Wednesday, September 30, 2009

A Michigan job loss tsunami


The whole country knows that unemployment is very high in Michigan, and most people also know that the automotive manufacturing industry has taken a nose dive in the past five years. But the situation is even worse than most people imagine. Bureau of Labor statistics indicate several important facts. In 2000 the total private sector employment in the United States was 110,798,000; by August 2009 this number had dropped to 109,540,000 -- a net loss of 1,258,000 jobs nation-wide. This is a 1.1% drop. In 2000 the number of private sector jobs in Michigan was 3,996,000; this number dropped to 3,213,000 by August 2009 -- a drop of 783,000 jobs (19.6%). This is a shocking number -- one out of five jobs in Michigan has disappeared since 2000.

Other Midwestern manufacturing states also had significant job losses during the period. Ohio lost 9.8% of its 4,840,000 jobs since 2000, and Illinois lost 6.6% of its 5,205,000 jobs since 2000. But Michigan's losses dwarf every other state by a large margin. Among the fifty states and the District of Columbia there were winners and losers; 25 states gained private sector jobs during these years, with Texas the big winner (700,000 new jobs). Altogether 1,952,000 new jobs were created in 25 states and 3,207,000 jobs were lost in 25 states and DC. But consider this: fully 24% of all private sector job losses nation-wide occurred in Michigan during this time period. Think of that: one out of four of all private-sector job losses in the country during these years occurred in one state, Michigan. This could reasonably be called a one-state depression. It is as if a slow-moving Katrina had hit the state, and no one noticed.

So what is needed in order for Michigan to regain its economic wellbeing?

Plainly a 20-30% unemployment rate is unacceptable. So if the state maintains its current population, then the communities, businesses, and government of the state need to stimulate substantial job growth. And we can put some numbers on this obvious truth. If the population remains constant then it would take eight years for the state to recover to the 2000 level if jobs grow at 3% per year. And this would require the creation of about 100,000 new private sector jobs each year.

What would be needed in order to get to 100,000 new jobs per year in Michigan? Here is one pathway: succeed in attracting or creating --
  • two large firms of 5,000 workers,
  • 10 firms of 1000 workers,
  • 50 firms of 500 workers,
  • 400 firms of 100 workers,
  • 1500 small businesses of 10 workers, and
  • 2000 small businesses that expand by three workers.
That gets us to 106,000 new jobs. And it means creating or attracting two large firms, almost 2,000 small and medium businesses, and expanding another 2,000 small businesses. And this needs to happen every year for eight years.

Is this feasible? Is it possible for a state of about 10 million people to create new businesses and jobs on this scale? That is the crucial question for the state of Michigan. And there are many organizations and incubators devoted to this goal in the state of Michigan -- Ann Arbor SPARK, TechTown, Automation Alley, Detroit Renaissance, Michigan Economic Development Corporation, and the Detroit Regional Chamber, to name a few. Further, the universities are doing everything possible to help provide the talented graduates and the new innovations that will be needed for the creation of successful new businesses. But ultimately it is very hard to see how this kind of business creation and job growth can occur year after year.

So Michigan's problem is also a crucial challenge for the nation as a whole. The plain truth is that Michigan has born the largest burden of the decline of manufacturing jobs in the past decade, and the solutions may be beyond the grasp of the state itself. This situation may require intelligent and substantial Federal solutions.

A Michigan job loss tsunami


The whole country knows that unemployment is very high in Michigan, and most people also know that the automotive manufacturing industry has taken a nose dive in the past five years. But the situation is even worse than most people imagine. Bureau of Labor statistics indicate several important facts. In 2000 the total private sector employment in the United States was 110,798,000; by August 2009 this number had dropped to 109,540,000 -- a net loss of 1,258,000 jobs nation-wide. This is a 1.1% drop. In 2000 the number of private sector jobs in Michigan was 3,996,000; this number dropped to 3,213,000 by August 2009 -- a drop of 783,000 jobs (19.6%). This is a shocking number -- one out of five jobs in Michigan has disappeared since 2000.

