History of Economics or the History of Economic Methodology?

Every single economic theory implies a completely unique relationship to reality. A theory itself, its theoretical message or economic policy consequences can only be understood or properly judged by one taking this relationship into account. Doing so, however, requires a methodological analysis in the lack of which there is no chance of providing a careful interpretation of any theories. This is the reason why the history of economic thought can be described as the history of methodologies. This narrative should be a vital constituent of the commentaries elaborated in the history of economics.

The history of economics or physics have been the history of methodologies as well. In other words, the evolution of methodology has been a part of the evolution of theories, even if in economics theoretical and methodological interests have often been separated from one another. Even though the authors miss reflecting to methodology time and again, it remains true that every model or theory in economics implies a particular epistemological standpoint. Revealing such implications, checking the explicitly emphasized relationships to reality can provide new insights even for the history of economic thought. Michel De Vroey’s “A History of Macroeconomics from Keynes to Lucas and beyond” is one of the manifestations of the efforts that are directed towards making methodological interests an integrant part of economic historiography. Recent results have drawn our attention to the fact that methodological studies can contribute to historiography. As a reaction to new methodological insights the way the history of economic thought is reconstructed may also change. Even in the history of physics some refined changes were triggered by the methodological application of some modern statistical methods. In Spanos and Mayo’s “Error Statistical Modeling and Inference – Where Methodology Meets Ontology” some interesting points are made on the possibility of discovering the subtle interplay between instrumentalism and realism by approaching from such a modern aspect.

Such a methodologically bolstered narrative in the history of economics suggests a particular model of evolution in which the history and pre-history of contemporary macroeconomics can be described in the framework of a prolonged battle between realism and instrumentalism. The early, neoclassical phase was dominated by a pure theory deprived of any direct empirical relevance. This theory was amended by Keynes with a much more de-idealized model. The next significant stage of this path was made up of the empirical verification of this de-idealized model. Soon afterwards new classical macroeconomics that can be described as a model with neoclassical purity was also started due to the advancement of modern econometric techniques.

In this methodologically underpinned narrative new classical macroeconomics can be referred to as the culmination of realist efforts. The evolution has not been straight, of course. Klein–Goldberger model or F53 can be regarded as intermittent boosts of instrumentalism. This evolution was closed by new classical macroeconomics which is somehow the “end” of realist macroeconomics. By consummating the victory of instrumentalism, RBC-theorists succeeding new classicals brought the known history of contemporary macroeconomics to an end.

The methodological description of the Friedman–Lucas–RBC line of evolution involves further issues as well. Among them it is why instrumentalism can at all be an alternative of realism that seems to be the most interesting. If instrumentalism is inferior in epistemological terms, that is, in terms of providing access to the underlying causal structure, how can it be an appealing option? Referring to pragmatism is not a real explanation, since it is only a designation or a manifestation of an underlying epistemological cause, that is, scepticism.



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