Social ontology and the irrelevance of economics

8 Apr, 2019 at 09:59 | Posted in Economics | 13 Comments

Modern economics has become increasingly irrelevant to the understanding of the real world. In his seminal book Economics and Reality (1997), Tony Lawson traced this irrelevance to the failure of economists to match their deductive-axiomatic methods with their subject

largepreview It is — sad to say — as relevant today as it was twenty years ago.

It is still a fact that within mainstream economics internal validity is everything and external validity nothing. Why anyone should be interested in that kind of theories and models is beyond imagination. As long as mainstream economists do not come up with any export-licenses for their theories and models to the real world in which we live, they really should not be surprised if people say that this is not science, but autism!

Studying mathematics and logic is interesting and fun. It sharpens the mind. In pure mathematics and logic, we do not have to worry about external validity. But economics is not pure mathematics or logic. It’s about society. The real world.

Economics and Reality was a great inspiration to yours truly twenty years ago. It still is.


  1. Sadly, the book sells for over $70 on Amazon. Will never pay that much to read it. Even the digital is that much or more. Corrupt. Simply corruption in the market.

    • That’s outrageous — especially since that is a book EVERY economist ought to have read!

      • Maybe all economists are rich?

      • The Japanese is ~$90. Amazon is a monopoly. That might explain one possible reason.

      • Good news is I was able to download psf via Lewis’s post below. I don’t get it though, is this legal and why are books that are free so expensive elsewhere?

    • you can get it used on Amazon for about $40 and new for about $50 if you use alternative sellers

      • Thanks Bill, for some reason when I looked on Amazon I didn’t see any $40 version. I will look again. If you have a link that would be nice.

      • I checked again. No $50 price for me. I have a hunch Amazon is sneakily applying special pricing or something with its algorthm. If you would get a link I would love to see it. Nothing under $70 for me.

  2. I have had it in my ‘wish list’ for a long time hoping it would somehow become reasonably priced, but I think Amazon is running an algorythm that keeps that from happening.

  3. You can get this book (and very many other books) for free in less than 30 seconds, from the Z-Library, “the world’s largest ebook library”.
    You may have to register, which is easy and free, and then search from
    However, this book, like the other writings of critical realist philosophers, is philosophical gobbledygook, totally unsuitable and useless for economists.
    Most ordinary folk and scientists, enjoy a “Natural Ontological Attitude” (NOA), unencumbered by philosophical conundrums.
    NOA accepts the truths and findings of commonsense and science, and it insists that no philosophical additions are legitimate, and none are required. “Realism is dead”.
    See Arthur Fine’s book “The Shaky Game” chapter 7:
    & his article “Unnatural Attitudes” in Mind 1986:

    • Thanks for the source, will ignore your hogwash and gobbledygook nonsense about philosophy 😉

    • Wow, what a source! Z-Library is great. So many thanks for posting that link!

  4. It is not just philosophers who reject the “critical realism” of Lawson, Bhaskar and Prof. Syll.
    MMT’s Bill Mitchell opposes “the view by so-called Post Keynesian realists who eschewed any serious empirical work in economics on the grounds of fundamental uncertainty”.
    “Understanding what the T in MMT involves”

    Mitchell argues:
    “When we undertake empirical research in economics using the techniques derived from mathematical statistics and econometrics we are not searching for truth but congruency with the data.
    Congruency means that an explanation is currently the tentatively most adequate in terms of helping us understand the dynamics of the data of the real world.
    … econometric research and practice is a necessary part of a paradigm which ultimately emphasises policy intervention.
    …If you take the fundamental uncertainty line to its logical conclusion you end up with a nihilism, which would appear to be at odds with an interventionist policy emphasis.
    Fundamental uncertainty only prevents us from ever discovering, knowingly, the truth and therefore the best solution.
    As a result, people and institutions thus search for adequate solutions to their problems. In the institutionalist literature this has been called satisficing. When we discuss satisficing the role of rules of thumb and habits emerges.
    It is not the existence of uncertainty which is important, but rather the ways in which people in the economy deal with its existence.
    So when I talk about predictive accuracy, I’m not talking about knowing the future or establishing truth. Rather, I’m talking about congruency.”

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