Lecture 2: Positivism, its variants and its impact on Economics Research Methods Lecture 2: Positivism, its variants and its impact on Economics

Why study Positivism? Hughes & Sharrock (1997: 24): positivism was ≈ orthodoxy in social science No longer believed? (Williams, 1976) Yet economics still heavily influenced Authors defined in terms of positivism Positivist tools (e.g. survey) still dominate Must try to give it a fair hearing!

Roots of positivism Renaissance/Enlightenment thought of 16th/17th Centuries Philosophy divided into empiricism/ rationalism: foundation of knowledge experience/reason; Bacon/Descartes Saint-Simon: liberate people from dominant ideas; French Revolution Get past illusions to “social facts” (Durkheim)

Comte’s positivism Influenced by Hume’s attacks on metaphysics Two bona-fide forms of knowledge: empirical and logical, but empirical emphasised Precision, clarity and certainty View world as machine (reflects Descartes) World comprises deterministic laws, regularities; waiting to be discovered by the scientist

Positivism: basics Laws: whenever A, then B (plus CP) Causality: constant conjunctions of events (Hume) Single cause leads to single effect (Durkheim) Mill’s tendency statements, Hume’s caution both too weak for modern positivists

Scientistic naturalism Social science should imitate natural sciences (although why? Never stated!) Aim for “unity of method” Differences acknowledged between subject matters Science proceeds via observation, modelling, to get to laws

Observation “Brute facts” (not affected by any judgement): mimic natural sciences (e.g. atom, velocity) Observation is preconception free (Durkheim) and Value-free (positive analysis) Correspondence theory of truth Variables; measuring properties present in entities Quantification: counting frequency of some property present in some entity Operationalism: object defined in terms of the means of measuring/checking it (Hausman: 14)

Theory development Individualism; reductionism Modelling Testing predictions of models Verification H-D model tries to solve problem of induction

Logical positivism Carnap, Mach (Vienna Circle), Ayer, Russell: trying to make positivism more logical Meaningful (True) statements must be verifiable But now analytic statements can be true by virtue of the logical rules by which they are deduced Yet LP questioned ‘ideal types’

Popper’s intervention Karl Popper: capturing spirit of positivism in many ways but opposite in others Sceptic: verification impossible No theory proven; yet to be falsified “Scientific” theories are testable Theories set up bold conjectures to be tested Test theories by their predictions

Popper’s intervention Falsification from a single counterexample Learning by trial and error Idealised view of science Kuhn, Lakatos: Popper underestimated tenacity with which “failed” theories are retained Kuhn: sciences proceed irrationally; normal vs. revolutionary science

Friedman (1953) Highly influential essay Can be interpreted as combining elements of positivism with Popper “positive economics” Purpose of theory = prediction Good theories predict well Simplicity and precision also good

Friedman Assumptions of theories not important Assumptions are always simplifications - cannot be “realistic” - cannot assess theory via “realisticness” Assumptions are shorthand for conditions, etc. under which theory works Model works “as if” assumptions are correct: e.g. mobile leaves; profit maximisation

Conclusions Positivism has had several highly significant effects on economics: Mimic natural sciences “Value-free” analysis Causal laws: “if X then Y” type Quantification Tools used Emphasis on deductive logic

Conclusions H-D model Friedman also very influential Assertions about “positive” economics, the role of assumptions, prediction and falsification (echoing Popper) adopted strongly (at least “officially”) Both subject to considerable criticism Next two lectures will engage criticisms of positivism and its variants