New Directions in Economic Methodology (Economics as Social Theory)
Roger E. Backhouse
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Roger E. Backhouse (ed.)
Recent years have witnessed a dramatic growth in interest in economic methodology. However, this work has moved in a number of significantly different directions, and it is not easy to see how several of these might be reconciled. 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and the ideas associated with Kuhn, Lakatos and Popper that had emerged by the late 1970s has gone, and has been replaced by a range of more or less exclusive approaches.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 associated 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 economics 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 economics? How might these be pursued? It proceeds with a section which considers 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 philosophy (both analytical and continental), discourse analysis and various forms of analytical theory. The perspectives addressed here include different incarnations of realism, pragmaticism, those of the ‘rhetoric’ school and other approaches which see the economy as a ‘text’.
1 INTRODUCTION: NEW DIRECTIONS IN ECONOMIC METHODOLOGY
Roger E.Backhouse 1
Part I General perspectives
2 ENDS AND MEANS IN THE METHODOLOGY OF ECONOMICS
3 THE ART OF ECONOMICS BY THE NUMBERS
4 WHAT ARE THE QUESTIONS?
5 THE SOCIOLOGY OF SCIENTIFIC KNOWLEDGE: SOME THOUGHTS ON THE POSSIBILITIES
Part II Falsificationism: for and against
6 WHY I AM NOT A CONSTRUCTIVIST: CONFESSIONS OF AN UNREPENTANT POPPERIAN
Mark Blaug 111
7 TWO PROPOSALS FOR THE RECOVERY OF ECONOMIC PRACTICE
Bruce J.Caldwell 140vi NEW DIRECTIONS IN ECONOMIC METHODOLOGY
8 SCIENTIFIC THINKING WITHOUT SCIENTIFIC METHOD: TWO VIEWS OF POPPER
Lawrence A.Boland 157
9 THE LAKATOSIAN LEGACY IN ECONOMIC METHODOLOGY
Roger E.Backhouse 175
Part III Philosophical perspectives on economics
10 KUHN, LAKATOS AND THE CHARACTER OF ECONOMICS
Daniel M.Hausman 197
11 WHAT IS THE COGNITIVE STATUS OF ECONOMIC THEORY?
Alexander Rosenberg 218
12 REORIENTING THE ASSUMPTIONS ISSUE
Uskali Mäki 237
13 A REALIST THEORY FOR ECONOMICS
Tony Lawson 257
14 PRAGMATISM, PRAGMATICISM AND ECONOMIC METHOD
Kevin D.Hoover 285
Part IV Economics as discourse
15 HOW TO DO A RHETORICAL ANALYSIS, AND WHY
Donald N.McCloskey 318
16 METAPHOR AND ECONOMICS
Willie Henderson 343
17 THE ECONOMY AS TEXT
Vivienne Brown 368
Lakatos’s methodology of scientific research programmes is unhelpful in trying to understand the relationships between different economic theories. (2) Lakatos’s methodology of scientific research programmes is also vulnerable to criticisms of the Popperian epistemology on which it is based. Two such criticisms will be considered here. The first is the argument that Popper’s rejection of induction as a principle underlying knowledge is taken too far. His argument was that, however many
Colander’s motivation for resurrecting this terminology is the argument that the goals of positive economics and applied policy analysis are different. Though his work falls squarely in the tradition of work by practising economists such as Kamarck (1983) and Mayer (1993), he differs from them in attaching greater importance to abstract theory. The practical rules he suggests, therefore, apply only to applied policy analysis, and should not be used to criticize pure theory. Mirowski (Chapter 4)
methodology, influenced primarily by Friedman. It is arguable that, with the exceptions cited above, economists interested in methodology turned to Kuhn and Lakatos INTRODUCTION 21 4 5 6 7 8 from the 1970s, and to Popper only after 1980: that in economics Popper effectively came after Kuhn and Lakatos. These ideas are discussed more fully in several chapters in Parts II and III, notably Hausman (Chapter 10) and Backhouse (Chapter 9). To become the Journal of Economic Methodology from 1994.
falsificationism with the historical sensitivity of Kuhn’s approach.4 Falsificationism, whether Popperian or Lakatosian, is the methodology against which the branches of economics analysed later in the book were evaluated. Blaug ends with a bold conclusion concerning the role of methodology in economics. What methodology can do is to provide criteria for the acceptance and rejection of research programs, setting standards that will help us to discriminate between wheat and chaff. These standards,
any testable hypotheses to what Hahn calls ‘stone age theory’, that is, the structure-conduct-performance approach to industrial organization. Hahn (1992b:5) in reply expresses consternation at Backhouse’s endorsement of Fisher: ‘Surely Backhouse doesn’t believe Fisher? All one needs to do is to read the old literature on entry prevention and contrast it with the new’. To a formalist like Hahn, progress is theoretical progress: pouring old wine in new bottles is what better economics is all