Academic journal article Review of Social Economy

Developments in Economics as Realist Social Theory

Academic journal article Review of Social Economy

Developments in Economics as Realist Social Theory

Article excerpt

Social theory explicitly committed to elaborating the nature of social being and/or how we access social reality is experiencing something of a revival in economics.(1) The papers collected below can all be counted as contributing to this trend. In fact they all in some way connect with a specific social theory project of the sort in question, one that has been systematized within economics as critical realism.(2) Under this head, numerous results, arguments, conjectures, and critiques have been produced in recent years,(3) and the papers included below aim to take some of these specific developments further.(4) My own object in this introduction is merely to facilitate the contributions which follow: to outline something of their context and to sketch certain basic ideas and results they treat as "given," that are taken as sufficiently well grounded (if of course always corrigible) premises.


Within economics critical realism has taken the role of underlaborer for a more fruitful approach to scientific explanation (Lawson, Peacock and Pratten 1996). In this it has been both critically explanatory (of the existing situation in economics) and in varying degrees developmentally constructive (in elaborating an alternative perspective). In the following paragraphs, as in the ordering of the papers included below, the move is from the (more) critical to the (more) constructive moment.

One basic object of critical realism in economics has been to identify the basic nature and error of mainstream economics. Most critics of the mainstream project have, in attempting to characterize it, isolated particular substantive claims, such as theories of rationality, or of equilibrium. It has been the contention of critical realism, in contrast, that it is at the level of method that its essence lies. In fact the insight that it is not substantive theory that defines the project is clear enough once we recognize that, despite the mainstream project being widely regarded as persisting, specific substantive theories come and go, often with some rapidity. Even the cherished conceptions of rationality and of equilibrium have been dispensed with in recent contributions regarded as central to the mainstream (see Lawson 1997: chapter 8). Yet through all its transformations and apparent metamorphoses the essential method of mainstream economics has been found to remain constant. It is this, then, that must be taken as the most central and defining feature of the mainstream project.(5)


The method of the mainstream project which, according to critical realist analysis, is both its essence and its error is, briefly put, closed system modeling. This is an error in that the social world appears to be quintessentially open and not susceptible to scientifically interesting local closures. By a closed system here I simply mean situations in which regularities of the form "whenever event (or state of affairs) x then event (or state of affairs) y" occur. Methods of analysis, including modes of explanation, which are formulated on the presupposition that elaborating regularities of this form or structure are at least necessary in science(6) can be labeled deductivist. It is deductivism so interpreted that, it has been shown elsewhere (Lawson 1997), characterizes mainstream economics and which, in an open social system, is the essential error of modern economics.

Now it does not follow that because deductivism is a mistake, science and explanation are thereby impossible. Rather the latter need to be more adequately conceptualized. An important observation here is that event regularities of the sort presupposed in deductivism actually occur only under rather specific conditions. In fact outside astronomy event regularities of interest in science usually occur only in conditions of experimental control. Once this is recognized it is easily seen that any conception which ties science to activities involving the elaboration of event regularities serves systematically to fence off science from most of the goings on in the world. …

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