Other Midwestern manufacturing states also had significant job losses during the period. Ohio lost 9.8% of its 4,840,000 jobs since 2000, and Illinois lost 6.6% of its 5,205,000 jobs since 2000. But Michigan's losses dwarf every other state by a large margin. Among the fifty states and the District of Columbia there were winners and losers; 25 states gained private sector jobs during these years, with Texas the big winner (700,000 new jobs). Altogether 1,952,000 new jobs were created in 25 states and 3,207,000 jobs were lost in 25 states and DC. But consider this: fully 24% of all private sector job losses nation-wide occurred in Michigan during this time period. Think of that: one out of four of all private-sector job losses in the country during these years occurred in one state, Michigan. This could reasonably be called a one-state depression. It is as if a slow-moving Katrina had hit the state, and no one noticed.

So what is needed in order for Michigan to regain its economic wellbeing?

Plainly a 20-30% unemployment rate is unacceptable. So if the state maintains its current population, then the communities, businesses, and government of the state need to stimulate substantial job growth. And we can put some numbers on this obvious truth. If the population remains constant then it would take eight years for the state to recover to the 2000 level if jobs grow at 3% per year. And this would require the creation of about 100,000 new private sector jobs each year.

What would be needed in order to get to 100,000 new jobs per year in Michigan? Here is one pathway: succeed in attracting or creating --
  • two large firms of 5,000 workers,
  • 10 firms of 1000 workers,
  • 50 firms of 500 workers,
  • 400 firms of 100 workers,
  • 1500 small businesses of 10 workers, and
  • 2000 small businesses that expand by three workers.
That gets us to 106,000 new jobs. And it means creating or attracting two large firms, almost 2,000 small and medium businesses, and expanding another 2,000 small businesses. And this needs to happen every year for eight years.

Is this feasible? Is it possible for a state of about 10 million people to create new businesses and jobs on this scale? That is the crucial question for the state of Michigan. And there are many organizations and incubators devoted to this goal in the state of Michigan -- Ann Arbor SPARK, TechTown, Automation Alley, Detroit Renaissance, Michigan Economic Development Corporation, and the Detroit Regional Chamber, to name a few. Further, the universities are doing everything possible to help provide the talented graduates and the new innovations that will be needed for the creation of successful new businesses. But ultimately it is very hard to see how this kind of business creation and job growth can occur year after year.

So Michigan's problem is also a crucial challenge for the nation as a whole. The plain truth is that Michigan has born the largest burden of the decline of manufacturing jobs in the past decade, and the solutions may be beyond the grasp of the state itself. This situation may require intelligent and substantial Federal solutions.

A Michigan job loss tsunami


The whole country knows that unemployment is very high in Michigan, and most people also know that the automotive manufacturing industry has taken a nose dive in the past five years. But the situation is even worse than most people imagine. Bureau of Labor statistics indicate several important facts. In 2000 the total private sector employment in the United States was 110,798,000; by August 2009 this number had dropped to 109,540,000 -- a net loss of 1,258,000 jobs nation-wide. This is a 1.1% drop. In 2000 the number of private sector jobs in Michigan was 3,996,000; this number dropped to 3,213,000 by August 2009 -- a drop of 783,000 jobs (19.6%). This is a shocking number -- one out of five jobs in Michigan has disappeared since 2000.

Other Midwestern manufacturing states also had significant job losses during the period. Ohio lost 9.8% of its 4,840,000 jobs since 2000, and Illinois lost 6.6% of its 5,205,000 jobs since 2000. But Michigan's losses dwarf every other state by a large margin. Among the fifty states and the District of Columbia there were winners and losers; 25 states gained private sector jobs during these years, with Texas the big winner (700,000 new jobs). Altogether 1,952,000 new jobs were created in 25 states and 3,207,000 jobs were lost in 25 states and DC. But consider this: fully 24% of all private sector job losses nation-wide occurred in Michigan during this time period. Think of that: one out of four of all private-sector job losses in the country during these years occurred in one state, Michigan. This could reasonably be called a one-state depression. It is as if a slow-moving Katrina had hit the state, and no one noticed.

So what is needed in order for Michigan to regain its economic wellbeing?

