Tony Lawson on economics and social ontology

22 Apr, 2021 at 14:27 | Posted in Economics | 3 Comments

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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

largepreviewIt is — sad to say — as relevant today as it was twenty-five 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!

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-five years ago. It still is.

3 Comments »

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  1. Lawson is not saying that mathematical model making should necessarily be abandoned.
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    He is saying that the appropriate tools should be used for the task at hand.
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    However, he (and Lars) never explains what tools there are available and when and where they should be used.
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    Lawson and Lars are pointing out the obvious but cannot say how economic systems should be studied and understood.
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    It maybe that the way economists go about this task is the only means of going about the task.
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    If there were alternative ways of understanding economic processes surely after over 200 years of theorizing someone would have discovered them.
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    Given the nature of economic processes, it may be that the available tools in the toolkit are all we have and all we can say is that some are better than others, even though all of them are imperfect.

  2. In 5 or 6 years of reading this blog I have never clearly understood what Lars and Lawson have meant by ontology in the current context.
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    Lawson explicitly defined his use of the term in the video.
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    By it he means: taking account of what we are dealing with.
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    Finally and thankfully.

    • Economic Ontology = specification of a conceptualization set-of-concept-definitions – in some area of interest and the relationships that hold among them which is an abstract, simplified view of the world that we wish to represent for some purpose, explicitly or implicitly …

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      In my own short hand, amends, its a means of communication that is independent of the symbol-level representation used internally by an agent in which others can ascribe too, in determining frameworks/methodology in achieving an outcome.

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      Per se I could argue that past frameworks/methodology lack the cultural nuances imbibed that conflict with such distinctions and how currant orthodoxy has played out in an ever shifting and evolving economic paradigm.


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