Functional explanation in economics: a qualified defence

Abstract

Economists seldom make explicit use of functional explanation, although they sometimes use it implicitly. Functional theorising has lost favour among social scientists in recent years, and few are now willing to adopt functional language. This paper argues that, despite some drawbacks, explicit functional methods have several attractive features, including a pluralistic attitude to causality, an awareness of stratification and emergence, and a compatibility with a realist perspective. Functional methods on their own cannot provide full causal explanations, but they can raise important theoretical issues often neglected in mainstream economics.

Complex causal structures of neighbourhood change: Evidence from a functionalist model and yelp data

“…The consequence, "maintaining social standing," is hypothesized to be the cause of the social arrangement, "guard stations." While functional explanation has been characterized as "what any science does" [21], it has largely fallen out of favour in social science [22]. There are several common criticisms [23].…”

“…These include charges that functionalist explanations assume overarching goals shared by entire social systems, thereby denying the possibility of social conflict -functional unity; that all social entities, if they exist, must therefore serve some (possibly latent) social function, leaving the researcher free to posit functions even for random or contingent arrangements -universal functionalism; and that some functions, usually served by traditional institutions, are so important that they cannot be altered, fostering unwarranted complacency and conservatism -functional indispensability. These criticisms were widespread through the 1960s and 1970s, and were especially potent when directed against Parsonian structural-functionalism and its anthropological cousins [22]. They persist today [24], even as functional explanation is less frequently advanced, at least explicitly.…”

“…From Marx and Engels' claim that, under capitalism, governments exist to serve the interests of the bourgeoisie, to more recent arguments by Pierre Bourdieu that social connections and cultural attainment do so as well, critical theorists have made strong claims about how the purported functions of various social arrangements perpetuate their existence [27,28]. For these and similar reasons, recent philosophers and theorists of social science have offered "qualified defences" of functional explanation [22,26,28].…”

“…The difficulty of avoiding functional explanation is evident in the fact that, despite its bad reputation, social scientists routinely use functional motifs in their accounts of social life. Jackson [22] shows their ubiquity in economic theory. In our review of the literature on neighbourhood change, we found numerous examples as well [29,30,31,32,33,34,35,36,37,38,39].…”

3Es for AI: Economics, Explanation, Epistemology

“…In addition to the examples of well-known economists, there are several other economists who have explicitly alluded to the nature of explanation within the discipline at different times 3 : for instance, Brennan ( 1979 , p. 920) to attempt reconciliations between opposing sides on the role of fact-value or positive-normative divides “to recognize the necessity of teleology in explanation but the inability of pure empiricism to determine human purposes”; Puu ( 1969 ) to distinguish and elaborate upon the nature of teleological and causal explanations in specific areas of economics; Guala and Salanti ( 2001 ) to discuss the reliance upon the rational choice model even by experimental economists; Kincaid ( 2012 ) to provide a discussion of issues surrounding explanation in different sub-fields of economics; Johnson ( 1996 ) to consider deductive vs. inductive reasoning in neoclassical and institutional economics; Marchionni ( 2017 ) to offer a categorization of the problems in model-based explanations and discuss their relationship to the method or to the nature of the field; Jackson ( 2002 ) to provide a qualified defense of functional explanation in economics. Lawson ( 1997 , 2008 ) bears special mention for his advocacy of the use of contrastive explanations (later contrast explanations) since the social world is an open system where modus ponens/tollens (inferences, if A, then B to affirm or deny) regularities are not properly ascertainable.…”