Uskali Mäki

If models can be true, where is their truth located? Giere (Explaining science, University of Chicago Press, Chicago, 1998) has suggested an account of theoretical models on which models themselves are not truth-valued. The paper suggests modifying Giere’s account without going all the way to purely pragmatic conceptions of truth—while giving pragmatics a prominent role in modeling and truth-acquisition. The strategy of the paper is to ask: if I want to relocate truth inside models, how do I get it, what else do I need to accept and reject? In particular, what ideas about model and truth do I need? The case used as an illustration is the world’s first economic model, that of von Thünen (1826/1842) on agricultural land use in the highly idealized Isolated State.

Many participants in the debate over the current state and recent developments of economics make claims that are unrefined, simplistic, often exaggerated. This is understandable: the stakes are high, the issues trigger emotional responses, and few participants are motivated or equipped to seek more nuanced analyses. To assert, or to deny, that economics as a scientific discipline or a particular part of it (such as a model) is about reality – or refers to reality, represents it, is true about it, or is truthlike about it – is to make a very complex and highly ambiguous claim. 1 The disputants often make claims that have parallels in the philosophical controversy between scientific realists and their opponents, or at any rate those claims can be partly analyzed in terms of some of the arguments presented in this philosophical controversy. The question addressed here is whether realism about economics is a viable position. The argument proceeds by way of refuting a number of arguments against realism about economics. I suggest a genuine controversy over the factuality of any particular strand or piece of economics requires realism as a general interpretation of economics – or at any rate requires debunking the anti-realist arguments discussed below. “The issue of realism” as most economists would recognize it, is not exactly the issue of realism as philosophers recognize it. “The issue of realism” in economics is about realisticness as a property of theories , while (part of) the issue of realism in philosophy is about realism as a theory of theories . But some parts of the issue of realisticness (such as those related to reference and truth) in economics can be translated into aspects of the issue of realism as a theory of theories. Thus there is also an issue of realism (with no quotation marks) in economics. It is this issue of realism that has to be settled as a prerequisite for critical assessments of important forms of realisticness of economic theories.

The paper seeks to offer [1] an explication of a concept of economics imperialism, focusing on its epistemic aspects; and [2] criteria for its normative assessment. In regard to [1], the defining notion is that of explanatory unification across disciplinary boundaries. As to [2], three kinds of constraints are proposed. An ontological constraint requires an increased degree of ontological unification in contrast to mere derivational unification. An axiological constraint derives from variation in the perceived relative significance of the facts explained. An epistemological constraint requires strong fallibilism acknowledging a particularly severe epistemic uncertainty and proscribing against over-confident arrogance.

USKALI MÄKI (Helsinki, 1951) is a philosopher of science and a social scientist, and one of the forerunners of the strong wave of research on the philosophy and methodology of economics that has been expanding during the last three decades. His research interests and academic contributions cover many topics in the philosophy of economics, such as realism and realisticness, idealisation, scientific modelling, causation, explanation, rhetoric, the sociology and economics of economics, and the foundations of new institutional and Austrian economics. He is a coeditor of The handbook of economic methodology (1998); Economics and methodology: crossing boundaries (1998); Rationality, institutions and economic methodology (1993). And the editor of two compilations of essays that have become highly influential to the shaping of the field: The economic world view: studies in the ontology of economics (2001), and Fact and fiction in economics: realism, models, and social construction (2002).

This article shows how the MISS account of models—as isolations and surrogate systems—accommodates and elaborates Sugden’s account of models as credible worlds and Hausman’s account of models as explorations. Theoretical models typically isolate by means of idealization, and they are representatives of some target system, which prompts issues of resemblance between the two to arise. Models as representations are constrained both ontologically (by their targets) and pragmatically (by the purposes and audiences of the modeller), and these relations are coordinated by a model commentary. Surrogate models are often about single mechanisms. They are distinguishable from substitute models, which are examined without any concern about their connections with the target. Models as credible worlds are surrogate models that are believed to provide access to their targets on account of their credibility (of which a few senses are distinguished).

A few aspects of the issue of realism are addressed in the context of a social science. The paper looks for adjustments needed in our conceptions of scientiflc realism to accommodate some peculiarities of economics. Ontologically speaking, economics appears to be closely linked to commonsense conceptions of the world, thus the problem of theoretical concepts does not emerge in the same form it is often taken to exist in physics. Theory formation is largely a matter of idealization and isolation among observables rather than postulation of unobservables. Given that isolative theories violate the truth in many ways, truth is more of a problem than existence in a realism pertaining to economics. The idea of significant truth -which is able to tolerare varieties of untruths in theories- is suggested to be based on the notion of the way the world works; this is a matter of the causal structure and functioning of the world. None of this is undermined by the acknowledgement that economist’s attittudes and decisions are shapped by rhetorical persuasion.

