6 - Economic methodology and philosophy of science

Summary

Most methodological writing on economics is undertaken by economists. Although the bulk is produced by lesser-known members of the profession, almost all leading economists have at one time or another tried their hand at methodological reflection. Almost everybody agrees that the results are usually poor. If one read only their methodology, one would have a hard time understanding how Milton Friedman or Paul Samuelson could possibly have won Nobel Prizes. It is less surprising that the economics profession professes such scorn for philosophizing than that its members spend so much of their time doing it.

In this chapter I am concerned with three related puzzles concerning work on economic methodology. In addition to saying something about the reasons for its current mediocrity, I address its peculiar relations to philosophy of science and the strange fact that the currently dominant views in economic methodology are drastically inconsistent with the practice of economists. The solutions to these puzzles are related, and the villains responsible for them are philosophers.

To clarify the strange relations between writing on economic methodology and work in philosophy of science and to articulate and explain the inconsistency between methodological dictum and practice, I shall offer a sketch of the history of reflection on economic methodology with a special emphasis on the recent history. We shall see that, although the literature concerning economic methodology is heavily influenced by philosophy – both current and, especially, outdated – it is cut off from philosophical discourse.