Otto Neurath on economics
19 January, 2013 at 13:17 | Posted in Economics, Theory of Science & Methodology | 1 CommentWhere does the complex of causal laws represented in a causal structure come from and what assures its survival? These laws, I maintain, like all laws, whether causal or associational, probabilistic or deterministic, are transitory and epiphenomenal. they arise from – and exist only relative to – a nomological machine …
The founders of econometrics, Trygve Haavelmo and Ragnar Frisch … both explicitly believed in the socio-economic machine … Consider Haavelmo’s remarks about the relation between pressure on the throttle and the acceleration of the car. This is a perfectly useful piece of information if you want to drive the car you have, but it is not what you need to know if you are expecting change. For that you need to understand how the fundamental mechanisms operate …
Otto Neurath expressed the view clearly before the First World War in criticising conventional economics. Standard economics, he insisted, makes too much of the inductive method, taking the generalisations that hold in a free market economy to be generalisations that hold simpliciter: ‘Those who stay exclusively with the present will soon only be able to understand the past.’
Nancy Cartwright The Dappled World
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Neoclassical economics was developed to mimic 19th century classical physics. Since then the social sciences have shown that such as view is untenable. Social systems, especially large and intricate ones like modern societies, including their economies, are complex adaptive systems in which reflexivity and emergence play key roles.
Comment by Tom Hickey— 19 January, 2013 #