Plainly a 20-30% unemployment rate is unacceptable. So if the state maintains its current population, then the communities, businesses, and government of the state need to stimulate substantial job growth. And we can put some numbers on this obvious truth. If the population remains constant then it would take eight years for the state to recover to the 2000 level if jobs grow at 3% per year. And this would require the creation of about 100,000 new private sector jobs each year.

What would be needed in order to get to 100,000 new jobs per year in Michigan? Here is one pathway: succeed in attracting or creating --
  • two large firms of 5,000 workers,
  • 10 firms of 1000 workers,
  • 50 firms of 500 workers,
  • 400 firms of 100 workers,
  • 1500 small businesses of 10 workers, and
  • 2000 small businesses that expand by three workers.
That gets us to 106,000 new jobs. And it means creating or attracting two large firms, almost 2,000 small and medium businesses, and expanding another 2,000 small businesses. And this needs to happen every year for eight years.

Is this feasible? Is it possible for a state of about 10 million people to create new businesses and jobs on this scale? That is the crucial question for the state of Michigan. And there are many organizations and incubators devoted to this goal in the state of Michigan -- Ann Arbor SPARK, TechTown, Automation Alley, Detroit Renaissance, Michigan Economic Development Corporation, and the Detroit Regional Chamber, to name a few. Further, the universities are doing everything possible to help provide the talented graduates and the new innovations that will be needed for the creation of successful new businesses. But ultimately it is very hard to see how this kind of business creation and job growth can occur year after year.

So Michigan's problem is also a crucial challenge for the nation as a whole. The plain truth is that Michigan has born the largest burden of the decline of manufacturing jobs in the past decade, and the solutions may be beyond the grasp of the state itself. This situation may require intelligent and substantial Federal solutions.

Tuesday, September 29, 2009

Alternative economists


Traditional neoclassical economics has missed the mark quite a bit in the past two years. There is the financial and banking crisis, of course; neoclassical economists haven't exactly succeeded in explaining or "post-dicting" the crisis and recession through which we've traveled over the past year and more. But perhaps more fundamentally, neoclassical economics has failed to provide a basis for understanding the nuance and range of our economic institutions -- nationally or globally. Contemporary academic economics selects a pretty narrow range of questions as being legitimate subjects for economists to study; so topics such as hunger, labor unions, alternative economic institutions, and the history of economic thought generally get fairly short shrift. Don't expect to see the perspectives of Steven Marglin or Samuel Bowles in Economics 101 in most U.S. universities! The profession has a pretty narrow conception of what "economics" is.

And yet, when intelligent citizens think about the key problems of economics in a broader sense -- the problems that we really care about, the problems that will really influence our quality of life -- we certainly think of something broader than the mathematics of supply and demand or the solution of a general equilibrium model. We're ultimately not as interested in the formalisms of market equilibrium as we are in an analysis of the institutions that define the context of economic activity. We want to know more about the ways in which features of economic organization and the basic institutions of our economy influence individual behavior; we are curious about how our institutions create distributive outcomes that fundamentally affect people's lives differently across social groups. We would like to have a clearer understanding of some of the ways that non-economic factors -- race, gender, age, city -- influence people's economic outcomes. We want to know how the institutions and incentives defined by our economic system bring about effects on the natural environment. And we are often curious about how it might be possible to reform our basic economic institutions in ways that are more favorable to human development. In other words, we are often brought to think along the lines of some of the great dissenters in the economics tradition -- Polanyi, Dobb, Marx, Sen, McCloskey, and Dasgupta (An Inquiry into Well-Being and Destitution), for example. (In a very contemporary and topical way, Richard Florida takes on a lot of these issues; see his blog, the Creative Class.)

It is therefore pleasing to find that some publishers like Routledge are bringing out serious academic works in what they refer to as "social economics". The Routledge series, Advances in Social Economics, has a list of titles representing recent work that is rigorous and insightful but that explores other points of the compass within the field of political economy. I certainly hope that university libraries around the world are paying attention to this series; these are titles that can add a lot to the debate.

One book in the series in particular catches my eye. My colleague Bruce Pietrykowski raises an important set of "alternative" economic issues in his recent book, The Political Economy of Consumer Behavior: Contesting Consumption. (Here is a preview of the book from Routledge.) The book is a valuable contribution and very much worth reading.

