That the theory choice problem seems insolvable was a major conclusion of the last chapter. The implications of that finding may not seem readily apparent to economists untrained in philosophy. The purpose of this chapter is to relate the philosophical analysis just completed to economics. It is argued that the methodological stance assumed by most practicing economists (some variant of confirmationism or instrumentalism) does not solve the choice problem, and that the methodological approach which dominates the rhetoric of economic methodologists (falsificationism) cannot be applied successfully in economics.
In the construction and evaluation of their theories, most economists adhere to some variant of confirmationism or instrumentalism. 1 Both of these approaches emphasize the testing of theories by their predictions. They differ in that instrumentalists consider the most highly confirmed theory the most useful instrument, whereas confirmationists consider the most highly confirmed theory the most probable: that is, confirmationists do and instrumentalists do not associate strength of confirmation with some notion of truth value.
Both confirmationists and instrumentalists recognize that empirical criteria are often insufficient for unambiguous choice among competing theories. Their solution is to supplement the empirical criteria with other criteria. Such criteria can be placed into four categories. The first category includes criteria that are used to evaluate the structure and form of theories. Among many that could