Note to Bucknell Workshop readers. Introductory comments.

I wanted to say a few words about what I hoped to accomplish in the first chapter of the critical commentary to maximize the helpfulness of people's feedback.

My goal was to establish the paradigmatic nature of neoclassical theory in order to permit criticism of it. Mainstream textbooks try to "command belief" in neoclassical economics in the name of science. I wanted to challenge that command by elaborating the idea of paradigms and arguing that neoclassical theory was but one possible way of thinking about the economy. My goal was to open a window for alternative perspectives.

In teaching heterodox economics in upper level elective courses, I have found the best students to be excited by the idea of paradigms and emboldened to criticize neoclassical theory as a paradigm. I am not sure this reaction will be widespread in principles courses.

I fear that the chapter is likely to be difficult reading for many undergraduates and am not sure what to do about this. Part of me wants to write the first draft of the critical commentary book for a motivated and well prepared audience (and revise it later for a larger audience). Another part of me believes that the real challenge is to make the ideas accessible and engaging to a large audience, and that coverage and complexity should be sacrificed to readability.

I'd like advice on whether the chapter is readable enough for a non-trivial audience of principles students. I'd also appreciate suggestions on what sections might be deleted to shorten the text and make it more focused. I use all of the stuff in the chapter in my senior seminar on paradigm debates in economics to lay the groundwork for many different critiques of neoclassical theory. It's therefore difficult for me to delete stuff that I sense is non-essential-so help would be great.

Thanks, Steve

TELLING OTHER STORIES

THE LIMITS OF NEOCLASSICAL ECONOMICS

PREFACE

This book is about philosophical debates in economics. It critiques conventional economic theory and standard introductory economics textbooks. It is designed to make you think. Socrates argued that “an unexamined life is not worth living”. The same can be said of textbooks, an unexamined argument is not worth reading.

Conventional textbook[i] economic theory is based on many assumptions. We will explore these assumptions and suggest when they may be unreasonable. Conventional textbook economic theory tells a lot of stories. We will look critically at these stories and analyze when they seem analogous to real life and when they may be misleading. Conventional textbook economics also offers a framework for designing public policy. We will explore when it’s wise and unwise to listen to conventional economists’ policy recommendations.

In short, we will offer a different pair of glasses with which to look at economic issues from the spectacles provided by conventional or what is called “NEOCLASSICAL ECONOMICS”. [1] Our pair of glasses draws on ideas from many different schools of thought, including: institutional economics, radical economics, Marxian economics, feminist economics, and ecological economics.[2] For now, we will term the lens “HETERODOX ECONOMICS”. We will give a more precise definition in chapter 2. Our claim is not that conventional economics is totally wrong, but that its assumptions and ways of reasoning are valid in much more modest contexts than it implies. We will try to define the terrain upon which neoclassical theory should and shouldn’t be used.

Hopefully many of you will find that the book gives you a new way of seeing the world and that will be exciting. The book should give those preferring to retain old glasses, more powerful vision through them. To paraphrase John Stuart Mill, a famous philosopher and economist of the 19^th century, one who only understands their own position and not that of competing frameworks, doesn’t understand their own position very well.

Perhaps the most important thing the book can impart is the realization that learning involves competing theories and active choices about how to think about things. A good education gives you many sets of glasses and a disciplined mind to chose amongst them.

Where We Are Going. We begin with two introductory chapters. Chapter 1 discusses the nature of philosophical debates in economics. Chapter 2 develops an alternative approach to economic theory from that offered in conventional introductory textbooks. Subsequent chapters apply the ideas outlined in chapter 2 to the topics of conventional textbooks. Appendix A matches the book’s chapters to those in the most widely used conventional texts. The appendix also briefly outlines the subject matter of each chapter so that it can be matched to textbooks not specifically listed in the appendix.

