Economic methodology

[John McVey]

Here are some more thoughts I am working on. It's going to need more research, of course, but after much thought, reading, and integration, this is what I have come up with so far (in rough dot-point form) as to the methodology of the economic science:

- identify the nature of value, the nature of man, and the nature of society

- working from those, and observing key phenomena, identify the context of economics

- use that context to identify instances and characteristics of critical economic entities

- working with more observations and reasoning, continue to identify and refine valid economic concepts of economic actors and economic entities

- figure out what is rational for an individual to do in the economic context in relation to those actors and entities

- with observation of actual people, past and present, use the above to further determine what happens when lots of people actually act in that rational fashion, and attempt to identify principles of economic action

- use observations of deviations from what would normally be expected if people were acting rationally as you thought they should as guides for further questions to be asked and answered in the whole of the above fashion

- continue the above process, adding in more observations as required, in spiral fashion, to identify ever more economic principles and the structure of their interrelationships

As you might imagine, economic method is just scientific method (with due deference for its application to social sciences) applied specifically to the economic context. As to what exactly is the economic context, I have figured that out to my own satisfaction. I have also intended to publish an article on the topic for The Objective Standard for a while now, but I need to research the history of a particular critical point in more detail before I can finalise it. I need to ensconce myself in a good uni library again for a while, which I haven't had time or occasion to do for a long time. It's well overdue.

By the way, from what I have read, the Austrians focus heavily on the fifth there, and within that use almost exclusively deduction. Needless to say I raise an eyebrow at that blinkered methodology. There is nothing inherently wrong with point five, but the problem with the Austrians is that they treat that fifth point as an out of context primary, are highly rationalist in implementing it, and downplay (or worse) the necessary antecedent steps (the failure to be objective in formation of concepts and definitions is likewise common among rationalists). I have mined a fair bit of worthwhile material from the Austrians, particularly Menger and Bohm-Bawerk, and also von Mises, but I am not an Austrian and am not much of a fan of the later ones who came after von Mises.

That's enough for the time being.

JJM

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