RWER issue 56: Wolfgang Drechsler
Understanding the problems of mathematical economics: A “continental” perspective
Wolfgang Drechsler [Tallinn University of Technology, Estonia]
Within the heterodox and especially the post-autistic, real-world-focused critique of Standard Textbook Economics (STE), often published in this journal, attention to its literally fundamental method, quantitative-mathematical in general and mathematically modelling specifically, and how this method steers economics away from reality, is and has been almost inevitable. Just the last issue of this journal featured a lead article by Michael Hudson on “The use and abuse of mathematical economics” (2010) which kindly quoted my quip that “mathematics has helped enthrone irrelevance as methodology.” (5)
What generally informs even this critique, however – and not surprisingly so – is its intellectual and science-sociological rootedness in the Anglo-American discourse, in which specific questions must be addressed because they are considered, and thus are, relevant for and within that context. But while this discourse has globally won the day, at least for now, the insight that STE might be the economics precisely of that context, and thus that bowing to this context might not always produce the best results given the realist agenda, may make it helpful to look at an alternative discourse which may tackle the problems of the use of mathematics in a different, and even perhaps in a more immediate way.
1.1. Understanding and context
An obvious candidate for such an alternative discourse is the “Continental” (European) one, within which I would like to focus here on that particularly German tradition which we can call understanding-oriented (verstehensorientiert) or, more professionally and contemporarily, hermeneutical. In economics and the social sciences, this approach is part of the German Historical School of Economics (GHS), especially the younger (headed by Gustav von Schmoller) and youngest (headed by Werner Sombart, Max Weber’s antagonist and friend). In contemporary philosophy, it is mainly represented by the late Hans-Georg Gadamer, the father of philosophical hermeneutics, Heidegger’s most eminent student and one of the most important philosophers of the 20th century. That approach invariably and continuously connects back to two matrices of “Western” thought, Kantianism and Ancient Greece, i.e. Plato and Aristotle. In philosophy generally and also in epistemology specifically, hermeneutics and its larger context of “Continental Philosophy” is perhaps the most orthodox heterodoxy today, even within Anglo-American academe. It is certainly much more so than the GHS is in economics, where, in spite of continuous attempts at re-evaluation and resurrection (I only mention, for their work in English, Ha-Joon Chang, Geoffrey Hodgson, Erik S. Reinert and especially Jürgen G. Backhaus), it remains obscure.
You may download the whole paper at: http://www.paecon.net/PAEReview/issue56/Drechsler56.pdf