Methodology

Question 1

What is the orthodox approach to methodology?

Answer 1

Orthodox base their method solely on empirical testing and every other type of testing is a waste of time

Question 2

What is the main aim of methodolgy?

Answer 2

To evaluate theories, uncover the truth and explain things to distinguish between good and bad theory, to distinguish what is true and not true, looking at the philosophy of science.

Question 3

What are the three main alternative approaches to methodolgy?

Answer 3

• Rationalism
• Empiricism
• Interpretative methods

Question 4

What is rationalism based on?

Answer 4

Based on logical reasoning alone (as in pure theory) Stress is on reason and logic and through this you can discover the truth, pure rational theory could uncover the truth

Question 5

What is the most common example of rationalism?

Answer 5

Classic example of this is Cartesian rationalism (based on the work of Descartes)

Question 6

What is empiricism?

Answer 6

Based on formal observation and experiments. Based on empiricism through observation, very traditional method in science. Standard method from the enlightenment and Francis Bacon

Question 7

What are interpretative methods?

Answer 7

Often missed out on. Based on interpretation or understanding, there are cases where you can’t just have pure theory for example in history . Can’t just use empiricism because you can’t observe people’s thoughts. You are going to have to use some observation but it cannot be in isolation as it can only go so far, you must go beyond that and interpret peoples motives. It is the understanding of human motives (Signs and symbols)

Question 8

What are some examples of interpretative methods?

Answer 8

Hermeneutic and semiotics Hermeneutics is the study of communication, how do people understand each other
Semiotics is the study of signs and symbols, symbolic things

Question 9

What do orthodox economists usually argue for?

Answer 9

Orthodox economics makes extensive use of formal theory but seldom argues for rationalism as a method instead they argue for empiricism

Question 10

What does heterodox economics usually argue for?

Answer 10

Heterodox economics usually argues for pluralism of method implying a combination of approaches with less emphasis on mathematics

Question 11

How do orthodox economists view interpretative methods?

Answer 11

Interpretative methods are associated with the humanities and are rarely mentioned in orthodox economics

Question 12

How is rationalism used?

Answer 12

It is highly regarded however is unlikely to stand on it’s own

Question 13

How is the interpretative method used?

Answer 13

As it is non-scientific it is not really used

Question 14

What should you argue for?

Answer 14

Pluralism

Question 15

What are the two main empirical approaches?

Answer 15

• Induction
• Deduction

Question 16

What is induction?

Answer 16

The original scientific method dating back to the enlightenment, Francis Bacon et cetera starts with observation, then derives theories from this. The aim is verification or proof. Repeated observations lead to derivation of general laws

Question 17

what is deduction?

Answer 17

Emerged largely in the 20th century associated with Karl popper etc, starts with theoretical hypothesis and then uses observations to test them

Question 18

What was the standard method in science until Victorian times?

Answer 18

Induction

Question 19

What is the problem of induction?

Answer 19

Induction is not quite watertight as you can never truly verify your theory, the future can always be different from the past therefore can never fully prove this

Question 20

What did deduction become in orthodox economics?

Answer 20

Falsification is now the standard in orthodox economics

Question 21

What is a general theory?

Answer 21

A theory that should work with every case, if one observation goes against it then the theory can be disproved. This is known as falsification

Question 22

What is the issue with deduction?

Answer 22

It means that the hypothesis is pulled from nowhere

Question 23

What is the limit of empirical work in orthodox economics?

Answer 23

Any theory can be rescued by using an auxiliary hypothesis (ie. your theory performs badly so you can push the blame elsewhere). This means that econometrics is never truly decisive. Always is in part biased by your subjective beliefs

Question 24

What is the aim of deduction?

Answer 24

Falsification or disproof

Question 25

Why is deduction not appropriate from a heterodox viewpoint?

Answer 25

Deduction may be logically watertight however it is not problem free from a heterodox perspective therefore is is not reliable because of two reasons:

• Unknown source of the general hypothesis
• The Duhem-Quine thesis

Question 26

What is the issue with the unknown source of the general hypothesis?

Answer 26

Presumably therefore this hypothesis comes from some form of observation, if it is based on a casual observation therefore we are back to induction therefore we can never have a purely deductive method

Question 27

What is the Duhem-Quine thesis?

Answer 27

You can never have a pure test of any hypothesis so any hypothesis is always accompanied by other assumptions so the main theory is a hypothesis itself so you always get what are called auxiliary hypotheses that accompany it and when you get a negative result you don’t know whether it is an issue with the main hypothesis or the auxiliary hypothesis and this matters because the auxiliary hypothesis allow you to rescue a theory. Say you get bad econometric results that don’t fit your model, you could instead blame this on issues with the data or the econometrics or maybe some of the other assumptions , time lags for example or something else which is the problem. Any theory can be rescued in this way logically by placing the emphasis on the auxiliary hypothesis so people don’t abandon their theories. Econometrics therefore are never decisive, there is always a logical loophole in whatever you do.

Question 28

What is the heterodox take on empiricism therefore?

Answer 28

Heterodox economists therefore see that both of these methods have their floors, on it’s own empiricism is therefore not reliable so you will never get pure empirical results, the results are always partly biased and distorted by their own beliefs and whether you interpret the result is subjective so these things are never conclusive.

Question 29

What are the general problems of empiricism?

Answer 29

• No observations or empirical results can ever be entirely free from the conceptual presuppositions of the observer
• Conscious or unconscious biases always enter into the design of empirical studies and the way that the results are interpreted

Hence there is no pure conclusive version of empiricism.

Question 30

What is the position of the philosophy of science?

Answer 30

Recent philosophy of science has moved away from positivistic and force educationist methods towards a broiler or pluralistic view that highlights the social aspects of science. These anti-positive arguments are tolerant of methods other than formal empiricism, such as informal, observation, rationalism, interpretive, methods, etc

Question 31

What is the orthodox view?

Answer 31

Rigorous empirical testing can yield positive value free knowledge. Basic value judgements are added later, by policy makers

Question 32

What is the heterodox view?

Answer 32

all theory will be influenced by subjective judgements of fact. No neat fact/value or positive/normative distinctions in economics

Question 33

What does positive mean?

Answer 33

Value free

Question 34

What problems do pluralistic methods face?

Answer 34

The problem of relativism: all methods and theories seem equally good. Extreme relatavism might even dent

Question 35

What is critical realism?

Answer 35

Assumes that reality exists independently of observation and is not accessible by empirical methods alone. The aim is to allow for an absolute real object of study but at the same time uphold a pluralism of method in seeking to explain and understand this

Question 36

What are the dominant methods in economics?

Answer 36

Friedman’s predicitive instrumentalism (judging theories by their predictions alone) and Popper’s falsificationimsm (requiring formal tests of hypotheses)

Question 37

What are some examples of movements away from postitivistic and falsificationalist methods?

Answer 37

Lakatos (scientific research programmes), Kuhn (paradigm shifts)

Question 38

Justify the use of a pluralistic approach

Answer 38

The empirical approach alone is too narrow as it’s conception of realism only compromises empirical realism, instead if a critical realism is allowed alternatives to empirical testing become legitimised by assuming that reality exists outside of observation. The argument then is not just that there are limitations to the human capacity for knowledge which prevent us from identifying a single best approach to knowledge which would satisfactorily explain law-like behaviour. The argument is further that the nature of individual behaviour (with its social and creative aspects) is too complex to be predictable (even stochastically). Formal specification of the conventions and institutions which condition their behaviour to evolve in indeterminist ways, and of creativity which by definition cannot be known beforehand, cannot alone be expected to be adequate to the task.