Heterodoxy: Promising or hopeless?
Edward Fullbrook has undertaken the task of distilling from numerous contributions to the real-world economics review a synopsis of the core tenets of present-day Heterodoxy (2013, p. 129). This is a good thing. However, he unfortunately characterizes a motley of opinions as NPE, New Paradigm Economics. There exists at the moment nothing that deserves the title of a heterodox paradigm in the sense of Kuhn. What is more, Kuhn has argued “that there are no, nor can there be any, paradigms in the social sciences.”
What we have before us resembles more a manifesto than anything else. The first item in the compilation, "pluralism (as in modern physics)," confirms this impression.
A paradigm/theory/model makes assertions about the world (is deterministic, consists of atoms, expands inflationary, etcetera) or parts of it (society consists of antagonistic classes, of utility maximizing individuals, is ruled by an invisible hand, etcetera) and implicitly or explicitly insists that this view is the correct one. A paradigm/theory/model without a truth claim is a contradiction in terms.
Hence pluralism is a meta-claim that cannot be used by any specific paradigm. Heterodoxy is not the arbiter and by no means in the position to decide that, for example, classical, Marxian, neoclassical or Keynesian approaches are, in the name of pluralism, legitimate constituents of economics – understood as a science. Just like astrology, geo-centrism, or creationism cannot claim to be part of a pluralistic physics or biology. Note that Dawkins refuses to discuss with creationists about evolution, and physicists are not very much inclined to dispute about perpetual motion machines. Science constitutes itself by proper demarcation from nonscience (cf. Popper, 1980, p. 34).
Physics is pluralist at the cutting edge of research as long as the matter has not been settled according to accepted criteria (logical and material consistency, cf. Klant, 1994, p. 31). There is no pluralism, though, with regard to the Law of the Lever. To compare economics, which has not yet got hold of something analogous to the Law of the Lever, with cutting edge physics is preposterous. Confusion cannot be legitimized as pluralism.
The defining characteristic of Heterodoxy is, trivially, the rejection of the neoclassical approach. The rejection is borne either by a well-founded conviction or at least the distinct feeling that there must be something better. Hence Heterodoxy epitomizes the promise to eventually come up with a superior alternative. This is what makes Heterodoxy attractive. In Lakatos's terms, Heterodoxy is to be understood as the progressive research programme and Orthodoxy as the degenerate research programme.
Heterodoxy therefore consists of a destructive and a constructive part. However, both parts are not symmetric:
... there is more agreement on the defects of orthodox theory than there is on what theory is to replace it: but all agreed that the point of the criticism is to clear the ground for construction. (Nell, 1980, p. 1)
Heterodoxy was very successful with clearing the ground (cf. Fullbrook, 2004; Keen, 2011) but it cannot be said that it was equally successful with construction:
There is no alternative that is so obviously superior that it would justify everyone abandoning the current orthodoxy. (Hausman, 1992, p. 255)
To explain this unacceptable Orthodox/Heterodox cliffhanger at least in part it is useful to study New Paradigm Economics in more detail. The methodological comment starts with a noncontroversal assertion:
Whether you can observe a thing or not depends on the theory which you use. It is theory which decides what can be observed. (Einstein, quoted in Fullbrook, 2013, p. 130)
However, this consensus is immediately contradicted in Section 3 with the assertion that Heterodoxy “priorizes the empirical over apriorism.” Einstein, to be sure, was as clear as possible that this is the wrong priority:
... any attempt logically to derive the basic concepts and laws of mechanics from the ultimate data of experience is doomed to failure. (Einstein, 1934, p. 166)
This is exactly what J. S. Mill said with regard to economics:
Since, therefore, it is vain to hope that truth can be arrived at, either in Political Economy or in any other department of the social science, while we look at the facts in the concrete, clothed in all the complexity with which nature has surrounded them, and endeavour to elicit a general law by a process of induction from a comparison of details; there remains no other method than the à priori one, or that of “abstract speculation.” (Mill, 2004, p. 113-114)
Being apriorists, Mill and Einstein on the other hand never denied the crucial role of the empirical:
Experience can of course guide us in our choice of serviceable mathematical concepts; it cannot possibly be the source from which they are derived; experience of course remains the sole criterion of the serviceability of a mathematical construction for physics, but the truly creative principle resides in mathematics. In a certain sense, therefore, I hold it to be true that pure thought is competent to comprehend the real, as the ancients dreamed. (Einstein, 1934, p. 167)
Is there any indication that physicists will abandon the deductive method in the future and instead turn to pluralism?
