Ideas on Economic Science and its Method Over the Past Sixty Years
This chapter reviews the epistemological positions and new economic currents that emerged over the past 60 years, distinguishing the two phases of “economic imperialism” and “reverse imperialism”. The description of the first phase starts with Milton Frie
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Ideas on Economic Science and its Method Over the Past Sixty Years
Having sorted out the various notions of economics, its characteristics and methods, its ties to ethics, as well as the nature and reach of both models and measurements, we can understand the validity of proposals made in past years. These developments have unfolded in two phases—the first one dominated by the logic of instrumental rationality, with an emphasis on prediction rather than explanation. In this phase, economics exported its logic to the analysis of several human activities or realities, while the second phase, as described by Davis (2008, 2011), witnessed a ‘‘mainstream pluralism’’ consisting of heterogeneous currents coming from sciences outside economics (‘‘a reverse imperialism’’). Only some of these currents will be explored here. This chapter intends to provide an overview of this background and an outline of the current situation.
Phase 1: Traditional Orthodoxy For starters, a glance at Milton Friedman’s highly influential position will lead to a review of the main epistemological currents present during this phase: Popperian, Lakatosian and Post-modern. Then, Gary Becker’s research project will take us back to economics, before dealing with methodological individualism and the meaning of economic maximization.
Friedman’s Essay In 1953, Milton Friedman published his famous essay on the role and reach of economics, ‘‘The Methodology of Positive Economics,’’ establishing the scientific nature of theories’ predictive capacity and describing economics as a science modeled after a natural science. This text on the methodology of economics was likely the most influential methodological document of the twentieth century, and
R. F. Crespo, Philosophy of the Economy, SpringerBriefs in Philosophy, DOI: 10.1007/978-3-319-02648-0_7, The Author(s) 2013
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Ideas on Economic Science and its Method Over the Past Sixty Years
economists have been attracted to and have identified with its propositions, putting them into practice, ever since. Part of this section hinges on Friedman’s conceptual and methodological stance, both to introduce it and to assess the critiques that it has received, using it also as a launching pad to explain other views that emerged over the rest of the twentieth century. There is a growing epistemological and methodological debate in the field of economics,1 but economists do not need to be experts in epistemology and methodology, as these are ‘‘meta-theories’’ of what they do. Economists should, however, know where they stand, and that is why it makes sense here to address these issues in the clearest and most practical way possible, avoiding technicalities. Above all, as his title choice indicates, Friedman restricted his study to ‘‘positive economics,’’ making a distinction between this form of economics and both ‘‘normative economics’’ and ethical stances. ‘‘In short, positive economics is, or can be, an ‘objective science’, in precisely the same sense as any of the physical sciences’’ (Friedman 1953, p
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