The tone of this paper is largely critical. Therefore, I would like to begin by praising Donald McCloskey and Arjo Klamer for their exciting and provocative initiative in the metatheory of economics. They have done us a great favor by opening our eyes to some hidden aspects in the intellectual practices of economists. They have shown that economics is rhetoric; it is persuasion, discourse, conversation, and negotiation, to use their favorite phrases. They have provided plausible arguments and illuminating examples to (...) convince us of the literary character of economic reasoning, notwithstanding the formal languages used by economists and the positivist pretensions typical of the self-image of the discipline. However, McCloskey and Klamer have been less successful in trying to convince us of what economics is not. In particular, it concerns me that they have opened up a gap between rhetoric and realism. They seem to think that because economics has a rhetorical character, it cannot be understood in realist terms. I will argue that this view is mistaken: rhetoric and realism do not exclude each other, but rather they are capable of being combined in a coherent methodology of economics. It is a valuable contribution to import the insights of the newly rehabilitated rhetoric to the metatheory of economics; but it is unnecessary to marry them with enthusiasm about the fashionable anti-realism of Richard Rorty and others. While this is my overall thesis, it is clear that only initial steps towards its substantiation can be taken in this paper. I intend to proceed as follows. I will first make an attempt to locate the problem at hand in the history of the metatheory of economics. Then I will point out those elements in rhetorical metatheory as practiced and defended by Klamer and McCloskey that apparently have anti-realist or non-realist assumptions or implications, either directly or via considerations of scientific rationality. Next I will formulate a few concepts of realism, the differences between which have been ignored in the methodology of economics to this day. Then I will make preliminary attempts to inquire into the mutual compatibility of the rhetorical insights provided by McCloskey and Klamer and realism in this context. I will show that, in principle, there should be no insurmountable obstacles to combining the two; in some of its senses, realism will even turn out to be presupposed by the rhetorical approach. I do not primarily intend to argue for realism as such in this paper. Instead, I will argue for the compatibility of realism and rhetoric. The argument is based on Klamer's and McCloskey's own commitments; in this sense, the argument is immanent to their rhetorical approach. As a final point, I will argue that one should not be indifferent about realism: it does make a difference in economics and in the methodology of economics whether rhetoric is accepted with or without realism. (shrink)

As made manifest by Clower's comments on their “science fiction” nature, general equilibrium theories present such peculiar and puzzling features that the methodologist must perforce seek some specific methodological accommodation for this part of economic theory. The role played by such theories in contemporary economics is so fundamental that the impossibility of appraising them by means of any version of falsificationism, and their patent lack of empirical content if approached with the conceptual devices of the methodology of scientific research programs, (...) have prompted several scholars interested in the methodology of economics to search for a reasonable way out. (shrink)

In a series of recent writings, John Roemer has made a provocative claim: exploitation and class are merely second-order concepts within Marxian theory, because both phenomena derive directly from differential ownership of productive assets ; indeed, exploitation remains a consistent index of economic injustice only if a “property relations” conception of exploitation replaces the common “labor-value” view. In sum, property relations, not the labor exchange, the labor proces, labor values, or even capitalist accumlation should bethecentral concern of Marxian theory.

This paper examines the relationship between modern theories of microeconomics and macroeconomics and, more generally, it evaluates the prospects of theoretically reducing macroeconomics to microeconomics. Many economists have shown strong interest in providing "microfoundations" for macroeconomics and much of their work is germane to the issue of theoretical reduction. Especially relevant is the work that has been done on what is called The Problem of Aggregation. On some accounts, The Problem of Aggregation just is the problem of reducing macroeconomics to (...) microeconomics. I show how to separate these problems and then try to determine to what extent particular kinds of solutions to The Problem of Aggregation succeed in reducing macroeconomics to microeconomics as well. I argue that reduction is not possible by this means given the current state of microeconomics. I also describe how reduction may be possible by means of (dis)aggregation if microeconomics is supplemented in a certain way with the results of experimental research on individual economic agents. (shrink)

Introducir un recorrido a través de la historia y la teoría propia de la filosofía dela economía es una tarea del todo ambiciosa, sin embargo, Mariusz Maziarz lo lleva adelante en esta obra, que se puede considerar un manual actualizado de la filosofía de la economía y, en particular, de la epistemología de la economía. Aun-que no es un libro de historia del pensamiento económico ni de historia de la filosofía de las ciencias, sino más bien una iniciación ordenada a (...) los problemas de la epistemología de la economía, ellos se fundan en la filosofía de la ciencia y están atravesados por cuestiones y debates históricos. Quizás algo de eso sea aquello que Maziarz quiere desenredar en este texto. (shrink)

This paper discusses the development of the field of economic methodology during the last few decades emphasizing the early influence of the "shelf" of Popperian philosophy and the division between neoclassical and heterodox economics. It argues that the field of methodology has recently adopted a more naturalistic approach focusing primarily on the "new pluralist" subfields of experimental economics, behavioral economics, neuroeconomics, and related subjects.

