Economic crisis, economic methodology and the scientific ideal of physics

Abstract

The methodological foundations of mainstream economics have been cited as one of the main reasons for its failure to account for the economic crisis of 2008. In spite of this, the status of economic methodology has not been elevated. This is due to the persistent aversion towards methodological discourse by most mainstream economists. The anti-methodology stance has a long presence as exemplified in Frank Hahn’s (1992) work. After focusing on the debate originating after the publication of Hahn’s arguments, the paper offers a categorization of the main explanations for mainstream methodological aversion. Subsequently, it suggests an explanation based on the role of the physics scientific ideal, arguing that the endeavor to achieve the high scientific status of physics by following the methods of physics, contributed to the negative mainstream attitude towards economic methodology. The relevant writings of the extremely influential mainstream economists Irving Fisher and Milton Friedman, reinforce the assertion that the alleged hard science status of economics renders methodological discussions and especially methodological criticism, rather pointless. The paper also calls for a more systematic discussion of this issue, especially in the wake of the line of argument that links the recent failings of mainstream economics to its methodological basis.

Nietzsche, Deleuze and Guattari: performative Nietzsche, Deleuze and Guattari: performative constitution of unpayable debt in finance constitution of unpayable debt in finance capitalism capitalism

“…For economist Stavros A. Drakopoulos, mainstream economics-a term that both naturalizes neoclassical economics and justifies the dependence upon the intervention of the capitalist state-was performative with regard to the 2007/2008 crisis (Drakopoulos 2016). According to Drakopoulos the failure of mainstream economics to protect public life challenged the assumption promoted by mainstream economics that any methodological approach in the field of economics is redundant and unnecessary.…”

Economic experiments versus physical science experiments: an ontology-based approach

“…Although the ontological attributes highlighted here are separately and fragmentarily considered in the literature, the global picture we provide calls into question the current relationship between mainstream and experimental economics, where the latter is meant to reinforce the scientific credentials of the former. Our ontology-based approach warns against the use of economic experimentation as an excuse to attribute to mainstream economics an even more 'perfect' resemblance to physics (see Drakopoulos 2016). Conversely, it encourages the recognition of economics as a genuine social science and, consequently, also a broader and more committed methodological pluralism in the economic field [4].…”