Abstract

A centipede can walk until it thinks about howit does so. Thereafter it stumbles, over thesheer impossibility of the information andcoordination required. Life in the economy islittle different. Those engaged in productionand exchange discover, pragmatically, ways tomake them work. Those observing the processsee, realistically, the immense improbabilitythat it should do so. That most economies workin practice, but must pass such toughteleological tests to succeed in theory,highlights a difference between players' andspectators' outlook which may help to explainwhy the game has repeatedly been thrown wideopen just when conclusive results seemed withinreach.Section 1 of this paper identifies the fourforms of realism which economists have tendedto adopt. Section 2 considers the pragmatism ofeconomic agents, when observed in action bypsychologists and management scholars notoverly steeped in economic theory. Theconcluding section reviews the ways in whicheconomists have tried to blur the distinction,by reclassifying agents as realistic or theirown views as pragmatic, and suggests that amore pragmatic economics might bridge thedivide