Pietrykowski has two intertwined goals in the book. First, he wants to provide a broader basis for understanding consumer behavior and psychology than is presupposed by orthodox economists. And second, he wants to help contribute to a broader understanding of the scope, methods, and content of political economy than is provided by mainstream economics departments today.

Here is his preliminary statement of his goal:
I argue that in order to arrive at a more compelling account of consumer behavior we need to transform the discipline of economics by opening up the borders between economics and sociology, geography, feminist social theory, science studies and cultural studies. (2)
The fact of consumption is a crucial economic reality in any economy. How do individuals make choices about what and how to consume? Pietrykowski makes the point that consumption behavior shows enormous heterogeneity across groups defined in terms of ethnicity, gender, region, and time -- a point made here as well (post). So a single abstraction representing the universal consumer won't do the job. The standard economic assumption of the rationally self-interested consumer with consistent and complete preference rankings is seriously inadequate; instead, we need to develop a more nuanced set of views about the psychological and social factors that influence consumer preferences and choices.

So it is important to develop alternative theoretical tools in terms of which to analyze consumer psychology. Here Pietrykowski draws on ideas from Karl Marx (fetishism of commodities), Amartya Sen, and other political economists who have attempted to provide "thick" descriptions of economic behavior. The point here is not that we cannot usefully investigate and theorize about consumer behavior; rather, Pietrykowski is looking for an analytical approach that operates at the "middle range" between complete formal abstraction and the writing of many individual biographies.

Second, Pietrykowski is interested in contributing to a "re-mapping" of the knowledge system of economic thought, by exploring some of the alternative constructions that have been bypassed by the profession since World War II. (These arguments are largely developed in Chapter Two.) Pietrykowski begins with the assumption that the discipline and profession of economics is itself socially constructed and contingent; it took shape in response to a fairly specific set of theoretical and methodological ideas, it was subject to a variety of social and political pressures, and there were viable alternatives at every turn. Here is how he formulates the social construction perspective:
The claim that economic knowledge is socially constructed allows for an understanding of the field as the outcome of interpretation, negotiation and contestation over the constituents of economic knowledge and the legitimacy of particular practices, methods, and techniques of analysis. (19)
Like Marion Fourcade, Pietrykowski argues that there is a great deal of path dependence in the development of economics as a discipline and profession; and there are identifiable turning points where we can judge with confidence that themes that were eliminated at a certain time would have led to a substantially different intellectual system had they persisted. Pietrykowski's analysis of the fifty years of development of professional economics in the first half of the twentieth century is a very nice contribution to a contemporary history of science, and very compatible with Fourcade's important work in Economists and Societies: Discipline and Profession in the United States, Britain, and France, 1890s to 1990s.

The discipline of "home economics" in the 1920s and 1930s is the example that Pietrykowski examines in detail. "This task ... of defining economics as a distinct professional discipline involved both recruitment and exclusion" (28). Here is how Pietrykowski describes home economics:
Departments of home economics were quite diverse in the early twentieth century. Commonly associated with maintaining and preserving the cult of domesticity, home economics programs emerged from multiple sources including progressive political reform of public health, labor conditions, and household management. (35)
And, of course, home economics did not long remain a part of the professional discipline of economics. Pietrykowski looks in detail at the way in which home economics developed as an academic discipline at Cornell University; and he documents some ways in which the discipline of economics was constructed in a gendered way to exclude this way of understanding scientific economics: "The decision was made that women involved in the emerging field of home economics were to be excluded from the AEA.... Economics was to be concerned neither with women's activities in the home nor with women's activities in the workplace" (28-29).

Pietrykowski develops his full analysis of consumption by focusing on three heterodox approaches to understanding consumption: home economics and feminist analysis, psychological and behavioral research on consumer behavior (George Katona), and Fordism and the theory of mass consumption. He also gives some attention to the emerging importance of experimental economics as a tool for better understanding real economic decision-making and behavior (20-25).