Final Word. Theories and paradigms are like tools; they are generally designed to be used, to address some question, to aid in accomplishing some end. This book is animated by the desire to understand economic outcomes so that a more just and humanly satisfying economy can be created. There are other possible projects, such as trying to predict stock prices or trying to find mathematical models that illuminate human social interactions. These projects overlap and diverge at times from the book’s deserdirata. Such is the nature of paradigms. [ii]

INTRODUCTION: PHILOSOPHICAL DEBATES IN ECONOMICS

***

A riddle. A man and his son are driving to a championship football game. It is late December and the roads are covered with snow. They hit a patch of ice and crash into a telephone pole. The father is killed instantly. An ambulance rushes the son to a nearby hospital and operating room. The doctor walks in and say’s, “I can’t operate, that’s my son”. How could this be true? Whatever your answer was to the riddle, assume that it was incorrect and come up with a second answer.[iii]

We will return to this riddle.

***

PARADIGMS IN ECONOMIC THEORY

WHY ECONOMISTS DISAGREE

A paradigm is a conceptual framework, a context for organizing thought. It is like a pair of theoretical spectacles used to observe and think about the world. There are competing paradigms for understanding the economy, competing frameworks for organizing economic theory. This chapter explores why competing paradigms (such as neoclassical economics, Marxist economics, and ecological economics) exist.

EPISTEMOLOGICAL ISSUES.

Thinking is hard. Thinking about thinking (epistemology) is even harder, but that is where we must begin if we are to fully understand economic debates. Epistemology refers to the study of the nature of knowledge, including how we determine what is true and even what we mean by “truth”. We shall begin by comparing two simple models of knowing: the “blank slate” theory of knowledge and the “paradigmatic” or “gestalt” theory of knowledge. Page constraints require that we skip over many subtle and fascinating issues, but if our brief inquiry whets your appetite, you might think about enrolling in a philosophy course that reads thinkers such as Descartes, Locke, Hume, Popper, and Kuhn.

Blank Slate (Positivist) Theories of Knowledge. Most people in our society, including most economists, accept a blank slate theory of knowledge, often without explicit recognition. For many people, blank slate claims seem commonsensical and self-evident.

The blank slate theory of knowledge is often associated with empiricist philosophers. It imagines that the mind confronts the world directly. Individuals have experiences from which they generate ideas. It is as if ideas were “imminent” or pregnant in experience. You stick your hand in a fire and generate the idea “hot”. You look at a rose and generate the idea “beautiful”. Your mind reflects the world as if it were a mirror. The world writes on you as if you were a blank slate.

The world’s scribblings and reflections, however, are not always easy to interpret. After sticking your hand in a fire, you might, for example, mistakenly think that orangeness causes pain. Blank slate theories of knowledge thus require that all “imminent ideas” be treated as hypotheses and elevated to the status of provisional knowledge only after surviving experimental tests. (The idea that orangeness causes pain, for example, would presumably be jettisoned after eating your first orange.)

There is often a universality to blank slate knowledge claims. Because everyone can in principle do the same experiments, all thinkers should eventually arrive at the same ideas. Variants of blank slate epistemology lie behind many popular expositions of the “scientific method”. Science commands our belief because it generates falsifiable (testable) propositions from experience and logical deductions. All scientists should eventually reach the same conclusions.

Conventional economic theory tends to adopt blank slate (positivist) epistemology. It thinks of itself as a science, whose conclusions command belief. We shall see shortly why some economists disagree.

Paradigmatic Theories of Knowledge. The paradigmatic view of knowledge argues that the mind never perceives the world directly or experience sensations, innocently, that is, untranslated, or unmediated by a person’s prior conceptual framework. Everyone is always wearing theoretical spectacles and thinking within some paradigm. What one sees is a product of what “is out there” and the lens used to study it.

The pictures below provide a simple (and perhaps dangerously oversimplified) introduction to this idea. Look at them and write down what you see. Assume they came from a book about a young woman drinking wine.

