Uskali Mäki

One prominent aspect of recent developments in science studies has been the increasing employment of economic concepts and models in the depiction of science, including the notion of a free market for scientific ideas. This gives rise to the issue of the adequacy of the conceptual resources of economics for this purpose. This paper suggests an adequacy test by putting a version of free market economics to a self-referential scrutiny. The outcome is that either free market economics is self-defeating, or else there must be two different concepts of free market, one for the ordinary economy, the other for science. Both conclusions will impose limits on the applicability of the ordinary economic concept of the market to the study of science

Economists customarily talk about the ‘realism’ of economic models and of their assumptions and make descriptive and prescriptive judgements about them: this model has more realism in it than that, the realism of assumptions does not matter, and so on. This is not the way philosophers mostly use the term ‘realism’ thus there is a major terminological discontinuity between the two disciplines. The following remarks organise and critically elaborate some of the philosophical usages of the term and show some of the ways in which they relate to economists’ concerns. In the philosophy of science, scientific realism is the mainstream position – or rather a heterogeneous collection of positions - that includes ideas about the nature of scientific theories and how they are related to the real world and about the goals and achievements of scientific inquiry. However, most of what philosophers have contributed around these ideas is not designed to deal with the peculiarities of economics, thus some important adjustments are needed to make scientific realism an interesting position for economists.

Ronald Coase has been a vigorous critic of mainstream economic theory, arguing that it is unrealistic and that a good theory is realistic. The attributes "realistic" and "unrealistic" appear in three senses at least in Coase: one related to narrow ness and breadth; another related to abstracting from particularities (and the issue of "blackboard economics"); and the third related to correspondence with the legal. This does not yet make Coase an advocate of realism. It is therefore separately argued that each of the three kinds of "realisticness" as a property of theories is consistent with realism as a theory of theories

Mark Blaug’s normative methodology of economics is an attempt to articulate certain intuitions about how economic science could be improved by making it more “realistic”. I discuss two such articulations, one in terms of falsificationist principles, the other in terms of an alleged trade-off between relevance and mathematical rigour. My conclusion is that Blaug’s methodology is itself unrealistic, both descriptively and normatively. His (well intended) methodological prescriptions for the improvement of economics are not based on a systematic, consistent, descriptively adequate, and normatively viable account. I suggest that Blaug’s intuitions can be developed into a more realistic account by incorporating the analysis of two further topics: economic modelling and the institutions of academic research

In everyday usage, ‘realism’ is often used as a name for a practically or epistemically low-ambition attitude, while ‘idealism’ is often taken to denote a highambition—if not utopian—attitude. In philosophcal usage, mostly, it is the other way around: those who are called realists tend to claim more than their opponents—they are the philosophical optimists. Within philosophy itself, ‘realism’ adopts a variety of interrelated and contested meanings. It is used as the name for doctrines about issues such as perceptual access to reality, the existence of universals, the goals and achievements of science, the nature of truth, the objectivity of morality, and many other things. Given this variety, no single shorthand definition of the term ‘realism’ can be provided. One manifestation of this variety is that the opponents of realism about these issues are not called uniformly by a single label (other than the rather uninformative ‘antirealism’): the labels used include idealism, phenomenalism, instrumentalism, conventionalism, fictionalism, noncognitivism, constructivism, relativism, irrealism, and others. Sometimes such labels vary from one dispute or domain to another even when similar ideas are being expressed. Sometimes they are used to make claims that are specific to the domain at hand and distinct from other antirealist theses. In what follows a brief tour will be taken along some of the representative philosophical highways and lanes, from ontology through semantics to epistemology. Along the way, realism will be confronted with some of its various opponents and internal conflicts. The philosophical landscape in the neighborhood of realism is nowadays much broader than it used to be: in a typical older encyclopedia, ‘realism’ was taken to name doctrines about universals or about perception, or both, to the exclusion of much of its present coverage, and many of the current opponents were missing from view altogether.

