowledge and Ignorance in Economics (1977) and Changing Aims in Economics (1992). He is currently compiling a selection of essays under the title The Uses and Abuses of Academic Economics. Tony Lawson is Lecturer in Economics at the University of Cambridge. He has published on economic methodology and on general economics, including industrial relations and UK industrial decline. He is a member of several edito- rial boards, and is joint coordinator of the European Association for Evolution- ary Political Economy’s Research Group on Methodology. Donald N.McCloskey is Professor of Economics at the University of Iowa. He has published numerous articles and books on British economic history and the rhetoric of economics, including The Rhetoric of Economics and If You’re So Smart: The Narrative of Economic Expertise. Uskali Mäki is currently Senior Research Fellow at the Academy of Fin- land. He has published papers on the metatheory of economics, including Friedman’s, Austrian and institutionalist views, the rhetoric, sociology and metaphysics of economics, and various facets of the issue of realism. He is co- editor of Rationality, Institutions and Economic Methodology (1993) and is preparing a monograph on Economics and Realism. Philip Mirowski is Carl E.Koch Professor of Economics at the University of Notre Dame. He is author of Against Mechanism and More Heat Than Light, and editor of Natural Images in Economics: Markets Read in Tooth and Claw. Alexander Rosenberg is Professor of Philosophy at the University of Cali- fornia, Riverside. He is author of seven works on the philosophy of social science and biology, including Philosophy of Social Science and Economics— Mathematical Politics or Science of Diminishing Returns? PREFACE The idea for this book arose out of conversations with Alan Jarvis, at Rout- ledge. We were discussing the possibility of producing an anthology of articles on economic methodology that would be more up-to-date than what was then available. After considering the various alternatives we decided that this was not an attractive option. Instead, we decided that the best way to provide a broad perspective on recent work was to invite a wide range of people working in the area to write something new. The invitation was very general, potential contributors being invited to write about a topic that they thought was impor- tant. The brief was to write something that was clear and accessible to stu- dents, whilst at the same time saying something that would be of interest to specialists in the field. In my view the contributors have succeeded in both tasks. Some view their previous work from a new perspective. Others take old arguments a stage further. Others explore new avenues. I am grateful to Alan Jarvis for his assistance and encouragement, and to the contributors who provided valuable criticisms of others’ contributions. With- out either of these inputs the quality of the book would have been much poorer.
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