PICTURES

(wine goblet/faces; young/old woman)

I suspect that most of you saw an attractive young lady and some wine glasses. Some of you saw an old lady and some faces. Why? If you look closely at the pictures you should be able to see both versions of each figure. The pictures represent classic examples of figure-ground reversals, studied in perceptual research. Although looking at the same picture, we perceive different scenes. By organizing the lines in different ways in our minds, we can “see” different things. In much more subtle ways, paradigmatic theories of knowledge claim that economists and other social theorists in competing paradigms “see” different things and understand the workings of the social world differently.

From a paradigmatic perspective, observation and thinking are active rather than passive processes. Instead of simply reflecting what is “out there” the observer partially constructs what she sees. As a first approximation, it is helpful to think about paradigms influencing thought in four main ways: by their impact on: (1) the data attended to; (2) the abstractions used to organize data; (3) the language used to convey ideas; and (4) the way in which new theories are tested.

(I) Data Attended To. As the philosopher William James noted, without editing sensations, (that is without focusing on some sensory inputs and ignoring others), the world would be a “bloomin’ buzzin’ confusion”.[iv] People’s conceptual frameworks help provide that editing, by telling people, “look here, and not there.” One’s theory of the mind, for instance, helps determine what psychologists and other counselors “hear” when they interview people.

For example, consider the idea of a “Freudian slip”. According to Freudian psychology, the mind is multidimensional, including conscious and unconscious levels.. Occasionally, instinctual energy from the unconscious bubbles into overt behavior, circumventing subconscious and conscious censors in devious ways. What a non-Freudian might treat as a inconsequential typographical error or slip of the tongue, becomes for a Freudian a key piece of data, a window into the unconscious. When Freudian counselors “listen” to their patients, they often listen more for the silences (censored utterances) and irregularities (Freudian slips) than for explicit remarks. Non-Freudians listen and hear differently.

Similarly, some contemporary physicists build special instruments to explore the nature of matter. The instruments exist because of the presence of a theory that implies the existence of special particles (solar neutrinos) that can be measured by the instruments. Without the theory we would not have the instruments or data about the particles. We wouldn’t “see” them. In fact, we never do “see them”; we record some effects, which given our theory, we interpret as their “reflections”.

As we shall discover shortly, different economic paradigms allow one to “see” different things. The paradigms orient us to different data and to different questions about the data. Conventional GNP statistics, for example, attempt to measure national economic output. They leave out, however, the value of things produced in the home for family use (because they are not priced in markets) and the value of social maintenance (that is the cultivation of inter-personal ties that transform a group of people into a community). Feminists economists note that such oversights are not random, they often exclude the experiences and contributions of women in the economy.

Ecological economists have criticized GNP statistics for their incomplete treatment of “natural capital” (such as exhaustible resources or the earth’s capacity to absorb wastes). We’ll explore what this means in the text. The point here is that even the numbers that economists use to “describe” the level of a country’s economic activity reflect paradigmatic visions. There is no neutral, objective, “theory-less” scale with which to measure economic activity.

(II) Abstractions Used to Organize Data. Even when two observers “see” similar objects, people from different paradigms may organize their observations differently. People’s conceptual frameworks provide the categories (the concepts or abstractions) for linking and integrating observations. Marxist and feminist economists, for example, organize economic observations about inequality with respect to the customs and institutions of a social system. They knit together their analysis with categories that link individual actions to culturally given social roles. Neoclassical economists talk about individuals rather than social systems and have few categories or concepts linking individual behaviors to social structures. (Precisely what this distinction means will occupy us in chapter 2)

III) The Language Used. Almost all paradigms develop specialized languages by using familiar words in special ways and occasionally creating new terms. Just as a paradigm’s abstract concepts are linked together, it’s language is interactively constructed. Groups of words are often used reciprocally to define each other.

