Home > New Paradigm Economics > Tony Lawson has changed our conversation

Tony Lawson has changed our conversation

from Edward Fullbrook

The case for Lawson’s significance that I argued five years ago and appears below seems to me even truer today.

Tony Lawson has become a major figure of intellectual controversy on the back of juxtaposing two relatively simple and seemingly innocuous ideas.  In two books and over fifty papers he has argued:

  1. that success in science depends on finding and using methods, including modes of reasoning, appropriate to the nature of the phenomena being studied, and
  2. that there are important differences between the nature of the objects of study of natural sciences and those of social science.

Taken together, these two ideas lead to the conclusion that the methods found to be successful in natural sciences are generally not the ones that should be used in social science.

By relentlessly focusing on this pair of ideas, Lawson has in a short space of time changed one of economics’ key conversations.  His chapter, “A Realist Theory for Economics”, published in Roger Backhouse’s 1994 landmark collection New Directions in Economics Methodology, stands out like someone standing alone at a party.  As recently as then the ideas of three thinkers, none of them economists, none social scientists and all of them dead, dominated economics’ literature on methodology.  The index of Backhouse’s wonderful book powerfully illustrates this.  It lists 47 pages that refer to Thomas Kuhn, 69 to Karl Popper and 73 to Imre Lakatos.  Twelve of the book’s sixteen chapters (excluding Lawson’s) refer to one or more of the three and eight, as well as the back cover, to all three.  Lawson does not refer to any of them.  More significant, Lawson’s key reference point is ontology, a word that, except in the Introduction when Backhouse is introducing his collection’s odd man out, appears in none of the other chapters.  Notably, when Lawson first uses “ontology” he feels it necessary, despite his highly specialized audience, to explain what the word means: “enquiry into the nature of being, of what exists, including the nature of the objects of study.” [Lawson 1994, p. 257]

Thirteen years later and anyone in economics who knows anything about methodology knows what “ontology” means.  They also have come to realize that if Lawson’s basic conclusion were applied it would entail a programme of reform that would fundamentally change economics.  A quick check with Google shows just how phenomenally successful Lawson has been at changing the conversation.  Below are listed the number of web pages turned up for four trios of words. [30/03/07]

Popper, economics, methodology         300,000

Kuhn, economics, methodology             391,000

Lakatos, economics, methodology          82,300

Lawson, economics, methodology         264,000

ontology, economics, methodology      1,050,000

23/11/13

Popper, economics, methodology  923,000

Kuhn, economics, methodology 2,740,000

Lakatos, economics, methodology  194,000

Lawson, economics, methodology  2,760,000

ontology, economics, methodology  6,000,000

To appreciate the significance of the huge debate begun by Lawson, we need to look at its historical background.

Physics, economics and the philosophy of science

For those of you too young to remember, philosophy of science took off in a big way in the 1960s.  Not for the first time, philosophy struggled to update its teachings to make them consistent with developments in science.   . . . . . . . . . .

1843 to today

John Stuart Mill not only turned economics primary concerns away from production and distribution to those of value, he also made the case that economics, and the social sciences in general, should ape the methodology of astronomy and physics.   . . . . . . . . . . . . .

Ontologies

By unveiling the mainstream’s ontology entailed by its methodology and by calling attention to economics’’ scientism, Lawson seeks to win the minds of the young and thereby bring about a reversal of the discipline’s traditional order of priority between method and substance.  Above all Lawson’s project is one of persuading economists to do as physicists have always done: to take cognizance as best they can of the basic characteristics of their domain of inquiry and then proceed to develop and choose their methods accordingly.

Lawson builds his prescriptive analysis on the ontological platform of the social-philosophical school of thought called Critical Realism.  This movement, a predominately Anglo-American affair, can through Continental eyes appear rather hackneyed.  Lawson lists five key properties which, “according to the (philosophical) ontological account” that underwrites his project, social phenomena possess. [Reply to Davidsen, 15]

  1. They are produced in open systems.
  2. They possess emergent powers or properties.
  3. They are structured.
  4. They are internally-related.
  5. They are processual.

These core ontological ideas of Lawson’s project include nothing that at the time of Critical Realism’s inception in the 1970s was not already part of the woodwork of Continental philosophy and social theory.  One example well illustrates the case.  In Simone de Beauvoir’s The Second Sex (1949), one of the last century’s most influential books, the concept of gender and the ontological framework that supports it incorporate all five of the properties of social phenomena that Lawson embraces.