This article identifies and analyses issues related to defining and evaluating the so-called scientific imperialism. It discusses John Dupré's account, suggesting that it is overly conservative and does not offer a definition of scientific imperialism in not presenting it as a phenomenon of interdisciplinarity. It then discusses the recent account by Steve Clarke and Adrian Walsh, taking issue with ideas such as illegitimate occupation, counterfactual progress, and culturally significant values. A more comprehensive and refined framework of my own is then summarized. It suggests types and aspects of scientific imperialism as a dynamic interdisciplinary relationship, distinguishing between imperialism of scope, style and standing, for example. It also suggests normative constraints on scientific imperialism. This enables us to distinguish, in principle, recommendable from non-recommendable kinds of it, while recognizing the difficulties involved in trying to do this in practice

Modeling involves the use of false idealizations, yet there is typically a belief or hope that modeling somehow manages to deliver true information about the world. The paper discusses one possible way of reconciling truth and falsehood in modeling. The key trick is to relocate truth claims by reinterpreting an apparently false idealizing assumption in order to make clear what possibly true assertion is intended when using it. These include interpretations in terms of negligibility, applicability, tractability, early-step, and more. Elaborations are suggested about their precise formulations, mutual relationships, and truth-aptness.

Geographical economics (also known as the ‘new economic geography’) is an approach developed within economics dealing with space and geography, issues previously neglected by the mainstream of the discipline. Some practitioners in neighbouring fields traditionally concerned with spatial issues (descriptively) characterized it as—and (normatively) blamed it for—intellectual imperialism. We provide a nuanced analysis of the alleged imperialism of geographical economics and investigate whether the form of imperialism it allegedly instantiates is to be resisted and on what grounds. From both descriptive and normative perspectives, our conclusion is: yes and no.

Compared to the massive literature from other disciplinary perspectives on interdisciplinarity, philosophy of science is only slowly beginning to pay systematic attention to this powerful trend in contemporary science. The paper provides some metaphilosophical reflections on the emerging “Philosophy of Interdisciplinarity”. What? I propose a conception of PhID that has the qualities of being broad and neutral as well as stemming from within the agenda of philosophy of science. It will investigate features of science that reveal themselves when scientific disciplines are viewed in comparison or in contact with one another. PhID will therefore generate two kinds of information: comparative and contactual. Comparative information is about the similarities and differences between disciplines, while contactual information is about what happens and why when disciplines get in contact with each other. Virtually all issues and resources within the philosophy of science can be mobilized to bear on the project, including philosophical accounts of models, explanations, justification, evidence, progress, values, demarcation, incommensurability, and so on. Given that scientific disciplines are institutional entities, resources available in social epistemology and social ontology will also have to be invoked. Why? Establishing PhID is presently an obvious step to take for several reasons, including the following two. First, ID is an increasingly powerful characteristic of contemporary science and its management, and so it would be inappropriate for an empirically informed philosophy of science to ignore it. Second, contemporary philosophy of science happens to be particularly well equipped for addressing issues of ID thanks to the recent massive work in the more specialized fields of philosophies of special disciplines. How? Given the breadth and heterogeneity of its domain and tasks, the practice of PhID must be heavily collective. It must mobilize multiple competences and it must keep elaborating a systematic agenda. While a lot of new conceptual work is needed, the approach is bound to be emphatically empirical, with a cumulative and mutually complementary series of case studies to be conducted. Among the methods to be employed, good old textual analysis of scientific publications will be supplemented with interviews, ‘experimental’ techniques, participant observation as well as various interventionist approaches. The published work in PhID will often be authored jointly by philosophers and other scholars in science studies as well as practitioners in various scientific disciplines.

In what follows, I will give examples of the sorts of step that can be taken towards spelling out the intuition that, after all, good models might be true. Along the way, I provide an outline of my account of models as ontologically and pragmatically constrained representations. And I emphasize the importance of examining models as functionally composed systems in which different components play different roles and only some components serve as relevant truth bearers. This disputes the standard approach that proceeds by simply counting true and false elements in models in their entirety and concludes that models are false since they contain so many false elements. I call my alternative the functional decomposition approach.

