No reader of this blog needs reminding that positivism retains a powerful grip on development studies. Not because every theorist, researcher and department carries a card or flies a flag self-identifying as positivist, but because positivist concepts of what knowledge is and how it is assessed continue to dominate, in so far as these have captured the concept of ‘science’. As Ingrid Kvangraven’s critique establishes, one need look no further than the dominance of random control trials (RCTs) for evidence of this. While there are many specific problems one might identify with RCTs, such as the capture of policy by what can be researched using RCTs rather than by what may be more significant as structural causes of poverty, perhaps the fundamental one is the model form, which stands behind RCTs. It is this that lends authority to RCTs, as it does to many other branches of economics.
Tony Lawson is probably the best known critic of mainstream mathematical modelling and in a recent interview he reprises his argument. Lawson is a ‘critical realist’ and ‘social ontologist’ and his, and other critical realists’ argument, is deceptively simple. All knowledge claims involve assumptions about the nature of the world, what and how it might appropriately be investigated. Whether this is acknowledged or not this presupposes a theory of reality or being (an ontology) and an orientation to knowledge (an epistemology). Philosophy thus has an important role in making these assumptions explicit and in exposing them to critical scrutiny to address their plausibility, consistency etc. Such philosophy does not replace the sciences or social sciences, but rather ‘under-labours’ for or supports their endeavours and is itself subject to critique in this context.
According to Lawson, much of modern economics is built around mathematical modelling. This modelling looks for patterns, but targets isolated sets of enduring relations as the significant aspect of socio-economic phenomena (though this can be more or less sophisticated as maths). As such, it presupposes human activity can be adequately captured by a method which assumes an ‘intrinsic’ and ‘extrinsic’ closure i.e. that the conditions that underpin the relation and which form the context of the relation are sufficiently unchanging for the relationship to endure (as a significant quantified outcome). However, these conditions rarely do endure since reflexive agents can alter their thinking, social structures are continually changing in smaller and larger ways and in any case, human activity is culturally variable as well as historically evolving.
The kind of mathematical modelling that dominates either cannot capture or distorts the nuance of socio-economic activity and encourages researchers to focus on quantified outcomes rather than the underlying complexity of shifting conditions that produce outcomes, which may or may not be regular for some period of time and in some place. For Lawson, this real world complexity of cumulative change does not contradict the idea that we live in capitalist societies which have ‘ways of working’ because capitalism cannot and does not stand still and is not homogeneous in a way that the modelling can capture.
In the meantime, modelling leads to arrogated authority or power to influence policy, massive waste of resources, and dominance of skillsets which do not encourage appropriate engagement with socio-economic reality (and the problems therein). This is coupled with a curious lack of ‘explanatory success’, which becomes most obvious when systems are radically changing or collapsing i.e. in crisis. Moreover, the discipline is never properly held accountable for explanatory failure precisely because of the hold mathematical modelling has over the idea of science – alternatives are dismissed as unscientific, lacking in rigour etc., rather than refuted.
There are of course, many alternatives to positivism (and its legacy) in development studies, inspired by post-structuralism, social constructivism, new materialism etc. Lawson’s underlying point is not that anyone and everyone must be a critical realist, but rather that everyone’s work benefits from philosophical engagement, what he terms doing ‘social ontology’. This is quite different than what much of contemporary disciplinary philosophy has become – disengaged from the questions that matter to people and using technical methods that prevent general understanding (much like economics itself).
The general idea that methodology and philosophy are important components in a progressive approach to economics education is, however, well established and is promoted by Rethinking and Reteaching Economics and many other pluralist initiatives and organizations. For example, it is intrinsic to the Association for Heterodox Economics annual postgraduate workshop and to the many published works of Andrew Mearman, Danielle Guizzo and Sebastien Berger (see for example here). It can also inform work on integrated mixed methods, as the work of Wendy Olsen illustrates. Olsen’s work, for example, pays particular attention to power, voice and participation in addressing development issues.
Nowhere is the explanatory failure of mainstream economics more evident than in its models of climate change. As various critics have highlighted, William Nordhaus was recipient of the Swedish Bank Memorial ‘Nobel Prize’ in 2018, despite producing models that systematically underestimate the impacts of climate change and ecological breakdown (suggesting, for example, an optimal warming of 3-40C – quite at odds with both the consensus among Earth system scientists as well as the subsequent Paris Agreement). Mainstream economic textbooks and theory has been a major source of complacency and delay over the last 30 years and have thus contributed to our ‘climate emergency’.
While this is a crisis for everyone – it is particularly acute for less wealthy countries. Not only are they liable to be less able to address climate change and ecological breakdown, but there is also a continual threat that post-Paris development policy will try to achieve necessary reductions in global resource and energy use by sacrificing the opportunities for future standards of living of the poor in order to maintain as much of the standards of the rich as is possible. While the Paris Agreement talks of ‘just transitions’ and actioning the Sustainable Development Goals (SDGs) in equitable ways, little of this seems rooted in reality.
The planet is going to force difficult decisions on us within a few short years and ‘green growth’ alternatives finesse a core dilemma that others in social ecological economics and degrowth are at least recognising as central concerns. Without due attention to the structural causes of under and over development there seems little prospect of just transitions. As Hubert Buch-Hansen and Peter Nielsen’s recent critical realist inspired textbook illustrates, economics can be on the right or wrong side of this existential challenge. Their textbook takes Lawson’s primary argument and develops it in the context of economics as a post-positivist evidence-based but not ‘value-neutral’ social science. Philosophy as if the world mattered.
Photo: Tony Lawson, by Matt2341.