Philosophical Realism in Economic Science: An integrative study on the comparative nature between post-Keynesian critical-realism and Austrian causal-realism
Translated title
Philosophical Realism in Economic Science
Author
Kristensen, Lasse
Term
4. term
Education
Publication year
2021
Submitted on
2021-01-05
Pages
104
Abstract
Economists who call themselves realists agree that economies exist independently of our models, but they disagree on what a realist foundation should look like. This thesis compares two independently developed realist traditions—post-Keynesian critical realism and the Austrian school’s causal realism—to map where they overlap, complement, or diverge, and to suggest ways to build bridges between them. The method is ontologically reflexive pluralism (Bigo & Negru, 2008): each tradition is examined through its ontology (what exists), epistemology (how we can know), and methodology (how we should study). Because realist ideas are often implicit across economic paradigms, making them explicit is valuable. Findings—shared commitments: 1) world realism and a process view of truth (reality exists; knowledge is fallible and develops through inquiry), 2) a common critique of the neoclassical mainstream’s logical positivism, especially epistemological monism and closed, purely mathematical deductivism, 3) a preference for open-system theorizing, 4) recognition of social and/or mental entities as legitimate objects of analysis, 5) a view of the economy as highly non-deterministic and fundamentally unpredictable, 6) an epistemological dualism that distinguishes natural from social science, 7) an emphasis on descriptive, qualitative explanation over prescription and point prediction, and 8) starting analysis from human agency/action. Differences: Methodologically they diverge—critical realism emphasizes abduction (inference to the best explanation), while causal realism emphasizes praxeological deduction (deriving implications from axioms about purposeful action). Application: A brief case review of the 2008 financial crisis shows how these philosophical differences lead to distinct business-cycle theories: post-Keynesians stress “animal spirits” (shifts in confidence that can make markets inherently unstable), whereas economists from the Austrian school stress “entrepreneurial discovery” (market processes that can be stabilizing). The thesis links these contrasting diagnoses and remedies to their deeper philosophical roots and suggests that clarifying overlaps can support future integration in realist economics.
Økonomer, der kalder sig realister, er enige om, at økonomien eksisterer uafhængigt af vores modeller, men de er uenige om, hvordan et realistisk grundlag bør se ud. Denne afhandling sammenligner to uafhængigt udviklede realistiske traditioner—post-keynesiansk kritisk realisme og den østrigske skoles kausal-realisme—for at kortlægge, hvor de overlapper, komplementerer eller afviger, og for at pege på veje til at bygge bro mellem dem. Metoden er ontologisk refleksiv pluralisme (Bigo & Negru, 2008): Hver tradition undersøges ud fra dens ontologi (hvad der findes), epistemologi (hvordan vi kan vide), og metodologi (hvordan vi bør studere). Fordi realistiske idéer ofte er implicitte på tværs af økonomiske paradigmer, er det værdifuldt at gøre dem eksplicitte. Resultater—fælles træk: 1) verdensrealisme og en procesopfattelse af sandhed (virkeligheden eksisterer; viden er fejlbarlig og udvikles gennem undersøgelse), 2) en fælles kritik af den neoklassiske mainstreams logiske positivisme, især epistemologisk monisme og lukkede, rent matematiske deduktive modeller, 3) præference for åbne systemer, 4) anerkendelse af sociale og/eller mentale entiteter som legitime analyseobjekter, 5) opfattelsen af økonomien som stærkt ikke-deterministisk og grundlæggende uforudsigelig, 6) en epistemologisk dualisme, der skelner mellem natur- og samfundsvidenskab, 7) vægt på beskrivende, kvalitative forklaringer frem for forskrifter og punktprognoser, og 8) at starte analysen med menneskelig handleevne/aktion. Forskelle: Metodisk afviger de—kritisk realisme lægger vægt på abduktion (slutning til den bedste forklaring), mens kausal-realisme lægger vægt på prakseologisk deduktion (at udlede implikationer fra aksiomer om målrettet handling). Anvendelse: Et kort casereview af finanskrisen i 2008 viser, hvordan disse filosofiske forskelle leder til forskellige konjunkturteorier: post-keynesianere betoner “animal spirits” (skift i tillid, der kan gøre markeder iboende ustabile), mens økonomer fra den østrigske skole betoner “entreprenøriel opdagelse” (markedsprocesser, der kan virke stabiliserende). Afhandlingen kobler de kontrasterende diagnoser og løsninger til deres dybere filosofiske rødder og foreslår, at afklaring af overlap kan understøtte fremtidig integration i realistisk økonomi.
[This apstract has been rewritten with the help of AI based on the project's original abstract]
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