Even Heterodox Economics is Misguided
Earlier this week, Arnold Kling—who taught the first economics class I ever took—wrote a post comparing behaviorism in psychology to Samuelsonianism in economics. In his view, the chief failings of these approaches are an overemphasis on mechanistic models on the one hand, and a “blank slate” view of human nature on the other. For both reasons, he’s rereading Stephen Pinker, enemy of blank slate models and enthusiastic booster of computational, rather than mechanistic, models of cognition.
I argued that computational models are not different in kind from mechanistic ones, they are just more sophisticated. I pointed him towards works in the rhetoric of inquiry tradition, in particular Economics and Hermeneutics, an excellent collection edited by the late Don Lavoie and available for free online.
It seems that he’s now reading that very collection, which is great. However, I remember my own first encounter with this tradition of thought—through Deirdre McCloskey’s The Rhetoric of Economics—and I found it quite baffling at the time.
I think there are a lot of people educated in economics who sense that something is wrong in the house that Samuelson built. However, the tools that most heterodox schools have to offer—and here I include even most versions of the Austrian school—simply won’t help you see some of the fundamental errors of the mainstream view. At best the problems of the mainstream schools are replaced with more nuanced, subtle, and complex models that nevertheless share the same underlying characteristics.
This is the basis of McCloskey’s critique of the neo-institutionalists; they think they’ve moved beyond Samuelsonian limitations, when in fact they’ve simply subsumed the idea of an institution into a Samuelsonian framework. Thus instead of conveying meaning or providing frameworks of interpretation or shaping conjective reality, institutions are treated as structures of reward-and-punishment designed in just such a way to make utility maximizers cooperate with one another.
The writers in the Project On Rhetoric Of Inquiry, as well as hermeneutics and what Lavoie calls “the interpretative turn” in general, can be hard for outsiders of that tradition to get their head around. So this post will be my attempt to introduce one version of that line of thinking. My intended audience are primarily heterodox economists, but the argument will be relevant to economists and social scientists in general, and indeed any scientist or scholar.