Why has macroeconomics been dominated by a particular approach for so long? Granted, mainstream macroeconomics has continued to evolve, and includes theoretical variety. But the underlying general approach to building, assessing and communicating knowledge about the economy has persisted, discouraging attention to (longstanding) alternative approaches.
There are many forces at work within macroeconomics to explain the dominance of the mainstream. But here I concentrate on the persistence of methodological approach – what one might call the ‘culture of expertise’ in macroeconomics.
It may seem obvious that we should judge theoretical developments according to the soundness of their logic and the extent to which they are consistent with the evidence; these are key components of the culture of science.
But, particularly for a social science, this is just the start, not the last word on the subject. What kind of logic? What does consistency with the evidence mean? What is meant by the evidence? It is clear from the reaction against mainstream macroeconomics following the crisis that the logic of mainstream macroeconomics did not seem to connect with forces experienced in the real world, and that there therefore seemed to be a huge gulf between theory and experience.
So is the solution that mainstream macroeconomists should just try harder (improve their logic and its relationship with the evidence), or should attention shift to alternative approaches, with alternative logics and alternative understandings of real experience?
There is a growing sense, particularly among student groups like Rethinking Economics, that what is needed is a pluralist opening-up to considering a variety of approaches. It is not a matter of replacing logic with illogic or facts with ‘fake news’, but rather expanding attention to include different logics and differentunderstandings of reality.
The argument here, therefore, is that our ability to address the question of how macroeconomics should evolve has tended to be conditioned by the dominant culture of expertise in macroeconomics. This culture stems from what is now an old-fashioned, logical positivist view of science, which is couched in terms of deductivist, classical logic (expressed in formal mathematics), tested against independent facts.
A key implication is that it is possible to distinguish science from non-science according to how closely the rules of logical positivism are followed. By definition, any approach to macroeconomics which does not follow these rules is classified as not-science and can therefore be ignored. It is now widely recognised that, within the mainstream, economics is defined by its method – analysis which does not use this method is regarded as ‘not economics’.
In this way, the dominant culture of expertise defines the discipline; alternative possibilities are just not ‘seen’.
Are alternatives to the mainstream approach then not scientific? If science requires logic suited to the subject matter, where that is understood to be a complex open evolving social system, then classical logic has limited application. Since that logic rests on assumptions taken to be true with certainty, there is a particular problem with a subject matter which inevitably only allows uncertain knowledge. ‘Human logic’ (as explained by Keynes) provides an alternative which pursues multiple strands of reasoning from different starting-points (about which our knowledge is uncertain) and using different methods to build up knowledge.
The resulting knowledge is itself inevitably uncertain, but is arguably more robust than knowledge deduced from a single set of axioms which presume unwarranted certainty. To argue that only deductivist mathematics is rigorous is only true in its own terms – it does not address rigour in the sense of taking seriously the nature of the subject matter.
Once we allow for alternative notions of expertise, important possibilities follow which are relevant to the way in which macroeconomists relate to policy-makers and the general public.
The mainstream culture of expertise presents macroeconomics as a technical exercise, without ethical content. But in fact values are embedded in the analysis – even at the basic level of selecting what is to be excluded from the analysis. Further the (often implicit) aim is to build a macroeconomic model which is both over-arching and universal, suppressing differences between societies and value systems. These features explain the stance of mainstream macroeconomists as technical experts detached from politics and not morally implicated when their advice is put into practice.
But alternative approaches to macroeconomics, such as Post Keynesian macroeconomics, build on addressing their own understanding of experience (their ontologies) and use their own ranges of methods of reasoning and criteria for assessing theories as implied by their ontologies. These approaches fall roughly into scientific communities, which Kuhn called ‘paradigms’, or schools of thought. Given the need for scientific communities logistically to be of a minimum size in order to function successfully, there is in practice a limit to the number: not ‘anything goes’, but rather ‘structured pluralism’.
These alternatives all understand economies to be systems which are open in some respects or others, and which therefore yield knowledge which is in general uncertain. Getting policy-makers or the general public onside over a particular argument is therefore, critically, a matter of persuasion rather than demonstrable proof (since that proof is impossible). It requires reference to, and discussion of, an understanding of the evidence and how the theory aims to explain it, as well as the values being brought to the analysis.
If we are to think of rebuilding macroeconomics, then, it is important, not only to address the way in which the mainstream has managed to impose its own culture of expertise, but also to open the discussion up to a culture of expertise which allows for a range of ways of analysing the socio-economic system. This has important implications for how economists engage with policy-makers and the general public.
Persuasion on the sole grounds of technical expertise is not enough.
University of Stirling