September 3, 2015

What comes after the methodological Pyrrhic Wars?

Comment on Aguilar on ‘Critique of Tony Lawson on Neoclassical Economics’


One of the best examples of idiotic empiricism has been given by Bacon: “Bacon, the philosopher of science, was, quite consistently, an enemy of the Copernican hypothesis. Don’t theorize, he said, but open your eyes and observe without prejudice, and you cannot doubt that the Sun moves and that the Earth is at rest.” (Popper, 1994, p. 84)

On the other hand, one of the best examples of idiotic deductivism is to be found in economics and has been delivered by Debreu’s General Equilibrium Theory.

The horror of methodological warfare in economics is twofold:
(i) Sound empiricism, e.g. Brahe, has been played against idiotic deductivism.
(ii) Genial deductivism, e.g. Euler, Newton, Einstein, has been played against idiotic empiricism.

Unfortunately — as you have argued since 1999 — Heterodoxy has not manged to get out of this quagmire of false alternatives. To the contrary, the whole jabberwocky reincarnated as mathiness debate.*

What should be evident by now to every economist is that science is not defined by either/or but by the synthesis of sound empiricism and genial deductivism.

After the failure of Orthodoxy a paradigm shift is indispensable which consists in the replacement of the old neoclassical axioms by a new set of axioms. Heterodoxy has to secure its own foundations.

“For it can fairly be insisted that no advance in the elegance and comprehensiveness of the theoretical superstructure can make up for the vague and uncritical formulation of the basic concepts and postulates, and sooner or later ... attention will have to return to the foundations.” (Hutchison, 1960, p. 5)

Both orthodox and heterodox economics is stuck at exactly this point: no new axioms — no future.

Egmont Kakarot-Handtke

Hutchison, T.W. (1960). The Significance and Basic Postulates of Economic Theory. New York, NY: Kelley.
Popper, K. R. (1994). The Myth of the Framework. In Defence of Science and Rationality., chapter Science: Problems, Aims, Responsibilities, pages 82–111. London, New York, NY: Routledge.

* See ‘At last, mathiness problem settled

Preceding post ‘Schumpeter’s two axioms of discourse
For details of the bigger picture see cross-references Paradigm shift