It is widely agreed that the concept of general equilibrium and, in particular, general equilibrium existence proofs play a central role within the neoclassical approach to economic theory. There is much less agreement, however, on the concepts of general equilibrium and of neoclassical economic theory themselves.

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.

According to the instrumentalism of Friedman and Machlup it is irrelevant whether the explanatory principles or “assumptions” of a theory satisfy any criterion of “plausibility,” “realism,” “credibility,” or “soundness.” In this view the main or only criterion for selecting theories is whether a theory yields empirically testable implications that turn out to be consistent with observations. All we should require or expect from a theory is that it is a useful instrument for the purpose of prediction. Considerations of the “efficiency” (...) of a theory for the purpose of ordering our experiences are permitted, but considerations of “plausibility” are not. “Explanatory assumptions” are not really explanatory in the sense that they claim to represent underlying causal processes in reality; they only serve to generate, by deduction, implications that are in accordance with as many observations as possible. (shrink)

This is a comprehensive anthology of works concerning the nature of economics as a science, including classic texts and essays exploring specific branches and schools of economics. Apart from the classics, most of the selections in the third edition are new, as are the introduction and bibliography. No other anthology spans the whole field and offers a comprehensive introduction to questions about economic methodology.

Patrick Suppes'' set-theoretical approach to the analysis of theories, and Joseph D. Sneed''s metatheory are briefly outlined. The notions of observation, illusion and hallucination are reconstructed according to these approaches. It is argued that the terms perception and truth are theoretical with respect to observation but nontheoretical with respect to illusion and hallucination. Hallucination is construed as a special kind of illusion.

Patrick Suppes' set-theoretical approach to the analysis of theories, and Joseph D. Sneed's metatheory are briefly outlined. The notions of observation, illusion and hallucination are reconstructed according to these approaches. It is argued that the terms ‘perception’ and ‘truth’ are theoretical with respect to observation but nontheoretical with respect to illusion and hallucination. Hallucination is construed as a special kind of illusion.

Several case studies and theoretical reports indicate that the structuralist concept of a constraint has a central role in the reconstruction of physical theories. It is surprising that there is, in the literature, only little theoretical discussion on the relevance of constraints for the reconstruction of social scientific theories. Almost all structuralist reconstructions of social theorizing are vacuously constrained. Consequently, constraints are methodologically irrelevant.In this paper I try to show that there really exist constraint-type assumptions in mathematical modelling in the (...) social sciences. Methodologically constraints have exactly the same role in the context of social mathematical modelling as they have in physical theories. In typical cases of mathematical modelling in the social sciences, the related constraints work as empirical hypotheses and should be tested by statistical means. (shrink)