Introducing the ontology of theory choice Economists choose theories and they choose ways of pursuing theories, and they leave others unchosen. Why do economists choose the way they do? How should economists choose? What are the objectives and what are the constraints? What should they be? The questions are both descriptive and prescriptive. There are two broad classes of “criteria of choice” that have been somewhat systematically considered in the recent literature on economic methodology: (1) Empirical criteria. There are several possible ways of incorporating empirical criteria in one's theory of science. The respective methodology of theory assessment may be static or dynamic, it may be deductivist or inductivist, it may include various ideas of what constitutes empirical evidence, and so on. What they all share is the general idea that scientific theories are, or are to be, checked against empirical evidence according to some rules, and that this determines the choice of theory. (2) Social criteria. Again, there are several options. The social criteria may be related to the social interests of scientists or larger social collectives, they may be based on the persuasiveness and tradition-boundedness of theories, they may involve social or moral norms, they may be derived from various costs and benefits of holding a theory in a given research community, and so on. If they involve empirical data, it is the social aspects of the data that matter. What all these views share is that scientific theories are taken to have social attributes (functions, consequences) that play or should play a major role in theory choice.

So you're an economist? You study everything that can be gauged by the measure rod of money? You view human interaction in terms of supply and demand in the market? You depict human action as seeking self-interest in a calculative manner? Is this indeed your view of the world? If you are an economist and somebody has attempted, or might attempt, to embarrass you with such questions, you should read this book. If you are a non-economist inclined to raise such questions, you too should study the essays collected in this volume. If you are a philosopher interest in the peculiar characteristics of the 'dismal science', this is a book to read. The book examines aspects of the economic world view from a variety of perspectives by raising shamelessly deep questions. This is a book in the ontology of economics.

The tone of this paper is largely critical. Therefore, I would like to begin by praising Donald McCloskey and Arjo Klamer for their exciting and provocative initiative in the metatheory of economics. They have done us a great favor by opening our eyes to some hidden aspects in the intellectual practices of economists. They have shown that economics is rhetoric; it is persuasion, discourse, conversation, and negotiation, to use their favorite phrases. They have provided plausible arguments and illuminating examples to convince us of the literary character of economic reasoning, notwithstanding the formal languages used by economists and the positivist pretensions typical of the self-image of the discipline. However, McCloskey and Klamer have been less successful in trying to convince us of what economics is not. In particular, it concerns me that they have opened up a gap between rhetoric and realism. They seem to think that because economics has a rhetorical character, it cannot be understood in realist terms. I will argue that this view is mistaken: rhetoric and realism do not exclude each other, but rather they are capable of being combined in a coherent methodology of economics. It is a valuable contribution to import the insights of the newly rehabilitated rhetoric to the metatheory of economics; but it is unnecessary to marry them with enthusiasm about the fashionable anti-realism of Richard Rorty and others. While this is my overall thesis, it is clear that only initial steps towards its substantiation can be taken in this paper. I intend to proceed as follows. I will first make an attempt to locate the problem at hand in the history of the metatheory of economics. Then I will point out those elements in rhetorical metatheory as practiced and defended by Klamer and McCloskey that apparently have anti-realist or non-realist assumptions or implications, either directly or via considerations of scientific rationality. Next I will formulate a few concepts of realism, the differences between which have been ignored in the methodology of economics to this day. Then I will make preliminary attempts to inquire into the mutual compatibility of the rhetorical insights provided by McCloskey and Klamer and realism in this context. I will show that, in principle, there should be no insurmountable obstacles to combining the two; in some of its senses, realism will even turn out to be presupposed by the rhetorical approach. I do not primarily intend to argue for realism as such in this paper. Instead, I will argue for the compatibility of realism and rhetoric. The argument is based on Klamer's and McCloskey's own commitments; in this sense, the argument is immanent to their rhetorical approach. As a final point, I will argue that one should not be indifferent about realism: it does make a difference in economics and in the methodology of economics whether rhetoric is accepted with or without realism.

In order to examine the fit between realism and science, one needs to address two issues: the unit of science question (realism about which parts of science?) and the contents of realism question (which realism about science?). Answering these questions is a matter of conceptual and empirical inquiry by way local case studies. Instead of the more ordinary abstract and global scientific realism, what we get is a doubly local scientific realism based on a bottom-up strategy. Representative formulations of the former kind are in terms of the truth and reality of the posits of current science, in terms of warranted belief, in terms of mind-independent unobservable entities. Using illustrations mainly from the social sciences, doubly local scientific realism denies the global applicability of such formulations and seeks to make adjustments in their elements in response to information about local units of science: It is sufficient for a realist to give the existence of an entity (and the truth of a theory) a chance, while in some areas we may be in s position to make justified claims about actual existence (and truth). Logical inquiry-independent existence is sufficient for the social and human sciences, while mind-independence will be fine for many other domains. It should not be insisted that the theoretical posits of realist science be strict unobservables in all areas: most theoretical posits of the social sciences are idealized commonsensibles, such as elements in folk psychology. Unsurprisingly, this sort of local strategy will create space for realism that is able to accommodate larger areas of science without sacrificing traditional realist intuitions.