  1. open systems:
    “humanity is something more that a mere species: it is a historical development;” [Beauvior, p. 725]
  2. emergent:
    “Woman is not a completed reality, but rather  a becoming,” [p. 66]
    “One is not born, but rather becomes, a woman.” [p. 295]
  3. structured:
    “For us woman is defined as a human being in quest of values in a world of values, a world of which it is indispensable to know the economic and social structure. We shall study woman in existential perspective with due regard to her total situation.” [p. 83]
  4. internally-related:
    ”Otherness is a fundamental category of human thought.” [p. 17]
    ”The Other is posed as such by the One in defining himself as the One.” [p. 18]
  5. processual:
    ”An existent is nothing other than what he does;” [p. 287]

And of course above all Beauvoir was an existentialist so that, in Lawson’s words, “there is no one-to-one mapping from social structure to individual pathways, experience or personal identities [p. 65, this volume],” and in Beauvoir’s words, “she acquires this consciousness under circumstance dependent upon the society of which she is a member.  . . .  But a life is a relation to the world, and the individual defines himself by making his own choices through the world about him.” SS, 80-1][1]

Pointing out the historical pedigree of Lawson’s core ontological ideas is not a criticism but, on the contrary, an endorsement.  It is the unoriginality that so suits Critical Realism for the task of critiquing mainstream economics.  The legitimacy and fecundity of the ontological ideas that it pushes are so well-tested and so widely embraced outside of economics that it makes an ideal replacement for the ontology implicitly assumed by mainstream formalist methods.  To my knowledge no one of repute in economics has dared to come forward to argue, against Lawson, that the economy is a closed system, that it is not characterized by the property of emergence, that it is not structured, that in it internal relations do not play a pivotal role and that it does not consist of an inter-related series of unending processes.  Only a fool would publicly take up these arguments.  And most economists, but not all, are also too sensible to suggest that economics should not take cognizance of the fundamental properties of its object of enquiry.  In consequence, defenders of the status-quo find it difficult to frontally attack Lawson’s ideas.  They tend to settle instead for indirect approaches.  Easiest and in the short run probably strategically the wisest is just to ignore him.  Another has been to hurl personal abuse at him, as in Herbert Gintis’s amazon.com review of Reorienting Economics.  Another and increasingly common tactic has been to misrepresent the current situation in economics.  There can be a big payoff for this approach when addressing a non-economist public, including economics students, or when addressing oneself in bad-faith.  Out of the tens of thousands of papers published in mainstream economics journals over the past half century, one can easily find some, which having slipped past the gate keepers, embody one or more of the five properties.  Wave these papers about vigorously enough and some people will be convinced that economics is already as Lawson would like it to be.  Alternatively, one can misrepresent the formal properties of various methodologies, as when it is suggested that standard game theory describes an open system.

Thirteen years on

Thirteen years on, Backhouse’s collection belongs not just to another century but also to a different era.  Although many economists, especially older ones, still entertain kissing-cousin fantasies about their relation to physicists, inhibitions have developed about acting them out in public.  It is hard to imagine anyone accepting the Swedish prize today behaving as Samuelson did.  Among methodologists the shift has been especially pronounced and quick. The majority may still in their heart of hearts prefer to view economic method through the physical science prism.  But in the main they have, even if begrudgingly, taken on board the fact than any methodological commitment is also an ontological one.  Questions concerning the fundamental nature of economic phenomena are not yet basic to the practice of economics, as the corresponding questions are in physics, but neither are they still treated as totally beneath attention.  Today nearly all methodologists are either conversing with Lawson or heckling him from the edges of the room.

Source: http://www.paecon.net/PAEReview/issue49/Fullbrook49.pdf


[1] For more on Beauvoir’s ontology see Edward Fullbrook and Kate Fullbrook, Simone de Beauvoir: A Critical Introduction, Cambridge, UK: Polity Press, 1998, or Edward Fullbrook and Margaret A Simons, “Simone de Beauvoir and Jean-Paul Sartre”  Gendering Western Philosophy: Pairs of Men and Women Philosophies from the 4th century B.C.E. to the Present, New York: Rowman and Littlefield, 2008, or “Chapter 14: Gender and Ethics” and “Chapter 15: The Second Sex” in Edward Fullbrook and Kate Fullbrook, Sex and Philosophy, London: Continuum, 2008, or the many papers in “Première Partie: La Philosophie du Deuxiène Sexe” in Cinquaternaire du Deuxième Sexe, editors Christine Delphy, Sylvie Chaperon, Kate Fullbrook and Edward Fullbrook, Paris: Éditions Syllepse, 2002, pp. 19-190.