Some day, when physics is complete and we know all the laws, we may be able to start with some axioms, and no doubt somebody will figure out a particular way of doing it so that everything else can be deduced. (Feynman, 1992, p. 50)
Was Einstein blind to the pitfalls and limitations of the deductive method which indeed have stymied the neoclassical approach?
If then it is the case that the axiomatic basis of theoretical physics cannot be an inference from experience, but must be free invention, have we any right to hope that we shall find the correct way? (Einstein, 1934, p. 167)
Conventional economists have not found the correct way. This misfortune is not attributable to the deductive method but to its inept application.
As always when they are clueless, economists turn to physics (Mirowski, 1995), and, again and again, they miss the point. Heterodox economists are no exception, they start with a methodological assertion about the inevitable theory-ladenness of observation and end with this:
... progress entails a movement away from faith-based to empirical-based economics. (quote from Fullbrook, 2013, p. 130)
What is here negatively characterized as faith-based has been positively characterized by Einstein as freely invented axiomatic basis. Real progress, therefore, would entail that the neoclassical axioms be fully replaced by heterodox axioms. This is a constructive task that amounts to a paradigm shift in the original sense.
... at no stage of scientific development do we begin without something in the nature of a theory, ... (Popper, 1960, p. 134)
And each theory starts with axioms — this holds also for Heterodoxy.
The impression from the NPE compilation is that Edward Fullbrook is currently too much occupied with a rather hopeless rearguard of Heterodoxy:
Many people have a passionate hatred of abstraction, chiefly, I think, because of its intellectual difficulty; but as they do not wish to give this reason, they invent all sorts of others that sound grand. They say that all reality is concrete, and that in making abstractions we are leaving out the essential. ... Those who argue in this way are, in fact, concerned with matters quite other than those that concern science. (Russel, 1961, p. 626)
An axiomatized approach is not necessarily true, but an unnaxiomatized approach is certainly false. A paradigm manifests itself in the set of axioms. There is no such thing as a new heterodox paradigm. Heterodoxy is one crucial step ahead of Orthodoxy, that is much but it does not suffice.
Einstein, A. (1934). On the Method of Theoretical Physics. Philosophy of Science, 1(2): 163–169. URL
Feynman, R. P. (1992). The Character of Physical Law. London: Penguin.
Fullbrook, E. (Ed.) (2004). A Guide to What’s Wrong With Economics. London: Anthem.
Fullbrook, E. (2013). New Paradigm in Economics. real-world economics review, 65: 129–131. URL
Hausman, D. M. (1992). The Inexact and Separate Science of Economics. Cambridge: Cambridge University Press.
Keen, S. (2011). Debunking Economics. London, New York, Ny: Zed Books, rev. edition.
Klant, J. J. (1994). The Nature of Economic Thought. Aldershot, Brookfield, VT: Edward Elgar.
Mill, J. S. (2004). Essays on Some Unsettled Questions of Political Economy, chapter On the Definition of Political Economy; and the Method of Investigation Proper to It., pages 93–125. Electronic Classic Series PA 18202: Pennsylvania State University. URL. Online-version URL
Mirowski, P. (1995). More Heat than Light. Cambridge: Cambridge University Press.
Nell, E. J. (1980). Growth, Profits, and Property, chapter Cracks in the Neoclassical Mirror: On the Break-Up of a Vision, pages 1–16. Cambridge, New York, NY,
Melbourne: Cambridge University Press.
Popper, K. R. (1960). The Poverty of Historicism. London, Henley: Routledge and Kegan Paul.
Popper, K. R. (1980). The Logic of Scientific Discovery. London, Melbourne, Sydney: Hutchison, 10th edition.
Russel, B. (1961). The Basic Writings of Betrand Russel, chapter Limitations of Scientific Method, pages 620–627. London: Routledge.
See also the initial post on RWER-Blog
© 2013_10 EKH, except original quotes up