Is economics a proper science at all? Or if it qualifies as a science, does it underperform, does it fail to fulfil its scientific duties? Does it perhaps just pretend to proceed as a science by applying principles and techniques that are not suitable for addressing its proper subject matter and for meeting the legitimate expectations? There is a long and live tradition of economics-bashing and economics apology in posing and answering such questions. One popular current in this tradition is to blame economics for being theory-driven or method-driven or driven by whatever else but the world or empirical evidence or observation. Economics thus does not care about the real world – indeed, being so deeply shaped by its favourite theories and methods disconnects economics from the world. The alternative to this gloomy scenario is for a discipline to be evidence-driven or world-oriented or to be guided by some such proper scientific ethos. Being theory-driven involves stressing scientific virtues such as simplicity, coherence, convenience, tractability, formal rigor, theoretical elegance, and so on. Being observation-driven or world-oriented means emphasizing the importance of truth, complexity, empirical testing, practical relevance, and so on. Sometimes the former is characterized as a deductive approach, in contrast to the latter inductive approach. Diagnosis of the failures of economics and advice for how to do better economics is often put in such dichotomous terms. This popular way of framing the issues and debates is all too simplistic and outright distortive....

The cultural and epistemic status of science is under attack. Social and cultural studies of science are widely perceived to offer evidence and arguments in support of an anti-science campaign. They portray science as a mundane social endeavour, akin to religion and politics, with no privileged access to truthful information about the real world. Science is under threat and needs defence. Old philosophical legitimations have lost their bite. Alarm bells ring, new troops have to be mobilised. Call economics, the good old friend of the status quo depicting it as a generally beneficial social order while accommodating a rather mundane picture of human behaviour. In contrast to constructivist and relativist sociology of scientific knowledge, economic accounts of science seek to provide a rigorous defence of the cultural and epistemic legitimacy of science by accommodating plausible elements in the sociological accounts and by embedding them in invisible-hand arguments about the functioning of some market-like structure within science. Viewed through economic spectacles, science re-emerges from the ashes as stronger and more beautiful than ever. A spectator raises an innocent question: is economics itself strong and beautiful enough to offer such alleviating services? In order to examine the emerging issue of disciplinary credibility, we need to look at economics itself more closely, and we need to address traditional issues in the philosophy of science as well as less traditional issues of reflexivity. We will see that the above caricature concerning the role of economics in the science wars calls for heavy qualifications if not wholesale rejection

Realism and Russia? Realism is a notion with multiple meanings, so options abound as to how the two might connect with one another. An old Russian proverb conveys a realist message about social properties: "An individual in Rssia was composed of three parts: a body, a soul, and a passport." (Ruben 1985, 83) Having a passport signals the possession of a complex set of social properties, and if these are taken to be real in some appropriate sense, one is inplying a realist view in social ontology. In another sense of the word, realism is a live issues in the study of international relations. Political realism considers the behaviour of states by emphasizing the importance of national interests and the drive for power on the one hand, and the suppression of moral concerns on the other (e.g. Donnelly 2000). Russian realists hold diverse views about the newly emerged unipolar global power structure and Russia's proper strategy for adjusting to this structure (e.g. Shakleyina and Bogaturov 2004). Realism is a family of viewpoints also in the arts (including painting, music and literature) and their study. Socialist realism is a version that used to be an official doctrine in Russia, gently requesting artists to optimistically represent society's march towards communism, glorifying the heroic role of the proletariat in driving the process. Socialist realism was also well known elsewhere. So much so that in the 1970s, a philosophy professor at the University of Helsinki announced to give a lecture course on "scientific realism" but on its way to the university catalogue through the university administration, the title of the course was transformed into "socialist realism". In the spirit of rectifying that old administrative mistake, the remards to follow deal with scientifit realism as a philosophy of science. The general issue to be addressed is how the social sciences relate to the social world, in both directions.