After discussing these heterodox theories, Pietrykowski illustrates the value of the broader framework by examining three fascinating cases of consumption: the complex motivations that bring consumers to purchase the Toyota Prius, the motivations behind the Slow Food movement, and the choice that people in some communities have to engage in a system of alternative currency. These are each substantial examples of arenas where consumers are choosing products in ways that make it plain that their choices are influenced by culture, values, and commitments no less than calculations of utilities and preferences.

Between the theories and the cases, Pietrykowski offers a remarkably rich rethinking of how people choose to consume. He makes real sense of the idea that consumption is socially constructed (drawing sometimes on the social construction of technology (SCOT) literature). He demonstrates that models based on the theory of the universal consumer are not likely to fit well with actual economic outcomes. And he makes a strong and persuasive case for the need for academic economics to expand its horizons.

I find it interesting to notice that Pietrykowski's account of the ascendency of neoclassical economics since the 1950s converges closely with prior postings on positivist philosophy of science. One of the explicit appeals made by neoclassical economists was a methodological argument: they argued that their deductive, formal, and axiomatic treatments of economic fundamentals were more "scientific" than case studies and thick descriptions of economic behavior. So many of the failings of mainstream economic thought today can be traced to the shortcomings of the positivist program for the social sciences that was articulated in the middle of the twentieth century.

Alternative economists


Traditional neoclassical economics has missed the mark quite a bit in the past two years. There is the financial and banking crisis, of course; neoclassical economists haven't exactly succeeded in explaining or "post-dicting" the crisis and recession through which we've traveled over the past year and more. But perhaps more fundamentally, neoclassical economics has failed to provide a basis for understanding the nuance and range of our economic institutions -- nationally or globally. Contemporary academic economics selects a pretty narrow range of questions as being legitimate subjects for economists to study; so topics such as hunger, labor unions, alternative economic institutions, and the history of economic thought generally get fairly short shrift. Don't expect to see the perspectives of Steven Marglin or Samuel Bowles in Economics 101 in most U.S. universities! The profession has a pretty narrow conception of what "economics" is.

And yet, when intelligent citizens think about the key problems of economics in a broader sense -- the problems that we really care about, the problems that will really influence our quality of life -- we certainly think of something broader than the mathematics of supply and demand or the solution of a general equilibrium model. We're ultimately not as interested in the formalisms of market equilibrium as we are in an analysis of the institutions that define the context of economic activity. We want to know more about the ways in which features of economic organization and the basic institutions of our economy influence individual behavior; we are curious about how our institutions create distributive outcomes that fundamentally affect people's lives differently across social groups. We would like to have a clearer understanding of some of the ways that non-economic factors -- race, gender, age, city -- influence people's economic outcomes. We want to know how the institutions and incentives defined by our economic system bring about effects on the natural environment. And we are often curious about how it might be possible to reform our basic economic institutions in ways that are more favorable to human development. In other words, we are often brought to think along the lines of some of the great dissenters in the economics tradition -- Polanyi, Dobb, Marx, Sen, McCloskey, and Dasgupta (An Inquiry into Well-Being and Destitution), for example. (In a very contemporary and topical way, Richard Florida takes on a lot of these issues; see his blog, the Creative Class.)

It is therefore pleasing to find that some publishers like Routledge are bringing out serious academic works in what they refer to as "social economics". The Routledge series, Advances in Social Economics, has a list of titles representing recent work that is rigorous and insightful but that explores other points of the compass within the field of political economy. I certainly hope that university libraries around the world are paying attention to this series; these are titles that can add a lot to the debate.

One book in the series in particular catches my eye. My colleague Bruce Pietrykowski raises an important set of "alternative" economic issues in his recent book, The Political Economy of Consumer Behavior: Contesting Consumption. (Here is a preview of the book from Routledge.) The book is a valuable contribution and very much worth reading.

Pietrykowski has two intertwined goals in the book. First, he wants to provide a broader basis for understanding consumer behavior and psychology than is presupposed by orthodox economists. And second, he wants to help contribute to a broader understanding of the scope, methods, and content of political economy than is provided by mainstream economics departments today.