The language of a conceptual framework inevitably shapes how questions are posed and how events are understood. Even when “jargon” appears to be absent because of the presence of familiar words, the paradigm’s specialized use of these words imposes it’s voice on the discussion. This book will try to point out to you how your main textbook is shaping your thinking through its paradigmatic use of language. By emphasizing the “constitutive impact” of language on thought, paradigmatic epistemology challenges the tendency of blank slate epistemology to treat language as a neutral medium for conveying prior and universal ideas.

One of the problems in attempting to compare paradigms is the tendency for participants in one paradigm to translate the ideas from another paradigm into their own language. When this happens, the translated ideas often lose the meaning that they had in their original language. Learning a second paradigm is like learning a foreign language, you don’t really have command of the alternative paradigm until you learn to think in it directly, without translating. Because learning a new paradigm is a major investment, most neoclassical economists are relatively unfamiliar with the “real” content of heterodox paradigms. This commentary will try to point out where the quick and dirty translations offered in conventional microeconomic textbooks of heterodox ideas break down. Because of most readers’ lack of background in alternative paradigms, even our discussion will lose some of the richness of alternative economic theories.

(IV) Ways of Testing Theories. People holding blank slate ideas about epistemology can accept that paradigms initially influence the data attended to and the abstractions used to organize data without abandoning many blank slate conclusions. The key question is whether paradigms condition the way theories (and paradigms themselves) are tested and evaluated. From a blank slate perspective, it seems relatively easy to discredit incorrect paradigms. Experiments can be designed to test whether one conceptual framework explains the world better than another. The results can be evaluated “objectively” and all observers quickly converted to a common paradigm.

From a paradigmatic perspective, things are trickier. People’s conceptual frameworks inevitably influence how they test their theories. People tend to respond to failed predictions or data that challenges their ideas by making minor modifications within their existing conceptual frameworks. People seldom shift conceptual frameworks. When doctors become baffled by a new disease , for example, they do not jettison the germ theory of disease, they try to refine it so it can be applied to the anomalous case. When a Freudian psychoanalyst’s treatment of a patient’s phobia fails to “cure” the patient, the analyst does not give up Freudian theory, he tries to find another explanation for the person’s behavior within Freudian theory. Even when answers are not found for anomalous cases, most thinkers tolerate the anomalies on the assumption that answers will be found in the future.

We shall see the same tendency to search for answers within existing paradigms in economics when, for instance, economists mispredict inflation and unemployment rates. Classical economics asserted that markets automatically produced full employment without government assistance. In the great depression the U.S. economy averaged about 18% unemployment for nearly a decade. The unemployment rate peaked at about 25% in 1932. Rather than reject the notion of automatic full employment, the “New Classical” economists made minor changes in their models which allowed them to explain the depression without giving up their full-employment, laisse-faire policy conclusions.

In contrast with Classical economists, Keynesians argue that capitalist economies can have unemployment problems. In the 1960s the Keynesians argued that too little aggregate demand caused unemployment and too much aggregate demand caused inflation. The stagflation of the late 1970s (simultaneous unemployment and inflation) appeared as devastating for existing Keynesian theory as the great depression was for Classical economic theory. However, just like the New Classical theorists, the Post-Keynesians made modest changes within Keynesian theory which allowed it to explain stagflation without abandoning its basic ideas [CC1] .

Orthodox Marxist economists have appealed to their own epicycles to reconcile their failed predictions (for example that profit rates have a tendency to fall in mature capitalist economies) to the data. These epicycles (by Marxists, Classical economists, Keynesians, etc) are not constructed in bad faith. They are not debating tricks devised by partisans to save face. They reflect a reasoned way of seeing the world within a conceptual framework.

Put material below in a box?

Thomas Kuhn provides the classic example of paradigmatic reasoning in his study of the history of earth centered astronomy. From before the second century BCE until ~1500 CE, astronomers, philosophers, and educated observers believed that the sun rotated around the earth. This belief was part of a larger conceptual framework that linked ideas about the natural world with religious beliefs and ideas about the nature of human society.

