⚀ F.S.C. Northrop, “The Impossibility of a Theoretical Science of Economic Dynamics,” The Quarterly Journal of Economics 56, 1 (1941), pp. 1–17.
⇉ This was suggested to me by George Machen, who often times comments on this blog; it was a good suggestion, because it was an incredibly interesting read. The main take away, as I interpret it, is that the main difference between physics and economics is that while in the former you can make universally valid statements about both general and specific properties or a ‘thing’ or event, in economics you can only make objective general statements (such as that value is subjective). Northrop’s argument is that this makes a theory of dynamics impossible. One disagreement is that while Northrop is right that this impedes accurate prediction, it doesn’t impede the establishment of general laws that explain causality (that may hypothetically occur). So, a theory of dynamics might be possible, but its application must be historical.
⚁ Karl Popper, “The Poverty of Historicism, I,” Economica 11, 42 (1944), pp. 86–103; “The Poverty of Historicism, II,” Economica 11, 43 (1944), pp. 119–137; “The Poverty of Historicism, III,” Economica 12, 46 (1945), pp. 69–89.
⇉ This is my first literary encounter with Popper, and I have mixed feelings. To some extent, the last three sections of the final article assuages some of my uneasiness, and I see that with regards to social progress I’m probably closer to Popper than I at first realized — what this means is that reading these three articles will undoubtedly guide me to a better exposition of my sociological beliefs. Nevertheless, it’s difficult for me to accept the idea that how one draws a theory doesn’t matter, what is more important is testing it and attempting to falsify it. On the one hand, I see where Popper is coming from; the progress of science requires introspective critical rationalism, and it also requires competitions of ideas (in the self and between multiple scientists). On the other hand, I find that the method of developing theories is also important in establishing scientific truth. On the whole, though, my experience is positive.
⚂ Bruce Caldwell, “A Skirmish in the Popper Wars: Hutchinson versus Caldwell on Hayek, Popper, Mises, and Methodology,” Journal of Economic Methodology 16, 3 (2009), pp. 315–324.
⇉ This is a brief piece by Caldwell describing the exchange between he and Terrence Hutchinson, regarding Hayek and Popper’s influence on the former. It’s a great introductory bibliographic reference towards future reading.
⚃ Jeffrey Friedman, “Popper, Weber, and Hayek: The Epistemology and Politics of Ignorance,” Critical Review 17, 1–2 (2005), pp. 1–58.
⇉ I’ve read this paper before, but never as closely as I’ve just done. We seen here one of the clearest expositions of radical ignorance (versus rational ignorance), which is Friedman’s response to rational choice theory (and any political theory that stresses the motivations of political actors). Everything by Friedman is worth reading, but this essay is particularly good. I do think, though — and I’m not sure if he’s responded to similar criticism before —, that his theory of ignorance, and the relation of this to piecemeal social engineering, implies a certain degree of nihilism. But, this is a criticism I’ll have to pose elsewhere.
⚄ Milton Friedman, “The Methodology of Positive Economics,” in Essays in Positive Economics (Chicago: University of Chicago Press, 1966), pp. 3–16, 30–43.
⇉ Unfortunately, I don’t own the actual book and I can’t access the complete article online, so I’m stuck reading only the first and last thirds of the article. But, this is enough to get the gist of Friedman’s argument, which I actually find somewhat persuasive in some regards. He argues that all theories necessarily abstract from some aspect of reality, and I think he’s mostly correct. However, like I write in my reaction to Caldwell’s article on Post Keynesian methodology before, I don’t think the preference for predictive over explanatory hypotheses is well grounded; rather, I think economics should seek to explain phenomena. Sometimes these explanations, which establish laws of causality, can be useful for making general, relatively short-term predictions, but this isn’t the main purpose of economic science. Finally, it also seems to me that Friedman underrates the benefits of studying the same phenomenon from different angles — i.e. different models which abstract from different realities; this is readily apparent in the classical monetarist explanation for business cycles: a scarcity of money (as opposed to this being a secondary consequence or even unimportant).
⚅ Bruce Caldwell, “Post-Keynesian Methodology: An Assessment,” Review of Political Economy 1, 1 (1989), pp. 43–64.
⇉ This is my first foray into Post Keynesian methodology, and given the age of Caldwell’s piece (23 years) I figure that it’s a bit out of date; that is, Post Keynesianism has progressed since then, including in the department of methodology. Nevertheless, he has some interesting points on Misesian a priorism, and discusses for a bit the work of Hollis and Nell (Rational and Economic Man), who try to construct an a priori economics within the classical/Marxist framework. In any case, this article by Caldwell seems more like a guideline for where Post Keynesians ought to go. I don’t agree with his conclusion that the focus should be more on a predictive science than an explanatory science, and I find some of his statements confusing (like the idea that an explanatory methodology, even if successful against the neoclassicals, would find competition by part of other schools’ alternatives — i. this is not necessarily true, and ii. if true, so what?). On the other hand, his “critical pluralist” approach seems like the best bet for anybody, like me, who doesn’t strongly or unwaveringly adhere to a particular method.