InStabilizing Dynamics Roy Weintraub provides a history of stability theory from the work of Hicks and Samuelson in the late 1930s to the Gale and Scarf counterexamples in the 1960s. Unlike his earlier work in the history of general equilibrium theory this recent contribution is not an attempt to fit the Walrasian program into the narrow framework of some particular philosophy of natural science. Rather, the theme inStabilizing Dynamicsis broadly social constructivist. Simply put, the constructivist view of science is “that (...) scientific knowledge itself is constructed socially, in communities of scientists: Knowledge is constructed, not found”. (shrink)

In the debate on realism of models in economics, the Austrian School and Hayekin particular, seem to have, in a certain way, remained outside. Assuming neoclassical models asunrealistic, the theory of the market as a process looks like a more realistic proposal. However, oneof the fundamental issue s in Hayek’s dissent is not so much the unrealism of the assumptions, but that the market equilibrium theory was not correctly raised, especially with regards to the perfectknowledge assumption. Despite this, in this (...) setting and in line with a previous paper (Zanotti & Borella, 2015), we will argue that Hayek’s spontaneous order may be understood as the Austrian School’s “model”, assuming Mäki’s MISS version of models (Models as Isolations and Surrogate Systems) and emphasizing the place of the ontological foundation of Hayek’s proposal when assessing his model. (shrink)

In his biography of Karl Popper, Malachi Hacohen brilliantly reconstructs the development of Popper's ideas through 1946, correcting many errors regarding the sequence of their emergence. In addition he recreates Popper's Vienna and provides insights into Popper's complex personality. A larger goal of Hacohen's narrative is to show the relevance of Popper's philosophical and political thought for the left. Unfortunately this leads him to neglect and distort certain aspects of the story he tells, particularly when it comes to the relationship (...) between Popper and F.A. Hayek. (shrink)

Alexander Rosenberg (1983) has argued, contrary to his previous work in the philosophy of economics, that economics is not science, and it is merely mathematics. The following paper argues that Rosenberg fails to demonstrate either of these two claims. The questions of the predictive weakness of modern economics and the cognitive standing of abstract economic theory are discussed in detail.

This paper returns to a perennial controversy I examined in a previous paper in the Journal of Business Ethics (Vol. 2, 1983). Is economic theory an ethically neutral discipline or do its statements presuppose a commitment to moral values? Once again this issue is addressed via a case study of the neo-classical theory of rational choice. In the present paper I focus on behaviourist forms of operationalist attempts to short-circuit any argument that would seek to infer moral presuppositions from the (...) use of evaluative discourse. In particular, I examine strategies that have sought to excise from economic theory the mentalistic vocabulary required to describe valuations per se. And I argue that such tactics are deficient since they i) impoverish the explanatory power of economic theory, (ii) fail to recover the normative usefulness of the theory of choice, and (iii) camouflage the continued presupposition of moral commitments within neo-classical theory. (shrink)

Discussions of Karl Popper's falsificationist philosophy of science appear regularly in the recent literature on economic methodology. In this literature, there seem to be two fundamental points of agreement about Popper. First, most economists take Popper's falsificationist method of bold conjecture and severe test to be the correct characterization of scientific conduct in the physical sciences. Second, most economists admit that economic theory fails miserably when judged by these same falsificationist standards. As Latsis states, “the development of economic analysis would (...) look a dismal affair through falsificationist spectacles.”. (shrink)

Among the various institutional structures of an economy like the firm and the marketplace is one that is like no other. Science is unique. This uniqueness raises an important question: why does science exist? From an economic perspective, there are two potentially meaningful approaches to the existence of science. They both encompass institutional pluralism. A substitutes theory of comparative institutions presupposes the primacy of the commercial marketplace over firms—that firms substitute for the market when markets fail. This theory has not (...) been used to explain the existence of science. A complements theory postulates that many simultaneous institutional responses, including science, are necessary for creating an efficient and equitable economy. The economic function of science is to produce fundamental theoretical abstractions about our world. Scientific theories are public goods that would not likely be produced within the governance structures of commercial markets and firms. The aim is to complement but not supplant traditional philosophical answers that science exists to discover truth and knowledge. (shrink)

Why is it that some business managers appear to behave differently in private and at work? How, if at all, are the decisions managers make affected by the nature of their organisations? What impact do organisational values have on the moral autonomy of managers? A research project into these questions is now under way in three disparate Australian business firms and this paper sets out the premise underlying it. For purposes of research the general premise is that the moral character (...) of a business influences the moral judgements and actions of its members. More specifically, it is suggested that the economic paradigm renders a business organisation amoral rather than moral or immoral, and as a result moral responsibility comes to be assigned to individual members. However, the socio-cultural nature of such firms interferes with the ability of managers to exercise moral autonomy. Governed as it is by the market or laws of economics, the amoral organisation is likely to transform its members into individuals without moral standards. (shrink)

Modelling agency in economics rests primarily on the assumption of instrumental rationality. Managerial agency is more often analysed with a more complex ‘behavioural’ approach. This has led for years to a sterile debate about the usefulness of the abstract rationality postulate between those who think that it is all but sufficient and those who doubt if it is even necessary. This paper argues that positing an abstract (but real) rational core to managerial agency that is then ‘concretised’ towards actual managerial (...) behaviour is the way forward. Rationality is a necessary but not sufficient characterisation of managerial agency. The theoretical argument is supported by reference to the case of the ill-fated Long Term Capital Management built around the Black, Merton and Scholes Nobel Prize-winning derivatives pricing model. It is argued that the 1998 failure of the portfolio was not the result of a failure of rational agency but of the complexities of its implementation. (shrink)

The classical view of "rational man" as the unit of analysis for economic behavior and marketplace exchange has been changed by the late twentieth century with the help of behavioral economics that considers predictable irrationality as a normal mode of behavior. Instead of revising neoclassical economics to fit contemporary economic crises, it is recommended to follow Adam Smith's original concerns for the social setting of individual behavior and to treat economic crises with pragmatic flexibility rather than with dogmatic ideology.