The Questionable Status of Economics within the Human Conversation

This account has already rejected the proposition that there can be such a thing as positive economics. Economics—particularly its application to public policy choices—is inherently normative. The systematic investigation of social phenomena—including economic phenomena—cannot be decried simply because it is normative. It is, however, a lot more difficult than it appeared to Enlightenment philosophers. At best, economics is a normative science, but given the false connotations of the word ‘science’ in English, it might be better to rename it a normative discipline. The dominant school of economics—neoclassical economics—has involved the application of a particular metaphor to social affairs. This, in itself, is legitimate. There is no other way of proceeding. The Newtonian metaphor is, however, only one among possibly countless numbers of such metaphors, and it might simply be an inappropriate one to use. After all, it is no longer fashionable within physics and that is where it came from. It also follows from the earlier argument that there are no final criteria for determining its worth. The criteria that are used in practice include its simplicity, its usefulness and its elegance—but our understanding of these cannot be tied down. They also are matters of human invention. It is, consequently, up to the advocates of the use of the Newtonian metaphor in economics to convince the rest of us of the worth of their project, independent of the ‘truth’ claims that were simply assumed by the Enlightenment.

In the spirit of this criticism, McCloskey claims that economics fits poorly within the hypothetical-deductive model of science and that its methodological theory has never been coherent. She recommends that economists turn from such positivism and recognise that what they do is to persuade.[33] She argues that all economists use rhetorical devices such as analogies and appeals to authority as thoroughly as poets and preachers—though with less understanding of why.

There is a danger, however, that a hermeneutical approach to economic analysis could be used to encourage the uncritical acceptance of modern economics.[34] The hermeneutical approach would not oppose the call for much greater empirical testing of economic theories. The falsification criterion is central to the coherence test applauded earlier. While still a minority view within the economics profession, the hermeneutical approach is being taken seriously by some. For example, economists Arjo Klamer and McCloskey[35] claim that economists have begun to see that their talk is rhetorical—an honest argument directed at an audience. This does not warrant a casual indifference to truth as newly understood. Consequently, they question what constitutes economic knowledge. In so doing, they point to specific influential papers as examples: one in the rhetoric of the hypothetical-deductive model of science, but which looks more like a charming metaphor; and another in the rhetoric of empirical finding, but which looks like a reading of history. Furthermore, prior convictions appear to have a large effect on the econometric results of normal economics. They question the point of publishing one’s prior convictions dressed up as findings. They go on to argue that ‘all conversations are rhetorical’ and to recommend ‘a rhetorically sophisticated culture for economists, following Richard Rorty in which neither the priests nor the physicists nor the poets nor the Party were thought of as more “rational” or more “scientific” or “deeper” than one another’.[36] They suggest, however, that being a good conversationalist asks for more than following some method. It asks for goodness. Presumably this means serious adherence to the norms of the scientific subculture, including the subjection of claims to serious and honest examination.

In the same spirit, American historian of economic thought Robert Heilbroner (1919–2005) reminded us that for Smith, rhetoric—the art of speaking effectively—was the rock on which economics stood.[37] He sympathises with McCloskey’s attack on the pretentious scientism in which economists couch their mutual persuasions. He sees such scientism as dangerous, in that it conceals, or minimises, the elements of judgement and moral valuation that are an intrinsic part of economics. Indeed, for Heilbroner, economics is ideological, by which he means an earnest and sincere effort to explain society as its ideologists perceive it—an effort to speak the truth at all costs: ‘What is “ideological” about such an effort is not its hypocrisy but its absence of historical perspective, its failure to perceive that its pronouncements are a belief system, conditioned like all belief systems by the political and social premises of the social order.’[38]

From this perspective, economics is intrinsically normative and directive in that it embodies the constitutive beliefs of its parent society. These beliefs are intrinsically political, in part the result of the self-justifying intentions of their spokespeople. It is also because all societies presuppose structures of subordination and superordination, of cooperation and conflict-resolution and of the justification and use of power. Consequently, all systems of social thought must contain that political character, knowingly and explicitly, or unknowingly and in disguise.

Of course, many economists dismiss methodological questions on the grounds that all the effort to determine whether economics is a science or not has never advanced economics in any practical sense.[39] This is not a tenable position in this inquiry. In practice, economists do pronounce with apparent authority on policy issues. What is the source of that authority?