Economics is a culturally and politically powerful and contested discipline, and it has been that way as long as it has existed. For some commentators, economics is the "queen of the social sciences", while others view it as a "dismal science" (and both of these epithets allow for diverse interpretations; see Mäki 2002). Economics is also a discipline that deals with a dynamically complex subject matter and has a tradition of reducing this complexity by using systematic procedures of simplification. Nowadays, these procedures involve for the most part building and using mathematical models (for an overview of the philosophical issues, see Morgan and Knuuttila 2011). In the dominant circles of the discipline, one is not regarded as a serious economist having a professional expert view on any given economic or social issue without having a model about it. Much of the power of the discipline and its characteristic contestations therefore involve models and modelling: the successes and failures of the dismal queen are those of modeling. The issues involved in conomic modeling have been made particularly acute once again by the financial crisis of 2008-2009 and its aftermath: the discipline of economics is among the candidates for the major blame for failure. I will first outline some thoughts about the characteristics disciplinary conventions that guide and constrain modeling in economics. I will then summarize my account of the very ideas of models and modeling. Finally, within the framework of that account, I will highlight some major issues of contestation and sketch the respective notions of potential success and failure in economic modeling with illustrations. These notions are motivated by my subscription to a (flexible and discipline-sensitive) realist philosophy of science (e.g. Mäki 2005).

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

Much of biological and economic theorizing takes place by modeling, the indirect study of real-world phenomena by the construction and examination of models. Books and articles about biological and economic theory are often books and articles about models, many of which are highly idealized and chosen for their explanatory power and analytical convenience rather than for their fit with known data sets. Philosophers of science have recognized these facts and have developed literatures about the nature of models, modeling, idealization, as well as testing of models and explanation by models, for both biology and economics. The impetus for this special issue came from our recognition that there is remarkably little overlap between the “modeling in biology” and “modeling in economics” literatures, despite many of the same themes appearing in these literatures.

For the last three decades, the discussion on Hilary Putnam’s provocative suggestions around the issue of realism has raged widely. Putnam’s various formulations of, and arguments for, what he called internal realism in contrast to what he called metaphysical realism have been scrutinised from a variety of perspectives. One angle of attack has been missing, though: the view from the social sciences and the ontology of society. This perspective, I believe, will provide further confirmation to the observation that Putnam’s two concepts of realism are all too aggregative in that they conflate elements that had better be kept distinct, at least for many important purposes (e.g. Niiniluoto 1996). The present essay can be read as an argument for a topic-specific examination of realism. This means that it challenges the overall validity of Richard Boyd’s arguments against what he calls “realism about”, that is, against “a certain fragmented conception of scientific realism, one according to which realism is deeply topic specific” (Boyd 1990, p. 175). Boyd takes the ‘x’ in realism about x” to designate two kinds of things: entities postulated in scientific theories (“realism about the ether” and “realism about higher taxa”) and scientific disciplines (“realism about physics” and “realism about biology”) (ibid., pp. 175, 190). He also suggests that “it seems possible cogently to accept realism about the natural sciences while denying it about at least some of the social sciences” (ibid., p. 191). In Boyd’s view, the possibility of realism about social sciences is undermined by their weak instrumental success; it is the instrumental reliability of method that he takes as the basis for a realist account of science. I do not underwrite this connection between realism and instrumental success, thus I am not compelled to reject realism about social sciences on these grounds; and, as we shall see, social sciences have other peculiarities as well (see Mäki 1996). I think we should, at least to some degree, disaggregate and relativize the issue of realism. I do have sympathy with Boyd’s strategic arguments against “realisms about”, but yet I believe realists will be better off by adopting a more concrete and localized approach to the issue (Mäki 2005). Social objects and social sciences deserve a separate treatment. There are two strategies that can be followed in examining a realism about x (type of entity, theory, discipline). One is to first fix the meaning of realism’ and then specify the extension of ‘x’. This is Boyd’s strategy. The other is to fix some part of the extension of ‘x’ and then adjust the meaning of ‘realism’ so as to accommodate whatever peculiarities the x in question may have (and finally to check whether the adjusted meaning of ‘realism’ meets the criteria of a minimal notion of realism; it would be here that we encounter a relatively fixed idea of some minimal realism, or a set of realist intuitions). The latter is my approach here. I begin with the interconnected ideas of “realism about social objects” andrealism about social sciences”. I am not only interested in what comes after ‘about’; I am also interested in what goes before it, namely ‘realism’ itself. Here is one premise of the discussion: the issue of proper forms of realism for dealing with specific problems is an issue to be settled at least partly a posteriori. Here is the problem for which a solution will be sought: what constraints, if any, does what we know about the social sciences and society (as depicted by the social sciences and our commonsense views) impose upon the forms of realism that can justifiably be adopted about them? This paper suggests to offer only some partial insight into this issue. It seeks to do so indirectly by discussing Putnam’s characterizations of internal and metaphysical realism. The focus will be on two aspects of Putnam’s realisms: [1] the role and kinds of independence and dependence (in relation to the human mind and related things); and [2] the possibility of error. It is shown that the nature of social objects has implications concerning the appropriate constraints on [1] and [2], and thereby on the kinds of realism that are available to social scientists.