The science of the period sought to explain how things worked and why the universe took the form it did. Astronomers predicted the motion of the heavenly bodies with models that assumed the planets orbited the earth in circular fashion. They also argued that this was because the circle was the most perfect form and the earth the most important object in the universe. These thinkers would have rejected any explanation of the motion of the planets that didn’t include a coherent reason for why the planetary system took the form it did. The assumption that the universe had a purposeful design was called the “principle of sufficient reason” (check [CC2] ).

Like modern scientists the astronomers were accountable to the facts. When observations contradicted their predictions, as they did as telescopes improved, they amended their theory to make it consistent with the facts.

As figure # illustrates, the appearance of observation 7 challenged the assumption of circular orbits. After satisfying themselves that the anomalous or puzzling data was not due to mismeasurement, the astronomers attempted to revise their theories to incorporate the new information. Their answer: the universe was even more perfect than they had realized. The heavenly bodies orbited the earth in circles on circles, or epicycles (see figure ## below). When even better telescopes discovered continuing divergences from predicted epicyclic orbits, the astronomers theorized epicycles on epicycles. Thomas Kuhn has demonstrated that such a system can in fact “explain” (successfully predict) the appearance of astronomical motions in the night sky.[3]

Insert figures

The model flourished for about 1700 years. Modern science has rejected an earth-centered astronomy in favor of a sun-focused solar system with elliptical orbits. It has entirely given up the project of explaining why the universe takes the form it does. Modern science does not argue that the ellipse is a more perfect form than the circle; it simply ignores the question of why the universe has the form it does.[[4]] One of the major battles between different paradigms often concerns what are legitimate and important questions. Conventional economics, for example, argues that where consumer tastes come from is not a legitimate question for economics. Other paradigms of economic theory disagree

End of Box

Let us return now to the riddle about the doctor and the football game. I have asked it for twenty years in my introductory economics classes. There

tend to be two sets of answers . The first group offers couplets, like:

“ (1) The doctor gave his sperm to a sperm bank and the boy was fathered from the bank. (2) The doctor was God.”

“(1) …by using this tack he (the doctor) wants to increase his wage…(2) His mother may have married twice.”

“ (1) The doctor is very confused. (2) The boy was messed up beyond recognition.”

“(1) It was a supernatural event….(2) The doctor (is) … a part time priest.”

“(1) Boy’s dead father was adoptive father. (2) Father in car was Catholic priest.”

The second group includes the possibility that the doctor is the boy’s mother. There is no reason to assume that this is the case, but the interesting thing about the riddle is the degree to which traditional stereotypes prevent some people from even considering the possibility. Many students (both male and female) make revision after revision in their answers (epicycle) without conceiving of the possibility that the doctor may be a woman. Such is the power of paradigms; they assert themselves before you think and before you “see”, to some extent, they think and see for you.[5] We shall see this is the case for economic paradigms and to some extent the purpose of this book is to “problematize” or “de-naturalize” neoclassical theory, so you can choose to think within or outside of its boundaries.

Normal Science and Scientific Revolutions

Thomas Kuhn, the most famous historian and philosopher of science of the 20^th century, provides a very useful way of thinking about the impact of paradigms on scientific research. He distinguishes between “normal science” which takes place within the dominant existing paradigm and “scientific revolutions”, which involve paradigm shifts. The latter resemble gestalt shifts. They go beyond integrating new information into a pre-existing conceptual framework; they redefine the meaning given to old information, much like the background/ground shifts in perception noted above.

From a blank slate perspective it would be imagined that the causes of a scientific revolution are the accumulation of intolerable contradictions within the old framework and the emergence from the data of a self-evidently superior new framework.

Kuhn’s historical studies paint a more complex picture. The superiority of new frameworks often appears only after the jettisoned paradigm has atrophied. The superiority may be as much a result as a cause of the scientific revolution. It is not clear that the boundaries of older systems could not have been stretched to compete with the triumphant framework.