Here is his preliminary statement of his goal:
I argue that in order to arrive at a more compelling account of consumer behavior we need to transform the discipline of economics by opening up the borders between economics and sociology, geography, feminist social theory, science studies and cultural studies. (2)
The fact of consumption is a crucial economic reality in any economy. How do individuals make choices about what and how to consume? Pietrykowski makes the point that consumption behavior shows enormous heterogeneity across groups defined in terms of ethnicity, gender, region, and time -- a point made here as well (post). So a single abstraction representing the universal consumer won't do the job. The standard economic assumption of the rationally self-interested consumer with consistent and complete preference rankings is seriously inadequate; instead, we need to develop a more nuanced set of views about the psychological and social factors that influence consumer preferences and choices.

So it is important to develop alternative theoretical tools in terms of which to analyze consumer psychology. Here Pietrykowski draws on ideas from Karl Marx (fetishism of commodities), Amartya Sen, and other political economists who have attempted to provide "thick" descriptions of economic behavior. The point here is not that we cannot usefully investigate and theorize about consumer behavior; rather, Pietrykowski is looking for an analytical approach that operates at the "middle range" between complete formal abstraction and the writing of many individual biographies.

Second, Pietrykowski is interested in contributing to a "re-mapping" of the knowledge system of economic thought, by exploring some of the alternative constructions that have been bypassed by the profession since World War II. (These arguments are largely developed in Chapter Two.) Pietrykowski begins with the assumption that the discipline and profession of economics is itself socially constructed and contingent; it took shape in response to a fairly specific set of theoretical and methodological ideas, it was subject to a variety of social and political pressures, and there were viable alternatives at every turn. Here is how he formulates the social construction perspective:
The claim that economic knowledge is socially constructed allows for an understanding of the field as the outcome of interpretation, negotiation and contestation over the constituents of economic knowledge and the legitimacy of particular practices, methods, and techniques of analysis. (19)
Like Marion Fourcade, Pietrykowski argues that there is a great deal of path dependence in the development of economics as a discipline and profession; and there are identifiable turning points where we can judge with confidence that themes that were eliminated at a certain time would have led to a substantially different intellectual system had they persisted. Pietrykowski's analysis of the fifty years of development of professional economics in the first half of the twentieth century is a very nice contribution to a contemporary history of science, and very compatible with Fourcade's important work in Economists and Societies: Discipline and Profession in the United States, Britain, and France, 1890s to 1990s.

The discipline of "home economics" in the 1920s and 1930s is the example that Pietrykowski examines in detail. "This task ... of defining economics as a distinct professional discipline involved both recruitment and exclusion" (28). Here is how Pietrykowski describes home economics:
Departments of home economics were quite diverse in the early twentieth century. Commonly associated with maintaining and preserving the cult of domesticity, home economics programs emerged from multiple sources including progressive political reform of public health, labor conditions, and household management. (35)
And, of course, home economics did not long remain a part of the professional discipline of economics. Pietrykowski looks in detail at the way in which home economics developed as an academic discipline at Cornell University; and he documents some ways in which the discipline of economics was constructed in a gendered way to exclude this way of understanding scientific economics: "The decision was made that women involved in the emerging field of home economics were to be excluded from the AEA.... Economics was to be concerned neither with women's activities in the home nor with women's activities in the workplace" (28-29).

Pietrykowski develops his full analysis of consumption by focusing on three heterodox approaches to understanding consumption: home economics and feminist analysis, psychological and behavioral research on consumer behavior (George Katona), and Fordism and the theory of mass consumption. He also gives some attention to the emerging importance of experimental economics as a tool for better understanding real economic decision-making and behavior (20-25).

After discussing these heterodox theories, Pietrykowski illustrates the value of the broader framework by examining three fascinating cases of consumption: the complex motivations that bring consumers to purchase the Toyota Prius, the motivations behind the Slow Food movement, and the choice that people in some communities have to engage in a system of alternative currency. These are each substantial examples of arenas where consumers are choosing products in ways that make it plain that their choices are influenced by culture, values, and commitments no less than calculations of utilities and preferences.

Between the theories and the cases, Pietrykowski offers a remarkably rich rethinking of how people choose to consume. He makes real sense of the idea that consumption is socially constructed (drawing sometimes on the social construction of technology (SCOT) literature). He demonstrates that models based on the theory of the universal consumer are not likely to fit well with actual economic outcomes. And he makes a strong and persuasive case for the need for academic economics to expand its horizons.

