Abstract

Chapter 1 is introductory. It identifies a cluster of philosophical problems that arise in the foundations of neoclassical economic theory. Issues growing out of the unusually tenuous connection between the theory and the world are singled out as especially troublesome. Is it, after all, possible for economics to look more like an empirical science like physics than like of branch of mathematics? ;Chapter 2 argues that economic methodology has been constrained by the application of faulty philosophy of science, or by the faulty application of philosophy of science. Economists with good intentions have wanted to protect economic theory from intrusions by "unscientific" constructs that had no clear operational criteria for their application. I argue that these attempts to protect economics went astray because theoretical constructs were consequently made to answer to an excessively stringent notion of economic data. Consequently, I find means to argue that all data and, in particular, psychological data about individual economic agents is relevant in the construction and confirmation of economic theory. Actually, I advance the stronger thesis that economics actually owes us an account of the behavior of individuals and that this makes it evident that economic theory should strive to cover the widest range of phenomena is reasonable. ;Chapter 3 takes this broadened notion of economic theory as a starting point and shows why the new outlook can be expected to enrich present theory and make progress towards the project of connecting economics to the phenomena. I include explanations of how prima facie difficulties with the new outlook overcome. In the course of doing this, many striking analogies between economics and linguistics, another science that closely related to psychology, are brought out. The relatively successful resolution of methodological problems in linguistics that parallel methodological problems in economics seems encouraging. ;Finally, Chapter 4 examines a bundle of problems concerning the relationship between microeconomics and macroeconomics. Most of the conclusions drawn in this chapter are negative: I argue that the connection between the micro and the macro is more difficult to fathom than many writers seem to imply. . . . UMI