Orthodox and Heterodox Economics in Recent Economic Methodology

Myself when young did have ambition to contribute to the growth of social science. At the end, I am more interested in having less nonsense posing as knowledge (Frank Knight, 1956).At the time I was finishing graduate school, there was no real "field" of economic methodology. There were of course methodological writings by influential economists (e.g., Robbins 1932, 1952; Friedman 1953; Samuelson 1964, 1965), but these works were seldom of the same intellectual quality as the research that had made these economists famous as economists. There were also brief discussions of economics in influential books on the philosophy of science (e.g., Hempel 1965, Nagel 1961), but they focused on general problems associated with the human and social sciences, rather than with specific issues concerning economics. There were two recently published case studies in the philosophy of economics written by philosophers-Hausman (1981) and Rosenberg (1976)-but in general the field was almost as unpopular among philosophers as it was among economists. Finally, and perhaps most importantly, there was beginning to be a collection of dedicated books on economic methodology-Blaug 1980a; Boland 1982; Caldwell 1982; Hutchison 1981; Latsis 1976; Wong 1978; and a few others-but it was a relatively assorted collection of texts with little to suggest that these books would end up being the foundational texts for the inchoate field of economic methodology. All in all, at that time there seemed to be very little to encourage a young scholar thinking about an academic career in economic methodology or the philosophy of economics.However that was a long time ago, and I am happy to be able to report that the situation today is much improved. There are now dedicated journals such as The Journal of Economic Methodology and Economics and Philosophy, as well as numerous journals specializing in the history of economic thought that frequently publish methodological research. There are also a number of research institutes and professional societies dedicated to the intersection of economics and philosophy around the world. It is now possible for a young scholar to specialize in research connecting economics and philosophy without necessarily feeling like they are jeopardizing the possibility of a successful academic career. Of course, this does not mean that such careers are easy, or that all is well within the field-i.e., "better" certainly does not imply "good". Particularly in the United States, the economics profession still seems to have little or no interest in elevating economic methodology to the status of a legitimate field of inquiry within the discipline of economics. The financial crisis and the associated questioning of the methodological foundations of macroeconomic theory, seems to have initiated a momentary warming of the relationship between mainstream economics and economic methodology, but who knows how serious the overtures are or how long they will last. Also, it is probably not a good sign that the profession considers economic methodology to be an inferior good in the traditional microeconomic sense: that is, one that economists consume more of when incomes fall.The last twenty or so years have also witnessed a significant change in the traditional relationship between "orthodox" and "heterodox" schools of thought within economics. For most of the second half of the 20th century the economic mainstream, the orthodoxy, consisted of neoclassical microeconomics combined with some version of macroeconomics (it was IS-LM Keynesian theory during the immediate post WW-II period, and new classical macroeconomics and real business cycle theory later). On the other hand, the periphery of the discipline was divided into a small number of self-consciously heterodox schools of thought: institutionalist, Marxist, Austrian, post-Keynesian, and others. There were two key features to this half-century long equilibrium in economic theorizing. …