I find it interesting to notice that Pietrykowski's account of the ascendency of neoclassical economics since the 1950s converges closely with prior postings on positivist philosophy of science. One of the explicit appeals made by neoclassical economists was a methodological argument: they argued that their deductive, formal, and axiomatic treatments of economic fundamentals were more "scientific" than case studies and thick descriptions of economic behavior. So many of the failings of mainstream economic thought today can be traced to the shortcomings of the positivist program for the social sciences that was articulated in the middle of the twentieth century.

Alternative economists


Traditional neoclassical economics has missed the mark quite a bit in the past two years. There is the financial and banking crisis, of course; neoclassical economists haven't exactly succeeded in explaining or "post-dicting" the crisis and recession through which we've traveled over the past year and more. But perhaps more fundamentally, neoclassical economics has failed to provide a basis for understanding the nuance and range of our economic institutions -- nationally or globally. Contemporary academic economics selects a pretty narrow range of questions as being legitimate subjects for economists to study; so topics such as hunger, labor unions, alternative economic institutions, and the history of economic thought generally get fairly short shrift. Don't expect to see the perspectives of Steven Marglin or Samuel Bowles in Economics 101 in most U.S. universities! The profession has a pretty narrow conception of what "economics" is.

And yet, when intelligent citizens think about the key problems of economics in a broader sense -- the problems that we really care about, the problems that will really influence our quality of life -- we certainly think of something broader than the mathematics of supply and demand or the solution of a general equilibrium model. We're ultimately not as interested in the formalisms of market equilibrium as we are in an analysis of the institutions that define the context of economic activity. We want to know more about the ways in which features of economic organization and the basic institutions of our economy influence individual behavior; we are curious about how our institutions create distributive outcomes that fundamentally affect people's lives differently across social groups. We would like to have a clearer understanding of some of the ways that non-economic factors -- race, gender, age, city -- influence people's economic outcomes. We want to know how the institutions and incentives defined by our economic system bring about effects on the natural environment. And we are often curious about how it might be possible to reform our basic economic institutions in ways that are more favorable to human development. In other words, we are often brought to think along the lines of some of the great dissenters in the economics tradition -- Polanyi, Dobb, Marx, Sen, McCloskey, and Dasgupta (An Inquiry into Well-Being and Destitution), for example. (In a very contemporary and topical way, Richard Florida takes on a lot of these issues; see his blog, the Creative Class.)

It is therefore pleasing to find that some publishers like Routledge are bringing out serious academic works in what they refer to as "social economics". The Routledge series, Advances in Social Economics, has a list of titles representing recent work that is rigorous and insightful but that explores other points of the compass within the field of political economy. I certainly hope that university libraries around the world are paying attention to this series; these are titles that can add a lot to the debate.

One book in the series in particular catches my eye. My colleague Bruce Pietrykowski raises an important set of "alternative" economic issues in his recent book, The Political Economy of Consumer Behavior: Contesting Consumption. (Here is a preview of the book from Routledge.) The book is a valuable contribution and very much worth reading.

Pietrykowski has two intertwined goals in the book. First, he wants to provide a broader basis for understanding consumer behavior and psychology than is presupposed by orthodox economists. And second, he wants to help contribute to a broader understanding of the scope, methods, and content of political economy than is provided by mainstream economics departments today.

Here is his preliminary statement of his goal:
I argue that in order to arrive at a more compelling account of consumer behavior we need to transform the discipline of economics by opening up the borders between economics and sociology, geography, feminist social theory, science studies and cultural studies. (2)
The fact of consumption is a crucial economic reality in any economy. How do individuals make choices about what and how to consume? Pietrykowski makes the point that consumption behavior shows enormous heterogeneity across groups defined in terms of ethnicity, gender, region, and time -- a point made here as well (post). So a single abstraction representing the universal consumer won't do the job. The standard economic assumption of the rationally self-interested consumer with consistent and complete preference rankings is seriously inadequate; instead, we need to develop a more nuanced set of views about the psychological and social factors that influence consumer preferences and choices.