The allegiance of obvious geniuses. such as Albert Einstein, to “defeated” paradigms suggest that choices are not simple matters of logical deduction. Like many human judgments there often appear to be cultural and sociological factors involved with determining what seems a reasonable way to think about something.

A paradigm is like a language. It evolves through shared use. The community of people who work within a paradigm determine how it develops. Their judgments are usually influenced by the projects they wish to pursue. As we will see in chapter 2, neoclassical and heterodox economists have often wanted to pursue different projects and so taken economic theory in different directions. The result is the paradigm debate described in this book.

***

INTERMISSION

Some Study and Discussion Questions

I) Simple Study Questions (making sure you got the basic ideas)

1) What is meant by the term “paradigm”? Compare and contrast paradigmatic and blank slate epistemologies.

2) How does a paradigm influence thinking?

3) What is meant by the terms: “normal science”, “epicycle”, and “scientific revolution”?

II) More Thought Provoking Discussion Questions

1A) Blank slate theorists imagine that history (and a college history course) is like a movie about the past. The course “playsback” what happened as if the instructor or the textbook were a cam corder that recorded (and later reflected back) the events that transpired. What alternative cinematic metaphors for the telling of history might a paradigmatic theorist use?

1B) Why according to the paradigmatic perspective is the writing of history (say the history of the US from 1700-1900) more than narrative reporting?

2) Read pages 1-9 in Thomas Kuhn’s famous book: The Structure of Scientific Revolutions. What is the image of science that Kuhn is attacking?

3) Explain what Kuhn means in the quotes below from the above reading.

A) “Scientific fact and theory are not categorically separable, except perhaps within a single tradition of normal-scientific practice. That is why the unexpected discovery is not simply factual in its import and why the scientist’s world is qualitatively transformed as well as quantitatively enriched by fundamental novelties of either fact or theory.” (p. 7)

B) Observations and experience can and must drastically restrict the range of admissible scientific belief, else there would be no science. But they cannot alone determine a particular body of belief. An apparently arbitrary element, compounded of personal and historical accident, is always a formative ingredient of the beliefs espoused by a given scientific community at a given time.” (p. 4)

4) Assess the following claims from the perspective of paradigmatic epistemology,

“The problem is that everyone is limited by their paradigm. What we need to develop is a paradigm free science, then we could free ourselves from bias.”

“I know we interpret the world differently, but let’s look at the facts”’

5) Simple translating machines can offer definitions of words in a foreign language. Why might the task of designing a “translating machine” be a complicated one (i.e., why can’t you use the computer’s massive memory to simply match each foreign word with the appropriate English word)? What does the complexity of translation suggest about the nature of knowledge?

***

End of Intermission

Refinements of Paradigmatic Epistemology

Implications for Reading Introductory Textbooks

Learning New Paradigms. How do people learn new paradigms, such as neoclassical, institutionalist, or Marxist economics, that is how do people learn to “see” and to think in new and distinctive ways? The answer to this question will tell us a lot about the logic and structure of your micro textbook.

The goal of introductory econ classes is frequently stated as teaching students to “think like economists” (read neoclassical economists) which means teaching students to approach economic questions in a certain way, to think within a particular conceptual framework and not to think like an historian, an anthropologist, or a non-neoclassical economist. In other words, the goal of your textbook is to initiate you into the neoclassical paradigm.

Learning a paradigm involves learning abstract principles and concrete examples of their application, what Thomas Kuhn calls “shared exemplars”. Kuhn notes that by studying a series of examples, students learn to see new problems as variants of previously solved problems. Thus learning a paradigm can be said to involve learning to draw the appropriate analogies, to highlight some characteristics of two situations and suppress others. In learning neoclassical economics, intro texts teach students what to attend to and what to ignore in economic analysis; what questions to ask and what questions to suppress.[6]

Teaching a paradigm resembles sharing a worldview. The goal is to construct a context within which certain “stories” can be told as the audience fills in the gaps with expected background. The capacity to draw appropriate analogies and supply the necessary background is sometimes called “tacit knowledge.”

