The enduring relevance of the model Platonism critique for economics and public policy

Abstract

Abstract:The article briefly introduces Hans Albert and the basic elements of his critique of neoclassical economics as a form of ‘model Platonism’. The two most important elements of his general methodological critique of economics – namely the institutional vacuum inherent in much economic modelling and its unrealistic assumptions about behaviour – are introduced. It is argued that these specific critiques have been taken up with varying degrees of success in areas of economic research such as institutional economics and in behavioural and experimental research programmes. However, the fundamental methodological gist of his critique remains as pertinent to mainstream economics as it was when originally formulated. The influence of ‘model Platonic’ thinking remains pervasive in academia and also in public policy.

‘Model-Platonism’ in economics: on a classical epistemological critique

“…This paper had three aims: First, to illuminate, explain and systematize Albert's original critique of Model-Platonism and, second, to give some examples for the enduring relevance of these concepts in the spirit of Arnold and Maier-Rigaud (2012). The third was to provide the concept with some prospects for extension and reorientation.…”

“…Essentially, Albert's critique of neoclassical economics leads him to suggest a broadening of traditional economic theory by incorporating results from economic sociology as well as heterodox economics, especially institutionalist thought. Albert obviously shared Searle's conviction that economics is, in contrast to the natural sciences, ‘largely concerned with institutional facts’ (Searle, 2005, 1) and was, thus, alienated by ‘the institutional, motivational and cognitive vacuum within which neoclassical thinking operates’ (Arnold and Maier-Rigaud, 2012). This is evident in his original article (Albert, 2012[1963]) as well as in later publications (Albert, 1998[1967]) and goes along smoothly with Albert's pluralist attitude to scientific research in general (Albert, 1985).…”

Reciprocity as a Foundation of Financial Economics

“…Within economics, Realism is associated with Neo-classical theories that employ equilibrium and rationality and resort to ceteris paribus arguments to explain why economic facts (what is experienced) rarely conform to Neo-classical theory [Arnold and Maier-Rigaud, 2012].…”