  1. November 26, 2013 at 4:53 pm

    I totally agree with you on this, Edward.
    Even if epistemology is important and interesting in itself, it ought never be anything but secondary in science, since the primary questions asked have too be ontological. First after having asked questions about ontology can we start thinking about what and how we can know anything about the world. If we do that, I think it is more or less necessary also to be more critical of the reasoning by  modelling that has come to be considered the only and right way to reason in mainstream economics for more than 50 years now.
    Tony Lawson — more than any other modern economist — has provided a really forceful plaidoyer for the importance of ontological under-labouring of science in general, and economics in particular. His “Economcs & Reality” (1997) is a must-read for EVERY serious economist.

  2. November 26, 2013 at 5:15 pm

    If you reject the ergodic axiom then the belief in ontological uncertainty about the system is necessary. Hence Post Keynesian emphasis on the economic world being a nonergodic and therefore an uncertain system.

  3. BFWR
    November 26, 2013 at 6:41 pm

    Money, being mere figures is basically accountancy. Economics is indeed the study of relationships, emergent qualities, open systems etc. Part of that process is understanding the relationships between the datums to be found in the cost accounting books of each and every enterprise in the economy. Cost after all being one of the absolute basics of economics as well. Exchange being one of the other basics and money being the tool for such.

    So money and economics already contain both a hard science (money/accounting) and a social science (economics). Actually the question is, will we merge them in a wise manner so as to craft wise policies. Wisdom is the appropriate “tool” for that because after all it is the “science” of integrative thinking (philosophy) AND acting (policy). Furthermore, Wisdom in no way excludes science, but in fact includes (and merges) BOTH science And intuition further solidifying it as the appropriate means of reaching the goal of what Lawson posits. Not coincidentally, the hallmarks of paradigm change, scientific breakthroughs (social or otherwise) and true and inclusive progress is when (good, thorough and not simply orthodox) science is in fact aided/assisted by….intuition. This fact is often overlooked by those of a scientific mindset.

    The final question needing to be asked is: What are the most powerful and human/humane condensations of Wisdom itself? I have put forth my candidates for these, and I’m confident that they apply universally to all humans and all human systems as well. “Upping the game” of economics and money systems, and the policy considerations of same, specifically, by making them reflect and align with the condensations of Wisdom…is the straightforward and completely rational task ahead.

  4. Lyonwiss
    November 26, 2013 at 8:02 pm

    Unfortunately, theorizing about economic knowledge doesn’t help anyone to gain any actual economic knowledge, particularly when simple ideas about differences in methods are elaborated into more ponderous philosophical generalizations, obscuring what must be done.

    For example in my last comment:

    https://rwer.wordpress.com/2013/11/24/malinvaud-on-how-usa-economists-increasingly-dismissed-measurement/#comment-41220

    I pointed out that economists need to pay much more attention and effort to data collection than they have done so far, because there are no second chances like in physics. Rubbish economic data, such as the fabricated US jobless data in 2012, will remain uncorrected probably forever, misleading generations of economists who are typically not trained to question their “sacred data”.

    The failure of econometrics in discovering anything useful about economics may have little to do with “methodology”, but a lot to do with the “garbage in and garbage out” truism.

    At least one actionable step is clear: treat economic data very seriously and organize independent professional bodies to maintain standards and the integrity of economic data.

    Governments or other agencies such as IMF which usually collect the data cannot be completely trusted, because those bodies have conflicts of interest and have incentives to falsify data. There needs to be additional oversight institutions to verify and correct the collected data.

    • BFWR
      November 28, 2013 at 5:05 pm

      Unfortunately, theorizing about economic knowledge doesn’t help anyone to gain any actual economic knowledge, particularly when simple ideas about differences in methods are elaborated into more ponderous philosophical generalizations, obscuring what must be done.”

      I completely agree with that. That’s why it’s important to look at the BASIC monetary empirical data and think economically about what it actually means. And if that data conflicts with a flimsy THEORY that confuses total money with effective individual demand by abstracting out a basic commercial reality like cost then theory is best re-thought and a policy means of rectifying insufficient individual effective demand without incurring additional cost…ought be considered….no matter whose “ox is gored.” Think universal dividend and ongoing general retail discount in an age of rapidly accelerating technological innovation, which only adds to the deficit of effective demand.

      And that is how a “ponderous philosophical generalization” like individual monetary grace, if integrated with the scientific method, can conclude way before the luminaries of the economic and financial world that “secular stagnation” is what we are facing, as well as decipher an effective solution for same.

      • BFWR
        November 28, 2013 at 5:26 pm

        “Sacred data” is rife in both science and religion. That’s why taking the NATURAL ideas, values, purposes and experiences of religion and intuitively integrating them with the scientific method (which is not only the hallmark of what occurs with paradigm change, but scientific breakthroughs as well) is what is required. And that process is what is referred to as Wisdom, and beyond that integrating the condensations of that wisdom and crafting policy.

