• Lasse Kristensen
4. term, Science in Economics, Master (Master Programme)
This master thesis is a study into the present fragmentation in economic science about what ideas constitute a realism-based philosophical approach and foundation for the science. With ideas for realist foundations found in both the post-Keynesian critical-realist philosophy and in the Austrian causal-realist philosophy, two independently developed strands of realist economic thought, these two are examined comparatively, to ascertain, and to make explicit, where these share intersections, complementarities, and/or differences. The aim is to identify these, to then open up for new avenues towards a philosophical integration and greater synthesis between economists on what realism is in the economic science. The method adopted towards this aim is an ontologically reflexive pluralism (Bigo & Negru, 2008), by which critical-realism and causal-realism are examined, starting with their respective ontologies, and then moving on to their epistemologies and methodologies. Given the present lack of both explicitness and awareness of realist ideas between the economic paradigms, a result of a past absence of integrative work, this present state of the economic science assigns a high relevancy to engaging with the type of integrative philosophical research. This thesis applies common definitions and understandings of philosophical terms including those of realism and nonrealism, and of broader definitions of economic ontology, epistemology, and methodology. Critical-realism is examined on its ideas of open-system theorizing; social entities in science; structured reality; determinism and non-determinism; fundamental uncertainty; structured pluralism; Babylonian mode of thought; human agency; and abduction. Causal-realist philosophy is then examined on its ideas of open-system theorizing; mental entities in science; determinism and non-determinism; ultimate givens; epistemological dualism; the logical structure of the human mind; human action; and praxeological deduction. From these examinations several comparative intersections, and also some complementarities and differences, are identified. First is shown the intersection in the shared critical-realist and causal-realist commitments to ontological world-realism and to epistemological process truth realism. Second is their similar critiques of the neo-classical mainstreams logical-positivist philosophy, critically its epistemological monism and its closed-system mathematical deductivist mode of thought. Third is then their intersection in commitments to open-system theorizing, and of recognizing social and/or mental entities as legitimate scientific objects in economic science analysis. Fourth is their intersection on the view that economic reality is a highly non-deterministic and a fundamentally unpredictable process. Fifth is their intersection of adopting an epistemological dualism between natural science and social science. Sixth is their intersection of focusing on descriptive and qualitative explanations as economic science ideals in contrast to the neo-classical focus on prescription and quantitative prediction. Seventh is their intersection on considering human agency/action as the analytical starting point for economic analysis when grounded in a realist foundation. Finally is also discussed their methodological differences, where post-Keynesian critical-realism champions the method of abduction, and where Austrian causal-realism champions that of praxeological deduction. To operationalize these philosophical findings, a case-review is finally made of the critical-realist and causal-realist argued causes and cures for the 2008 financial crisis, where the philosophical differences between the post-Keynesian concept of animal spirits as producing inherently unstable market outcomes is contrasted with the Austrian concept of entrepreneurial discovery which is seen as producing inherently stable market outcomes. This theoretical contrasts between the two is shown to be grounded in origins at the philosophical level, resulting in different business cycle theories due to contrasting reasonings on the long-term economic outcomes of human agency/action.
Publication date5 Jan 2021
Number of pages104
ID: 398133162