“Economic Methodology: Understanding Economics as a science” – Marcel Boumans & John B. Davis
Currently reading this book for two reasons: it’s the main literature in a course I’m teaching and I like philosophy of science.
Fortunately, this book meets me where I’m at. I like the topic, but I don’t have the brain capacity now to read source material or delve into any one thinker. I want a quick and dirty history of philosophy of science in Economics.
They begin by differentiating between economic methods and methodology. “Methods” is an answer to how questions: how to use calculus techniques to explain choices that people make, how to use statistical models to estimate causal effects, etc. “Methodology” is the study of how economists answer why questions. It is the equivalent of Philosophy of science for economists.
“Logical positivism” is taken as the starting point of the discussion. It’s the movement whose view was that all scientific language is an extension of logic and that knowledge arises out of sense experience. Unless a statement is true by definition, it “should be subjected to investigation by empirical research.” Thus, statements like “This tomato is red” is meaningful, because we can see that this proposition is true, while “God created the world in six days” is not empirically verifiable—thus, scientifically meaningless.
Once we have deduced knowledge from a statement and some laws, the next question is whether this knowledge holds in all contexts and at all times. A proposition may be verifiable and found to be true through observation, but there may be an observation in the future that does not conform to this generalization. This is the problem of induction. The famous example is that it was once believed that all swans were white until in the 17th century black swans were discovered in Australia.
What economists mainly do nowadays has to do with causal inference. Logical positivism struggled to account for causal mechanisms. Let’s see where this book takes us on the road to causality