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.

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)

The books’ goal is to answer the question: Do the weaknesses of value-free economics imply the need for a paradigm shift? The author synthesizes criticisms from different perspectives (descriptive and methodological). Special attention is paid to choices over time, because in this area value-free economics has the most problems. In that context, the enriched concept of multiple self is proposed and investigated. However, it is not enough to present the criticisms towards value-free economics. For scientists, a bad paradigm is better (...) than no paradigm. Therefore, the author considers whether value-based economics with normative approaches such as economics of happiness, capability approach, libertarian paternalism, and the concept of multiple self can be the alternative paradigm for value-free economics. This book is essential reading to everyone interested in the current state of economics as a discipline. (shrink)

This article addresses some recent tendencies in economic methodology defined as a philosophy of science for economics. I review the problem of normative/positive distinction in methodology and argue that normativity in its past forms is intolerable today but is, at the same time, indispensable for methodological inquiry. Using recent texts by Mirowski and Nik-Khah and by Alexandrova and Northcott on the applications of auction theory as a case study, I compare in more detail various approaches to economic methodology inspired by (...) the science and technology studies (STS) and philosophy of science literatures, respectively. On the basis of this comparison, I show that the STS programme in economic methodology may prove fruitful in the future, but there is still a place for more aprioristic philosophical thinking. Methodology and history of economics also play a fundamental role that goes beyond the descriptive analysis of STS and offer conceptual clarification paired with normative concerns provided by philosophers of science. (shrink)

This paper is part of the general debate about the need to rethink economics as a human discipline using a heuristic to describe its object, about the need to explicitly reject the positivistic approach in neoclassical economics, and about the urgency to adopt a different methodology, grounded on a realistic set of initial assumptions able to cope with the complexity of the decision making process. The aim of this paper is to show the use of Occam's razor in the economic (...) debate around realism in economic modelling. Occam's razor can be intended as a principle of logic that emphasises simplicity, or as a heuristic tool that emphasises parsimony. Neoclassical economists, such as Samuelson, have explicitly used Occam's razor as a logical principle to highlight the strict logic and simplicity of neoclassical economics; neoclassical models, however, are based on unrealistic assumptions. Some approaches of heterodox economics, au contraire, have used Occam's razor as a powerful heuristic tool to emphasise parsimony, building up models grounded on realistic initial assumptions and capable of embedding complexity into the general explanation of economic behaviour, as in Simon's bounded rationality (1955; 1957) and Hayek's notion of human rationality (1948; 1952; 1974) and cultural and social evolution (1967; 1978). (shrink)

Selection explanations explain some non-accidental generalizations in virtue of a selection process. Such explanations are not particulaizable - they do not transfer as explanations of the instances of such generalizations. This is unlike many explanations in the physical sciences, where the explanation of the general fact also provides an explanation of its instances (i.e. standard D-N explanations). Are selection explanations (e.g. in biology) therefore a different kind of explanation? I argue that to understand this issue, we need to see that (...) a standard D-N explanation of some non-accidental generalization (al Fs are Gs) may also ipso facto explain its contrapositive (all non-Gs are non-Fs), but the explanation is particularizable with respect to the former but not to the latter. This can be seen by noting that the Raven Paradox counterexample to the H-D model of confirmation also generates a counterexample to the D-N model of explanation (all ravens are black does not explain why the non-black shoe is a non-raven). In such cases it is natural to take the generalization with the positive predicates to have a particularizable explanation. However, this need not be the case, and in selection explanations it is the generalization with the positive predicates whose explanation is no particularizable. Thus there is no need to suppose that selection explanations are fundamentally different. (shrink)

This paper contributes to the philosophical accounts of generalisation in formal modelling by introducing a conceptual framework that allows for recognising generalisations that are epistemically beneficial in the sense of contributing to the truth of a model result or component. The framework is useful for modellers themselves because it is shown how to recognise different kinds of generalisation on the basis of changes in model descriptions. Since epistemically beneficial generalisations usually de-idealise the model, the paper proposes a reformulation of the (...) well-known distinction between abstraction and idealisation. A reformulated notion of abstraction is needed because the extant accounts yield wrong judgments when model-modifications introduce implicit assumptions. (shrink)

This paper provides a conceptual framework that allows for distinguishing between different kinds of generalisation and applicability. It is argued that generalising models may bring epistemic benefits. They do so if they show that restrictive and unrealistic assumptions do not threaten the credibility of results derived from models. There are two different notions of applicability, generic and specific, which give rise to three different kinds of generalizations. Only generalising a result brings epistemic benefits concerning the truth of model components or (...) results. Abstracting the model and applying the model into new systems are not intrinsically epistemically beneficial in this way. The Dixit-Stiglitz model of monopolistic competition is used as an illustration. (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)