Seán M. Muller

Whether economics warrants public trust depends on the extent to which assertions by economists can be deemed credible. Three examples from microeconomics are examined to assess how the discipline performs in this regard. First, a purely theoretical argument with broad conceptual implications: a quasi-evolutionary argument for rational choice based on the notion of money pumps. Second, a modelling-related claim with significant social implications: economists’ objection to minimum wages based on a simple supply-demand model. Third, methodological choices with implications for all empirical work in microeconomics: the recent proclamation of a ‘credibility revolution’ in applied microeconomics through the use of experimental and quasi-experimental methods. These are assessed against proposed criteria for credibility: epistemic validity, epistemic reliability, and epistemic reflexivity. On the basis of the performance of the discipline against these criteria on the examples considered, I conclude that public distrust of economics and economists can be well-founded.

The core thesis of this book is that to understand the implications of incentive structures in modern higher education, we require a deeper understanding of associated issues in the philosophy of science. Significant public and philanthropic resources are directed towards various forms of research in the hope of addressing key societal problems. That view, and the associated allocation of resources, relies on the assumption that academic research will tend towards finding truth – or at least selecting the best approximations of it. The present book builds on, and extends, contributions in philosophy and higher education to argue that this assumption is misplaced: with serious implications for modern higher education and its role in informing societal decisions and government policy. The book develops a philosophical foundation for the analysis of the connection between higher education incentives, scientific progress and societal outcomes. That in turn is used to demonstrate how the current approach to incentivising intellectual and scientific progress is likely not only to fail, but in fact to cause harm on the very dimensions it purports to improve. The arguments presented are illustrated with examples from medicine and academic economics, making the book one of the first to examine issues of scientific progress and social consequences across the human and social sciences. In doing so, it develops a novel critique of modern economics that in turn provides a more philosophically substantive foundation for popular critiques of economics than has existed to date.

Reichenbach’s ‘principle of the common cause’ is a foundational assumption of some important recent contributions to quantitative social science methodology but no similar principle appears in econometrics. Angrist et al. has argued that the principle is necessary for instrumental variables methods in econometrics, and Angrist Krueger builds a framework using it that he proposes as a means of resolving an important methodological dispute among econometricians. Through analysis of instrumental variables methods and the issue of multicollinearity, we aim to show that the relationship of the principle to econometric methods is more nuanced than implied by previous work but nevertheless may make a valuable contribution to the coherence and validity of existing methods.

Reluctance to endorse mask wearing to slow transmission of SARS-Cov-2 has been rationalized by the failure of randomized control trials (RCTs) to provide supportive evidence. In contrast, a mechanism-based approach suggests that mask wearing should be expected to reduce transmission: so that contrary evidence from RCTs likely reflects the need to focus policy attention on addressing interacting or mediating factors that offset the basic positive effect. The differing conclusions that result from these two approaches reflect the limitations of RCT-based approaches that are compounded in scenarios, such as pandemics, where urgent decisions are required with limited evidence.

Reichenbach's 'principle of the common cause' is a foundational assumption of some important recent contributions to quantitative social science methodology but no similar principle appears in econometrics. Reiss (2005) has argued that the principle is necessary for instrumental variables methods in econometrics, and Pearl (2009) builds a framework using it that he proposes as a means of resolving an important methodological dispute among econometricians. We aim to show, through analysis of the main problem instrumental variables methods are used to resolve, that the relationship of the principle to econometric methods is more nuanced than implied by previous work, but nevertheless may make a valuable contribution to the coherence and validity of existing methods.