Your textbook is designed to cultivate that knowledge, with the topics selected for discussion, the examples offered, even the jokes shared (in the text and in class) geared towards teaching you to fit a multi-dimensional reality into the boxes offered by neoclassical economics. This chiseling of the world into a paradigmatic narrative is attempted by all paradigms and is not a flaw in the neoclassical approach. In order to study reality we must simplify it and look at it from some angle. Paradigm debates are about what simplifications and angles of vision to use, not about whether to use simplifications.

In criticizing the angle of vision offered in your textbook we will critique all of the techniques by which your text constructs the neoclassical paradigm. In particular:

1) We will criticize the abstract principles the text explicitly offers for analyzing economic activity.

2) We will dissect the text’s “shared exemplars” and try to show why these examples may miss fundamental aspects of the topics they claim to illuminate

3) We will examine the system of analogy that the text tries to develop and attempt to show why the “shared exemplars” may not generate satisfactorily offspring even when helpful for thinking about their original problem

4) We will draw attention to the questions ignored and subjects suppressed in economics by the adoption of a neoclassical perspective

5) We will critique the language and metaphors used by the textbook to conform discussion to neoclassical ways of thinking

In sum, we will critique the “tacit assumptions” underlying neoclassical analysis and its basic framework. We will try to problematize the arguments your textbook tries to “naturalize” by suggesting alternatives to what the text portrays as the “natural” way to “see” the world. We will give special attention to the stories and imagery conjured up by neoclassical language, for as McCloskey notes (quoting Rorty), “It is pictures rather than propositions, metaphors rather than statements, which determine most of our philosophical [and economic] convictions (75).”

Conclusion: Some Implications of Paradigmatic Theory of Knowledge

for Social Science and Economics

(1) Centrality of paradigms to research results. The paradigmatic model of knowledge emphasizes the impact of conceptual frameworks on research findings. It recommends focusing carefully on the basic assumptions that define a paradigm’s organization of inquiry. Because these assumptions are frequently taken for granted and only “tacitly” acknowledged, it’s often difficult to realize the limitations of the frame of reference one is learning. This book tries to remind you of the limitations of the glasses you put on when you look at the world and like a conventional neoclassical economist.

(2) Distinguishing between inter and intra-paradigm debates. The paradigmatic framework also suggests that it is very helpful to distinguish between inter-and intra-paradigm debates. Debates between members of the same paradigm (intra-paradigm debates) are much more easily resolved by empirical data because the participants are wearing the same glasses and asking similar questions. Inter-paradigm debates are frequently mired in confusion. It is often as if an accountant asked a poet which is larger the letter k or the letter z.

(3) Indeterminacy of paradigm debates. Because proponents of different paradigms epicycle within their own conceptual frameworks, it is difficult to resolve paradigm debates. This problem is confounded by the fact that each paradigm tends to define what the important issues are a bit differently, so what appears a devastating gap to one observer may be an acceptable anomaly to another.

(4) Pedagogical implications. The paradigmatic framework has interesting implications for how people learn new ideas. It envisions a two step process. Any new paradigm must initially be learned within the language and categories of an old paradigm. This is inevitably unsatisfying as some of the categories of the new paradigm don’t really fit in the existing paradigm’s categories. Eventually, after enough of the new paradigm has been absorbed, however imperfectly within the categories of the old paradigm, a paradigm shift can occur. The new ideas are reconfigured in line with their own logic. This reorganization is often characterized as the “A ha” experience, and represents a gestalt shift. It’s an exciting moment.

Final Questions for Discussion and Review

1) For each of the blank slate characterizations listed below offer a paradigmatic alternative and explain your reasoning.

Category Blank Slate Paradigmatic

Concept Alternative

Nature of Descriptive

Observation

Nature of Neutral Medium

Language for Conveying Ideas

Nature of Passive

The Knower

Nature of Objective, Universal

Truth

2) Evaluate the statements below from a paradigmatic perspective.

