Critical Economic Methodology

&ULWLFDOHFRQRPLFPHWKRGRORJ\

&ULWLFDOHFRQRPLF PHWKRGRORJ\ $SHUVRQDORG\VVH\

                             !                      "     # #

$    $          

           %

$      %

  $  

$     &    #    '##

$ ( ) ) ) ) )

*          '+                            ,!     

-  + #         #  /DZUHQFH $ %RODQG  !         .  * /# 0 #        The Foundations of Economic Methodology 123456 Methodology for a New Microeconomics: The Critical Foundations 123476 The Methodology of Economic Model Building: Methodology after Samuelson 123436  The Principles of Economics: Some Lies My Teachers Told Me123356

               

    8 $


   


   

&RQWHQWV



* 2339 :  22*  &;!;  .  /. & :  53.8 $82???2  ¤23395??>     -  @   -A!1! 6! &   7KLVYHUVLRQZDVSURGXFHGLQ%XUQDE\%&&DQDGD 

#  

$      +            $   #          #       British Library Cataloging in Publication Data

    

$#      Library of Congress Cataloging in Publication Data    &       (  B         "      ' 2   C   "- 0 2=2 7=92339 ==??95C 5? 37C5327 &"!  ". ?C;2>C2=7?9C> 


   

Preface   !  (& #    Methodology’s demand and supply Outline of the book Part I Friedman’s methodology essay  2         2393 The saga of my 1979 A paper  5 & +  *23>= The usefulness of logic ‘Instrumentalism’ and the relationship between logic, truth and theories A reader’s guide to Friedman’s essay The critics On criticizing instrumentalism  = & +        The sociology of economics vs defeatist conventionalism Evidence of the hostile atmosphere Satisficing in methodology Friedman’s methodology vs conventional empiricism ‘Sound methodology’ vs ‘logically sound’ argument Popper vs conventionalist-Popper Do institutionalist economists really believe in formalism?  ; D              Friedman’s alleged inconsistencies in correspondence Limits to the history of contemporary thought


   

' 2 = >

3 22 2; 2> 24 55 53 =7 ;2 ;= ;; ;> ;4 >2 >5 >= 7= 7> 77

# Critical economic methodology  Part II Methodological criticism and neoclassical economics  > -  #        92  7 & +  '+   9; Types of criticism and the maximization hypothesis 97 The logical basis for criticism 97 The importance of distinguishing between tautologies and metaphysics 4?  9 #      4; Appraisal as criticism 4> The poverty of conventionalist methodology in economics 47 Part III Criticizing the methods of economic methodology  4 -           Knowledge and truth status: historically speaking Epistemology vs methodology: the theoretical perspective The practice of economic methodology  3 & +    # Positive economics vs what? Positivism as rhetoric What everyone seems to think ‘positive’ is Modern economic positivism is profoundly confused Positive science or positive engineering? Positive evidence about positive economics Explaining the use of the standard article format Positive success or positive failure? 2? & +       22 :    Methodology of Economics Suggestions for another revised edition Will the real Popper stand up, please! On the utility of ‘methodological appraisal’ Some suggestions 25 & +  #   Methodological pluralism vs problem-dependent methodology Diversity as non-comprehension From idiosyncratic to mainstream


   

32 35 2?? 2?7 22; 22> 227 224 252 25= 25> 259 254 2=2 2=3 2;? 2;? 2;= 2;; 2;> 2;4 2>= 2>4

Contents# Part IV Criticizing the methods of economic analysis 2= "##     Explanation as applied ‘rationality’ Individualism as a research program Individualism and eighteenth-century mechanical rationalism Unity through mechanics and universality through uniqueness Methodological individualism and unity-vs-diversity 2; & +   '  The analytical problem of price adjustment   closure of the analytical equilibrium model Toward closure through  ignorance Exogenous convergence with forced learning Endogenous convergence with autonomous learning Are the foundations complete? 2> D  +    The problem with traditional explanations of dynamic processes Time, logic and true statements Time and knowledge: the Problem of Rational Dynamics A possible solution to the Problem of Rational Dynamics Alternative solutions to the Problem of Rational Dynamics Concluding lessons 27 & +#%       Psychologism in economics: Pareto revisited Psychologism and values Explanation and psychologism Psychologism and general equilibrium Psychologism and values again Values as social conventions 29 & +        Integrating the infinitesimal Proofs vs infinity-based assumptions The axiom of choice False hopes of set theory Unrealistic discontinuities Integers vs the explanation of prices Infinite sets vs complete explanation


   

279 274 273 29? 292 295 297 299 293 242 24; 247 244 23? 232 239 233 5?? 5?9 52? 52; 527 527 524 523 55? 552 55; 55> 559 553 553 5=5 5=7 5=7

# Critical economic methodology  Inductive knowledge and infinity-based assumptions Lessons unlearned 24 & ++ +    Stylized facts in use today Criticizing stylized methodology Part V Popper and economic methodology 23 /!      Is there a Popperian legacy in economics? Criticism of Popper’s view of science Understanding Popper’s view of science Falsifiability in economics Attempts to create a Popperian legacy The rhetoric of Popper’s view of science 5? .  $    (  # !  The popular Popper The Socratic Popper Popper’s seminar and the hijacker Popper’s disciples vs Popper and the hijacker The popular Popper vs the important Popper The future of Popperian economic methodology    (&               The sociology of journal referees The intolerance of liberal-minded pluralism The hypocrisy of specialized journals The hypocrisy in matters deemed to be ideological The future of substantive methodology The imperviousness of neoclassical economics Bibliography Name index Subject index


   

5=3 5;? 5;5 5;= 5;7

5;3 5>? 5>2 5>5 5>= 5>> 5>9 57? 572 57= 574 573 59? 59> 593 54? 542 545 54= 54; 54> 549 539 =??

3UHIDFH

D       # 

    +                                    .     #  # -    "    "  

        E          

   #   $          " #   "       .#   $             "    "            "    /# F & .     23>?  F .           #        '     '

$            $  # $  

$      :$  #