Academic journal article Review of Social Economy

Is Gerard Debreu a Deductivist? Commentary on Tony Lawson's 'Economics and Reality.'

Academic journal article Review of Social Economy

Is Gerard Debreu a Deductivist? Commentary on Tony Lawson's 'Economics and Reality.'

Article excerpt

Tony Lawson's argument that mainstream economics is at bottom deductivist is one of the most exciting aspects of his work. Since what it is that neoclassical theory is actually about is a matter of bafflement to many, and not just economic methodologists, Lawson's thesis that what above all constitutes economic theory is an inappropriate methodology, as opposed to some particular understanding of its subject matter, gives one a sense that he has expressed something that one was intuitively suspecting for a long time, but never managed to reason all the way through. Still, there is more than one way that one can understand deductivism, and Lawson chooses one particular way, understanding it as a set of doctrines advocated by the logical empiricists. In this commentary, I will explore another understanding of this doctrine, one which does not tie it so closely to logical empiricism, and which places more emphasis on its formalist aspect, as opposed to its preoccupation with putative laws.

Lawson is quite clear about wherein lies the root of mainstream theory's difficulties in somehow "latching on to" the processes and structures that constitute the workings of the actual economy:

The main "culprit", I shall argue, is a mode of explanation that can be referred to as deductivist, or, more particularly, it is the conception of "laws" (or "significant results" or "theoretical formulations") upon which deductivist explanation ultimately depends.

This conception of laws is formulated in terms of constant conjunctions of events or states of affairs. It is an interpretation of laws as, or as dependent upon, constant relations connecting outcomes at the level of the actual course of events or states of affairs. On this view, laws, which are often referred to as "covering laws," express regularities of the form "whenever event x then event y". . . . In practice, the noted perspective on laws is usually associated with the principle that such laws are to be assessed (confirmed, corroborated, falsified, tested) by their instances. By deductivism I simply mean the collection of theories (of science, explanation, scientific progress, and so forth) that is erected upon the event regularity conception of laws in conjunction with the just noted principle of theory assessment. . . .

We can note, parenthetically, that this theory of explanation is also variously known as the covering law model . . . the deductive-nomological model . . . or D-N model for short, amongst other things.

(Lawson 1997: 16-17)

Lawson goes on to illustrate how deductivism works by applying Hempel's D-N model to an explanation for why a car's radiator contained ice one morning, after which he notes, "I do not think that it is contentious to observe that deductivism so understood, and in particular the conception of laws which underpins it ..., characterizes contemporary mainstream economics" (1997: 18).

As Lawson makes clear, central to the D-N model is the idea that in addition to the initial conditions, what does the explaining (i.e., what serves as the explanans) is one or more laws, that is, propositions of the form "if x, then y" that are held to be universally true over the range of reference of their terms. Now, it is interesting to consider this characterization of the practice of theoretical economists in relation to a distinction noted by an MIT theoretical economist, Frank Fisher. Fisher observes that

In fairly broad terms, there are two styles of theory in economics. I shall refer to these as "generalizing theory" and "exemplifying theory," respectively. They both have very important uses.

Generalizing theory proceeds from wide assumptions to inevitable consequences. It speaks in terms of what must happen, given the background circumstances. Good examples here involve general equilibrium. In that area, existence theory or, perhaps even better, the two welfare theorems give broadly (but, of course, not universally) applicable results. …

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