        “We shall not cease from exploration
        And the end of all our exploring
        Will be to arrive where we started
        And know the place for the first time.”
        T.S. Eliot

  5. November 26, 2013 at 9:07 pm

    Edward writes:

    <>

    Agreed. I will come back to what I consider THE important difference.

    But first: in my world (modeling of dynamical systems), both social science research objects and physical science research objects have several traits in common. And, using your points from above, but perhaps filling them with a somewhat different content, these are (my version in parentheses):

    “They are produced in open systems.” (Any system to be studied interacts with its surroundings, however you decide to delimit what you consider your system. And you have to define what is part of the system and what is considered to be the outside.)
    “They possess emergent powers or properties.” (Systems with some level of complexity wil often display behaviour that you couldn’t predict by studying its components.)
    “They are structured.” (Its movements are influenced by some structure in which it exists.)
    “They are internally-related.” (The movements, or dynamics, of the system are dependent on how the components are connected and interact which each other.)
    “They are processual.” (Well, any system is a process because it moves in time.)

    Note that _all_ of the above holds for both natural and physical systems. This indicates that one should be careful not to throw the modeling baby out with the neoliberal bathwater. But modeling of a system has to conform to the above principles.

    Now to the crucial difference between physical and social systems: The latter contains components that are CONSCIOUS!
    -If these “components” (i.e. humans) understand the system that they are a part of, they will change their behaviour, which again means that the system wil get changed dynamics.

    An example is a lethal pandemic among animals as opposed to humans. In the animal pandemic they will infect each other regardless of dramatic developments leading to mass death. In a human pandemic people will change their behaviour because they are made aware of the infection mechanisms, and mass death will be (mostly) avoided. Both systems have the same infective mechanisms (contact rate, infection probability when in contact, incubation time, etc.). In that sense they may be modeled in quite similar ways (the reader may google SI and SIR models). But they differ because a valid model of a system containing humans also has to account for changed behaviour because of communication between system “components” about how the system that they are part of, works.

    This means that dynamical modeling of social systems is perfectly meaningful, if one accounts for (the big consequences of) “components’ ” SYSTEM AWARENESS. Again: don’t get to hung up on neoclassicals’ infatuation with “modeling” and (wrongly applied) maths to the degree that you throw out the correct modeling and relevant maths baby with the bathwater.

  6. November 26, 2013 at 9:10 pm

    Very strange. The Edward F. quote was lost initially . It goes like this. Please insert it it when reading the above:

    “… Tony Lawson has …. argued:
    ….
    that there are important differences between the nature of the objects of study of natural sciences and those of social science. “

  7. November 27, 2013 at 1:40 am

    The history of Western through can be viewed in terms of three shift. The first was the shift from mythological explanation to ontological at the time of the Presocratics. The fundamental question was, What is there? The solution sought was in terms of first principles involving real causes.

    The second shift was from the ontological to the epistemological, effected by Descartes. The question then became, What can we know about what is? Descartes answer was in terms of introspection, reason, and mathematics. Conventional economics is largely pursued in the Cartesian mode of assumptions arrived at through introspection and the application of mathematical reasoning to the assumptions.

    The third shift was from epistemological explanation to logical analysis. The fundamental question became, What can we say meaningfully about what we think we know what is? Wittgenstein is often credited with this shift. Wittgenstein held that philosophical problems were analyzable into attempts to push language beyond its limits as in controversies over realism, idealism, and empiricism, or competing theories of ethics or aesthetics.

    The search for knowledge must be informed by these three questions. The third to emerge historically is logically prior. We must first inquire into what we can say meaningfully. Then we must inquire into what we can know and how we can know it. There are the boundary conditions of knowledge. What we actually want to know, what is there and how does it function, is the final stage of this process.

    Skipping the first two risk landing outside the boundaries of language and cognition. In economics, some economists and Bayesians resist Knightian uncertainty, for instance, as well as what threatens ergodicity, e.g., complexity and emergence. Interestingly in this regard, Cognitive scientist and author of Descartes’ Error, Antonio Damasio, David Dornsife Professor of Neuroscience, USC, was recently the keynote speaker at an INET conference. At the next conference I would suggest also having an analytic philosopher whose specialty is economic discourse.

    Of course, I am not implying that Lawson’s ontological approach is misguided. I am just saying that the approach ontology has to be critical because we see through a lens of brain functioning and framing, that is, we are fundamentally ideological and and respectively take our worldviews as reality — which is a reason for cultural and subcultural differences. What you see is not what you get if you are looking through glasses that introduce distortion.

  8. November 28, 2013 at 1:03 pm

    I have now tried to express myself clearer on what I wrote above, see my own web page: http://www.itk.ntnu.no/ansatte/Andresen_Trond/articles/modeling-awareness.html

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