In the latter half of the 19th century, economic thought in the Germanspeaking world was dominated, both intellectually and academically, by the so-called historical school, from Wilhelm Roscher to Gustav Schmoller and others. In 1871, the Austrian Carl Menger published his Grun&tze der Volkswirtschaftslehre (Menger, 1976 (1871)), customarily referred to as one of the three simultaneous discoveries of marginalist economics-the other two marginalist ‘revolutionaries’ being Jevons in England and Walras in France. Twelve years later, in 1883, Menger published a major methodological treatise entitled Untersuchungen iiber die Methode der Socialwissenschaften und der Politischen Oekonomie insbesondere (Menger, 1963 (1883)). This book included criticisms of some of the historicist principles of doing economics. In the same year, Schmoller, leader of the German historicists, wrote a critical review of Menger’s book (Schmoller, 1883). Menger reacted forcefully with a more straightforwardly polemical small book, Die Irrthiimer des Historismus in der deutschen National6konomie (Menger, 1884). Commentaries by others appeared in later years, but this brief episode amounted to what has thereafter been called the Methodenstreit between Menger and Schmoller. It has been established as perhaps the most famous methodological controversy in the history of the social sciences.

Science is often said to aim at truth. And much of science is heavily dependent on the construction and use of theoretical models. But the notion of model has an uneasy relationship with that of truth. Not so long ago, many philosophers held the view that theoretical models are different from theories in that they are not accompanied by any ontological commitments or presumptions of truth, whereas theories are (e.g. Achinstein 1964). More recently, some have thought that models are not truth-valued at all, but truth-valued claims can be made about similarity relations between models and real systems (e.g. Giere 1988). Others suggest that models are instruments that can be used for attaining truths, for example that models are false means for true theories (e.g. Wimsatt 2007). At the same time, philosophers and others keep talking about models being ‘correct’ and ‘incorrect’, ‘accurate’ and ‘inaccurate’ or getting facts ‘right’ or ‘wrong’. Among practicing scientists, one can find both the notion of a ‘true model’ and the idea that ‘it is in the nature of models that they are false’. There seems to be enough variety of views and confusion around them to invite a little bit of further investigation (see also Mäki 1992, 1994, 2004, 2009a,b,c).

The new economic sociology claims to have adopted the notion of performativity from J.L Austin, has put it in new uses, and has given it new meanings. This is now spreading and has created another vogue term in the social and human sciences. The term is taken to cover all sorts of aspects in the ways in which the use of social scientific theories have consequences for the social world. The paper argues that the expansive use of 'performativity' obscures the Austinian idea and thereby impoverishes the conceptual resources available for analyzing the nuances in the complex theory/world connections. Importantly, it blurs the difference between constitutive and causal relationships, both of which actually are involved. Instead of economics performs the economy as the sociologists say, it would make more sense to say, the economy performs economics – but even this would be undermotivated.

Contemporary philosophers of science argue that models are a major vehicle of scientific knowledge. This applies to highly theoretical inquiry as well as to experimental or otherwise observational research, in both the natural and the social sciences. Making this claim is not yet very illuminating, given that there is a large variety of different kinds of model, and a number of ways in which they function in the service of science. The ambiguity of the term ‘model’ and the multiplicity of kinds of model are illustrated by Pierre Duhem’s famous comparison of the mind of a continental physicist to that of an Englishman: the former strives for ‘theories’ that are formulated in ‘the clear and precise language of geometry and algebra’ and consist of abstract and idealized notions and formulae, while the latter insists on having mechanical ‘models’ that satisfy ‘his need to imagine concrete, material, visible, and tangible things’ that are familiar to ordinary experience. While the French or German physicist deals with a formalized theory in his account of electrostasis, the English account is in terms of ‘strings which move around pulleys, which roll around drums, which go through pearl beads, which carry weights; and tubes which pump water while others swell and contract; toothed wheels which are geared to one another and engage hooks. We thought we were entering the tranquil and neatly ordered abode of reason, but we find ourselves in a factory’ (Duhem 1954, pp. 70–1). Models in this sense—iconic models —employ analogies to visualize the mechanisms depicted, while formalized theories supposedly lack this property. On the other hand, it is nowadays customary to use the term ‘model’ also for such formal systems of equations, conspicuously so in the social sciences—and, much of the time, such formal systems are used for representing causal mechanisms. In relation to such a formal system, ‘model’ is also used for its various interpretations, or just for the interpretation that makes it true. The model muddle needs to be sorted out.

It is argued that rather than a well defined F-Twist, Milton Friedman’s “Methodology of positive economics” offers an F-Mix: a pool of ambiguous and inconsistent ingredients that can be used for putting together a number of different methodological positions. This concerns issues such as the very concept of being unrealistic, the goal of predictive tests, the as-if formulation of theories, explanatory unification, social construction, and more. Both friends and foes of Friedman’s essay have ignored its open-ended unclarities. Their removal may help create new common ground for more focused debate in economics. Here I show how F53 can be reread/rewritten as a socially constructivist fallibilist, and realist statement – in contrast to the received instrumentalist interpretation.