WORLDVIEWS THAT gain traction tend to be comprehensive in nature. They account for a wide range of phenomena that define the human condition, one of which being the changes that occur to society over time. This is true also for capitalism as an extensive body of thought. Although there is much emphasis placed on the modern epoch that features the rise of the industrial nation in the West, the weltanschauung of capitalism does supply a neat story of human development that extends back to earlier periods.
The obvious source for this narrative is to be found in the writing of Adam Smith. Having been rightly credited as the father of capitalism, Smith has contributed much to the overall coherence of the market system by reinforcing it with a supportive philosophical foundation. In fact, his narrative of the past, which is still being circulated in contemporary textbooks and popular discourse, has not only rationalized the ascent of market forces in 18th century Europe, it also validated the major assumptions that undergird orthodox economic thinking today.
Continue reading “No Go from the Get Go: Adam Smith’s Bad History, Lessons from Ancient Greece, and the Need to Subsume Economics”…
By Johnny Fulfer
Illustration by Heske van Doornen.
Is economics a science? Could it be? Should it be? The debate is as alive today as it was in the early 20th century. This article reviews some of the key arguments in the discussion and provides a helpful backdrop against which to rethink the purpose of economics today.
In 1906, the influential American Irving Fisher argued that economics is no less scientific than physics or biology—all three aim to discover “scientific laws.” While they may not always be represented in reality, Fisher argued that scientific laws are fundamental truths in nature. Newton’s first law of motion, for instance, cannot be observed. Only if certain circumstances were met, a body would move uniformly in a straight line. Fisher concluded that the same holds true for economics.
But not everyone agreed. The discipline of economics was charged with unsound methods. Specifically, economists were accused of using the deductive method without the necessary level of precision. Jacob Hollander addressed the charges in a 1916 essay, arguing that scientific inquiry involves uniformity and sequence. Progression in science relies on the formation of hypotheses, which may at some point become ‘laws.’ Observation and inference are the first steps toward the creation hypotheses. The final step in the scientific process is verification, which is required before we move from theory to law. Without verification, he argued, “speculation is an intellectual gymnastic, not a scientific process.”
Continue reading “ECONOMICS AS A SCIENCE?”…