A centipede can walk until it thinks about howit does so. Thereafter it stumbles, over thesheer impossibility of the information andcoordination required. Life in the economy islittle different. Those engaged in productionand exchange discover, pragmatically, ways tomake them work. Those observing the processsee, realistically, the immense improbabilitythat it should do so. That most economies workin practice, but must pass such toughteleological tests to succeed in theory,highlights a difference between players' andspectators' outlook which may help to explainwhy the game has repeatedly (...) been thrown wideopen just when conclusive results seemed withinreach.Section 1 of this paper identifies the fourforms of realism which economists have tendedto adopt. Section 2 considers the pragmatism ofeconomic agents, when observed in action bypsychologists and management scholars notoverly steeped in economic theory. Theconcluding section reviews the ways in whicheconomists have tried to blur the distinction,by reclassifying agents as realistic or theirown views as pragmatic, and suggests that amore pragmatic economics might bridge thedivide. (shrink)

In this paper the use of mathematics in economics will be discussed, by comparing two approaches to mathematics, a Cartesian approach, and a Newtonian approach. I will argue that while mainstream economics is underpinned by a Cartesian approach which led to a divorce between mathematics and reality, the contributions of key authors of the Cambridge tradition, like Marshall, Keynes and Sraffa, are characterised by a Newtonian approach to mathematics, where mathematics is aimed at a study of reality. Marshall was influenced (...) by the Newtonian approach that still characterised many aspects of the Cambridge Mathematical Tripos, where the emphasis was on geometrical and mechanical examples rather than on symbolic (Cartesian) mathematics. Keynes, who criticised (Cartesian) symbolic mathematics, was indeed an admirer of Newton and of his method. Sraffa's mathematical constructions are also in line with the Newtonian approach where arithmetic and geometry were strictly separated, since Sraffa's mathematical constructions typically use arithmetic without engaging in the mixture between geometry and arithmetic that occurs in the Cartesian approach. View the Open Peer Discussion of this paper ». (shrink)

In Part 1 of this wide-ranging interview Tony Lawson first discusses his role in the formation of IACR and how he relates to the generalized use of the term ‘Critical Realism’. He then provides com...

Lakatos' MSRP is utilized to provide a response to Koertge's claim (in her ‘Does Social Science Really Need Metaphysics?’) that the heuristic significance of metaphysics has been vastly overrated. By outlining the hard cores and positive heuristics of the two major research programmes in economics (namely, the ‘orthodox’ and ‘Marxist’ research programmes), the paper demonstrates (in opposition to Koertge's claim) not only that the metaphysical statements in the respective hard cores are far from vague but also how these exert an (...) important regulative influence both on the theories and economic policy recommendations generated within the respective programmes. It also indicates how the adoption of the MSRP method of appraisal in economics would help to protect against the danger of entrenched metaphysical dogmatism with its implications not only for economic policy recommendations but also for moral and political recommendations. * We appreciate the assistance given by Professor N. Koertge, who provided us with translations of her articles, and the helpful comments of an anonymous referee. (shrink)

Ramsey's critique of Keynes's ‘logical’ approach to probability is widely regarded as decisive, and his own ‘subjective’ approach and SEU framework are now familiar tools in economics. This paper challenges the standard view of Ramsey's critique and assesses the SEU model from a Keynesian viewpoint on probability. It consists of a summary of the two theories and an evaluation of Ramsey's criticisms and alternative. The two main conclusions are that although Keynes yields to Ramsey on the question of the existence (...) of logical probability relations, the formal structure of his theory is compatible with non-objectivist interpretations of probability; and that Ramsey makes far heavier demands on the capacities of the ‘rational agent’ than does Keynes. (shrink)

In Chapter 12 of the General Theory, on “The State of Long-Term Expectation,” Keynes writes: “It would be foolish, in forming our expectations, to attach great weight to matters which are very uncertain”. In a footnote to this sentence, Keynes points out that by “very uncertain” he does not mean the same as “very improbable” and refers to the chapter on “The Weight of Arguments” in his earlier Treatise on Probability. The purpose of this article, in the first place, is (...) to provide an account of, and to sort out the relations between, Keynes's views on probability, uncertainty, and the weight of arguments. (shrink)