Equilibrium versus Understanding: Towards the Restoration of Economics as Social Theory

The primary goal of the social sciences is to obtain organised knowledge of social reality. By the term ‘social reality’ I wish to be understood the sum total of objects and occurrences within the social cultural world as experienced by the common-sense thinking of men living their daily lives among their fellow men, connected with them in manifold relations of interaction. It is the world of cultural objects and social institutions into which we are all born…and with which we have to come to terms.

(Schütz 1977:228-9)

Taken at face value, Schütz’s statement in the epigraph to this chapter, that the purpose of the social sciences is to obtain ‘organised knowledge of social reality’, is likely to find acceptance with social scientists. The disagreements among them concern the rest of this passage and revolve around the key questions of what ‘social reality’ is, what is meant by ‘organised knowledge’, and how this knowledge is acquired. Adopting a theme of post-Wittgensteinian analytical philosophy, echoed in the views of Coddington about the language of theory as examined in Chapter 1, I have argued that the social reality which a theory can explain depends on the methodology it employs. The methodology, and its associated epistemology and ontology, is influenced by our conception of ‘organised knowledge’ which, in turn, influences what we can do with our theories.

Like Schütz, who speaks of the individual’s ‘experience’, I have argued that there is a need to include the individual’s understanding of her social world in the ‘organised knowledge’ that economists seek, for without this, we as theorists do not have a basis for explaining what people do, or why and how they do it. Because he is as much an understander as his subjects, the social scientist engages a double hermeneutic. I have also inferred from the contributions of particular neoclassical writers, who refer to ‘conjecture’ and ‘disequilibrium consciousness’, that they too recognise the

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