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)

The F-twist is giving way to the methodology of scientific research programs. Milton Friedman's “Methodology for Economics” is being supplanted as the orthodox rationale for neoclassical economics by Imre Lakatos' account of scientific respectability. Friedman's instrumentalist thesis that theories are to be judged by the confirmation of their consequences and not the realism of their assumptions has long been widely endorsed by economists, under Paul Samuelson's catchy rubric “the F-twist.” It retains its popularity among economists who want no truck with (...) methodology, but among the increasing number of able economists who are writing on methodology the F-twist has been surrendered, not so much because these writers have decided it is false, as because something better has finally come along. (shrink)

Milton Friedman's famous methodological essay contains, along with much else, some strands that look as though they were taken from the “empirical-scientific” fabric described by Karl Popper. Think, for example, of Friedman's conviction that the way to test a hypothesis is to compare its implications with experience. Or of his more or less explicit espousal of the view that while no amount of facts can ever prove a hypothesis true, a single “fact” may refute it. Or of his assertion that (...) hypotheses are to be accepted only as provisionally true, and then only after repeated efforts to refute them have failed. The appearance of these Popperian ideas is not surprising. (shrink)

Dans cet article, nous livrons une analyse du statut épistémologique de l’hypothèse d’efficience des marchés. Sans juger de sa véracité ou de sa fausseté, nous montrons qu’elle ne peut, en aucun sens rigoureux, être entendue comme une proposition empirique testable. Aucune expérience n’existe permettant de la falsifier irrévocablement. A rebours, nous montrons qu’elle ne peut être entendue que comme une proposition analytique, comme inaugurant un nouveau système de définitions cohérent par lui-même. En cela, la formulation de l’hypothèse d’efficience des marchés (...) a ouvert un nouveau programme de recherche, dont nous mettons en évidence les grandes lignes directrices. (shrink)

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.

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)

This article assesses the value of Karl Popper's situational analysis for contem porary sociology We maintain that this element of Popper's social science methodology has been largely neglected by sociologists and suggest that this is because it is borrowed from economics. As such, situational analysis has much in common with recent attempts to introduce rational choice in sociology. Our main question is this: What is the contribution of situational analysis to the current debate about rational choice in sociology? Our answer (...) is that Popper has little to add to this debate. His formulation of situational analysis is too general and too vague to be much of a guide to research. Among other things, situational analysis fails to pay due attention to interests and to social interaction in the explanation of social phenomena. On the positive side, we notice that Popper does include social institutions as the most important element in individuals' situations. (shrink)

In this paper, I shall defend two main claims. First, Friedman’s famous paper “On the methodology of positive economics” (“F53”) cannot be properly understood without taking into account the influence of three authors who are neither cited nor mentioned in the paper: Max Weber, Frank Knight, and Karl Popper. I shall trace both their substantive influence on F53 and the historical route by which this influence took place. Once one has understood these ingredients, especially Weber’s ideal types, many of F53’s (...) astonishing sentences like “the more significant the theory, the more unrealistic the assumptions”, make good sense. Second, I shall claim that the much-discussed question whether Friedman’s essay espouses an instrumentalist or a realist position, is the wrong question to be asked. I shall illustrate that by a comparison with examples from physics in which also unrealistic assumptions are made. Also there, the question whether these assumptions are indicators of instrumentalism or realism is not appropriate. Cleared from these misunderstandings, F53 presents itself as an interesting and reasonable but much less controversial contribution to the methodology of economics. (shrink)

A standard problem in empirical inquiry is how to adjudicate between contending theories when they work from different fundamental assumptions. In the field of political sociology, several strategies are adopted, from metatheoretical and comparative historical approaches to the recent formal models of scientific growth proposed by Imre Lakatos and Larry Laudan. After considering the limitations of these approaches, I develop an alternative strategy—"second—order empiricism"—based on the idea that successor theories have an onus to explain the apparent success of their rivals, (...) not only their own and their rivals' anomalies. Such a strategy, I argue, underscores some of the most effective analysis and argument in political sociology, yet is obscured by the appeal to other methodologies. (shrink)

From the mid-1960s until the late 1980s, the well-known general philosophies of science of the time were applied to economics. The result was disappointing: none seemed to fit. This paper argues that this is due to a special feature of economics: it possesses ‘orientational paradigms’ in high number. Orientational paradigms are similar to Kuhn’s paradigms in that they are shared across scientific communities, but dissimilar to Kuhn’s paradigms in that they are not generally accepted as valid guidelines for further research. (...) As will be shown by several examples, orientational paradigms provide economics with common points of reference that support its epistemic coherence and make scientific discourse more easily possible across school boundaries. With the help of systematicity theory, a newer general philosophy of science, one can further elucidate the role of orientational paradigms with regard to scientific progress. (shrink)