A) “We all agree on the important questions in economics, but different paradigms come up with different answers to these questions.”

B) While the examples of economic reasoning in introductory texts are helpful in introducing students to economic ideas, the neoclassical paradigm could be conveyed entirely by detailing its abstract principles.

[1] Is it fair to judge neoclassical economics by its introductory textbooks which necessarily simplify the theory in order to teach it to beginning students? It is possible that most of the criticisms of textbook economics presented in this commentary are attacks on a strawman, easily parried by his older brother, “profman”? I don’t think so. While the mathematics gets more complicated and the applications of the theory more ingenious, the basic ideas of econ 101 echo in upper-level undergraduate courses, graduate courses, and scholarly journals. Introductory textbooks necessarily focus on the central ideas of a theory. What’s included (or excluded) in neoclassical intro texts often reveals more about the underlying ideas of neoclassical theory than the structure of advanced graduate courses. Because most standard introductory microeconomics texts do capture the core of neoclassical theory, the authors are not shy about offering unqualified public policy recommendations based on the simplified analyses presented in the texts.

[2] Among other schools comprising heterodox economics are Post Keynesian economics, humanistic economics, socio-economics, Austrian economics and contextual economics.

[4]Modern physics has similarly given up Einstein's pursuit of a deterministic physics and posits that the world is probabilistic at the sub atomic level. Given exactly the same pre-conditions quantum mechanics implies that different outcomes are possible, implying a fundamental randomness to the universe. Einstein believed that the apparent randomness was due to incomplete information and demanded that physics search for the hidden cause of different outcomes. The debate over whether the universe is deterministic or stochastic is ultimately an aesthetic debate and not really resolvable by appeal to data. Economists, in much the same way, debate whether macroeconomics can be fully grounded in micro economics- or whether human action can be formally modeled.

[5] I have had several interesting experiences telling this riddle. On one occasion one of my male students repeated the riddle back to me to make sure he understood it. When he came to the end of the riddle the young man said, “And the doctor walks and he says I can’t operate that’s my son.” I indicated that he had the riddle just about right, but not exactly right, and repeated the story with the correct phrasing at the end (“And the doctor walks in and says I can’t operate that’s my son.” The student could not identify the difference between our renditions of the riddle. I narrowed the focus to the last phrase, but the student remained unable to hear my description without inserting the word “he” in his reproduction. It was a powerful example of the impact of preconceived notions on the data attended to.

About 20 years ago I told the riddle to two female medical students. They did not include the boy’s mother in their answer. One can speculate about what this implied about their medical school’s treatment of women.

The fluctuations in student responses to the riddle over the last 20 years is interesting. For the first 5-10 years the percentage including “the doctor is the boy’s mother” grew, peaking at a little more than half. More recently the number has been falling, dipping below 50%..

[6] McCloskey offers a helpful discussion of the impact of paradigms on economic reasoning in her analysis of the role of metaphors and analogy in economics. She writes, (quoting from Perelman and Olbrechts) “’… the acceptance of an analogy … is often equivalent to a judgment as to the importance of the characteristics that the analogy brings to the fore’ (82-83).” She then analyzes Gary Becker’s characterization of children as durable goods, “ A beginning at literal translation would say, ‘A child is costly to acquire initially, lasts for a long time, gives flows of pleasure during that time, is expensive to maintain and repair, has an imperfect second-hand market…the list of similarities could be extended further and further-gradually revealing the differences as well—“ (77) While no neoclassical economist would equate a refrigerator with a child, the paradigm does assert the priority of the metaphor, over, for example, the metaphor of a child as a “Thou” in Martin Buber’s language, a presence with which people can have “human” as opposed to “object” relations. What neoclassical theory does with its metaphors, models, and analogies is to give priority to thinking about the world in a particular way. Students and other potential users of economic paradigms have to decide whether the language and categories of neoclassical theory are an adequate framework for organizing analysis of the economy.