by From Lars Syll We are all realists and we all — Mäki, Cartwright, and I — self-consciously present ourselves as such. The most obvious research-guiding commonality, perhaps, is that we do all look at the ontological presuppositions of economics or economists. Where we part company, I believe, is that I want to go much further. I guess I would see their work as primarily analytical and my own as more critically constructive or dialectical. My goal is less the clarification of what economists are doing and presupposing as seeking to change the orientation of modern economics … Specifically, I have been much more prepared than the other two to criticise the ontological presuppositions of economists—at least publically. I think Mäki is probably the most guarded. I think too he is the least
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from Lars Syll
We are all realists and we all — Mäki, Cartwright, and I — self-consciously present ourselves as such. The most obvious research-guiding commonality, perhaps, is that we do all look at the ontological presuppositions of economics or economists.
Where we part company, I believe, is that I want to go much further. I guess I would see their work as primarily analytical and my own as more critically constructive or dialectical. My goal is less the clarification of what economists are doing and presupposing as seeking to change the orientation of modern economics … Specifically, I have been much more prepared than the other two to criticise the ontological presuppositions of economists—at least publically. I think Mäki is probably the most guarded. I think too he is the least critical, at least of the state of modern economics …
One feature of Mäki’s work that I am not overly convinced by, but which he seems to value, is his method of theoretical isolation (Mäki 1992). If he is advocating it as a method for social scientific research, I doubt it will be found to have much relevance—for reasons I discuss in Economics and reality (Lawson 1997). But if he is just saying that the most charitable way of interpreting mainstream economists is that they are acting on this method, then fine. Sometimes, though, he seems to imply more …
I cannot get enthused by Mäki’s concern to see what can be justified in contemporary formalistic modelling endeavours. The insights, where they exist, seem so obvious, circumscribed, and tagged on anyway …
As I view things, anyway, a real difference between Mäki and me is that he is far less, or less openly, critical of the state and practices of modern economics … Mäki seems more inclined to accept mainstream economic contributions as largely successful, or anyway uncritically. I certainly do not think we can accept mainstream contributions as successful, and so I proceed somewhat differently …
So if there is a difference here it is that Mäki more often starts out from mainstream academic economic analyses accepted rather uncritically, whilst I prefer to start from those everyday practices widely regarded as successful.
Tony Lawson and Uskali Mäki are both highly influential contemporary students of economic methodology and philosophy. Yours truly has learned a lot from both of them. Although to a certain degree probably also a question of temperament, I find Lawson’s critical realist critique of mainstream economic theories and models deeper and more convincing than Mäki’s more ‘distanced’ approach. Mäki’s detached style probably reflects the fact that he is a philosopher with an interest in economics, rather than an economist. Being an economist it is easier to see the relevance of Lawson’s ambitious and far-reaching critique of mainstream economics than it is to value Mäki’s often rather arduous application of the analytic-philosophical tool-kit, typically less ambitiously aiming for mostly conceptual and terminological ‘clarifications.’
The field of economics has long been hailed as a bastion of rationality and objectivity, offering insights into the workings of present-day complex economic systems. However, questions about the foundations of economics and its prevailing methodological approach. have to be raised. My own critique challenges traditional assumptions and argues for a more pluralistic and realistic understanding of economic phenomena.
• The problem of formalism
One of my key criticisms centres around the excessive reliance on formal models and mathematical abstractions within mainstream economics. The discipline’s preoccupation with mathematical rigour often leads to a detachment from real-world complexities, rendering economic models divorced from actual human behaviour. Economists should embrace a more open-ended approach that acknowledges the limitations of formalism and places a greater emphasis on empirical observations and qualitative analysis.
• Assumptions and simplifying idealizations
Many of the assumptions and simplifying idealizations that underpin mainstream economic models — perfect rationality, market efficiency, and equilibrium — do not accurately reflect the messy realities of human decision-making and market dynamics. Economists have to have a more nuanced understanding of human behaviour that acknowledges the presence of bounded rationality, social norms, and institutional constraints. By incorporating these factors, economic models can better capture the complexities of economic systems.
• Pluralism and interdisciplinarity
Economics should embrace a more pluralistic approach, drawing insights from various disciplines such as sociology, psychology, history, and ecology. By integrating diverse perspectives, economists can develop a richer understanding of economic phenomena and avoid the pitfalls of narrow and reductionist thinking. Complex problems require holistic and multidimensional approaches.
• Policy implications
Overlooking real-world complexities and relying on overly simplified models — typical of mainstream economics — can lead to seriously misguided policy prescriptions. A more context-sensitive and pragmatic approach to policy-making — taking into account the specific institutional, cultural, and historical factors at play — is needed. This shift in policy orientation can lead to more effective interventions and address the concerns of more or less marginalized communities that are often excluded from mainstream economic discourse.
• Advancing the discipline
While mainly posing challenges to the foundations of mainstream economics and the severe real-world limitations of its methodology, my critique also provides an opportunity for the discipline to evolve and grow. By embracing a more pluralistic and realistic framework, economics can address the criticisms and broaden its analytical toolkit. This would involve reevaluating many of the standard approaches, fostering interdisciplinary collaborations, and promoting critical engagement with alternative heterodox economic theories. Challenging the dominance of deductive-axiomatic formalism and advocating for a pluralistic approach, do also create space for a more realistic and nuanced understanding of economic phenomena. While my critique of mainstream economics and its underlying methodology is often — as is Mäki’s and Lawson’s — met with resistance, it is necessary if we want to be able to reimagine economics as a discipline that is more in tune with the complexities of the real world and better equipped to tackle the pressing social and economic challenges we face today.