Since its inception in the late 1970s, behavioural economics has gone from being an outlier to a widely recognized yet still contested subset of the economic sciences. One of the basic arguments in behavioural economics is that a more realistic psychology ought to inform economic theories. While the history of behavioural economics is often portrayed and articulated as spanning no more than a few decades, the practice of utilizing ideas from psychology to rethink theories of economics is over a century (...) old. In the first three decades of the 20th century, several mostly American economists made efforts to refine fundamental economic assumptions by introducing ideas from psychology into economic thinking. In an echo of contemporary discussions in behavioural economics, the ambition of these psychology-keen economists was to strengthen the empirical accuracy of the fundamental assumptions of economic theory. In this article, we trace, examine, and discuss arguments for and against complementing economic theorizing with insights from psychology, as found in economic literature published between 1900 and 1930. The historical analysis sheds light on issues and challenges associated with the endeavour to improve one discipline’s theories by introducing ideas from another, and we argue that these are issues and challenges that behavioural economists continue to face today. (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.

Despite continued attention, finding adequate criteria for distinguishing “good” from “bad” scholarly journals remains an elusive goal. In this essay, I propose a solution informed by the work of Imre Lakatos and his methodology of scientific research programmes (MSRP). I begin by reviewing several notable attempts at appraising journal quality – focusing primarily on the impact factor and development of journal blacklists and whitelists. In doing so, I note their limitations and link their overarching goals to those found within the (...) philosophy of science. I argue that Lakatos’s MSRP and specifically his classifications of “progressive” and “degenerative” research programmes can be analogized and repurposed for the evaluation of scholarly journals. I argue that this alternative framework resolves some of the limitations discussed above and offers a more considered evaluation of journal quality – one that helps account for the historical evolution of journal-level publication practices and attendant contributions to the growth (or stunting) of scholarly knowledge. By doing so, the seeming problem of journal demarcation is diminished. In the process I utilize two novel tools (the mistake index and scite index) to further illustrate and operationalize aspects of the MSRP. (shrink)

The normative and metanormative pluralism that figures among core self-descriptions of democratic theory, which seems incompatible with democratic theorists’ practical ambitions, may stem from the internal logic of research traditions in the social sciences and humanities and in the conceptual structure of political theory itself. One way to deal productively with intradisciplinary diversity is to appeal to the idea of a meta-consensus; another is to appeal to the argument from cognitive diversity that fuels recent debates on epistemic democracy. For different (...) reasons, both strategies fail, such that a metatheoretical step aside may be desirable, one that entails modeling democratic theory after the public justification approach. (shrink)

. Imre Lakatos's philosophy of science can provide helpful leads for theological methodology, but only when mediated by the disciplines that lie between the natural sciences and theology. The questions of relativism and truth are used as indices for comparing disciplines, and Lakatos's theory of natural science is taken as the starting point. Major modifications of Lakatos's work are demanded as one moves from the natural sciences, through economics, the interpretive social sciences, literary theory, and into theology. Although theology may (...) consist of Lakatosian research programs, it also includes programs of interpretation and programs for living. This conclusion must influence our definition of theological truth and our assessment of theological relativism. (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)

In the methodology of scientific research programs (MSRP) there are important features on the problem of prediction, especially regarding novel facts. In his approach, Imre Lakatos proposed three different levels on prediction: aim, process, and assessment. Chapter 5 pays attention to the characterization of prediction in the methodology of research programs. Thus, it takes into account several features: (1) its pragmatic characterization, (2) the logical perspective as a proposition, (3) the epistemological component, (4) its role in the appraisal of research (...) programs, and (5) its place as a value for scientific research. -/- The notion of “novel facts” is highly relevant in his conception, where several aspects are involved: the directions of novel facts, the different kinds of novelty, and the transition from six possible options of “novel facts” to four choices. Thereafter, the prediction of novel facts as the criterion of appraisal is considered. On the one hand, this requires analyzing the theoretical, empirical, and heuristic possibilities of appraisal; and, on the other, whether there is an overemphasis on the role of prediction in methodology of scientific research programs. As a consequence, there is an analysis of Lakatos’ criterion of appraisal in MSRP and economics. (shrink)