So it is important to develop alternative theoretical tools in terms of which to analyze consumer psychology. Here Pietrykowski draws on ideas from Karl Marx (fetishism of commodities), Amartya Sen, and other political economists who have attempted to provide "thick" descriptions of economic behavior. The point here is not that we cannot usefully investigate and theorize about consumer behavior; rather, Pietrykowski is looking for an analytical approach that operates at the "middle range" between complete formal abstraction and the writing of many individual biographies.

Second, Pietrykowski is interested in contributing to a "re-mapping" of the knowledge system of economic thought, by exploring some of the alternative constructions that have been bypassed by the profession since World War II. (These arguments are largely developed in Chapter Two.) Pietrykowski begins with the assumption that the discipline and profession of economics is itself socially constructed and contingent; it took shape in response to a fairly specific set of theoretical and methodological ideas, it was subject to a variety of social and political pressures, and there were viable alternatives at every turn. Here is how he formulates the social construction perspective:
The claim that economic knowledge is socially constructed allows for an understanding of the field as the outcome of interpretation, negotiation and contestation over the constituents of economic knowledge and the legitimacy of particular practices, methods, and techniques of analysis. (19)
Like Marion Fourcade, Pietrykowski argues that there is a great deal of path dependence in the development of economics as a discipline and profession; and there are identifiable turning points where we can judge with confidence that themes that were eliminated at a certain time would have led to a substantially different intellectual system had they persisted. Pietrykowski's analysis of the fifty years of development of professional economics in the first half of the twentieth century is a very nice contribution to a contemporary history of science, and very compatible with Fourcade's important work in Economists and Societies: Discipline and Profession in the United States, Britain, and France, 1890s to 1990s.

The discipline of "home economics" in the 1920s and 1930s is the example that Pietrykowski examines in detail. "This task ... of defining economics as a distinct professional discipline involved both recruitment and exclusion" (28). Here is how Pietrykowski describes home economics:
Departments of home economics were quite diverse in the early twentieth century. Commonly associated with maintaining and preserving the cult of domesticity, home economics programs emerged from multiple sources including progressive political reform of public health, labor conditions, and household management. (35)
And, of course, home economics did not long remain a part of the professional discipline of economics. Pietrykowski looks in detail at the way in which home economics developed as an academic discipline at Cornell University; and he documents some ways in which the discipline of economics was constructed in a gendered way to exclude this way of understanding scientific economics: "The decision was made that women involved in the emerging field of home economics were to be excluded from the AEA.... Economics was to be concerned neither with women's activities in the home nor with women's activities in the workplace" (28-29).

Pietrykowski develops his full analysis of consumption by focusing on three heterodox approaches to understanding consumption: home economics and feminist analysis, psychological and behavioral research on consumer behavior (George Katona), and Fordism and the theory of mass consumption. He also gives some attention to the emerging importance of experimental economics as a tool for better understanding real economic decision-making and behavior (20-25).

After discussing these heterodox theories, Pietrykowski illustrates the value of the broader framework by examining three fascinating cases of consumption: the complex motivations that bring consumers to purchase the Toyota Prius, the motivations behind the Slow Food movement, and the choice that people in some communities have to engage in a system of alternative currency. These are each substantial examples of arenas where consumers are choosing products in ways that make it plain that their choices are influenced by culture, values, and commitments no less than calculations of utilities and preferences.

Between the theories and the cases, Pietrykowski offers a remarkably rich rethinking of how people choose to consume. He makes real sense of the idea that consumption is socially constructed (drawing sometimes on the social construction of technology (SCOT) literature). He demonstrates that models based on the theory of the universal consumer are not likely to fit well with actual economic outcomes. And he makes a strong and persuasive case for the need for academic economics to expand its horizons.

I find it interesting to notice that Pietrykowski's account of the ascendency of neoclassical economics since the 1950s converges closely with prior postings on positivist philosophy of science. One of the explicit appeals made by neoclassical economists was a methodological argument: they argued that their deductive, formal, and axiomatic treatments of economic fundamentals were more "scientific" than case studies and thick descriptions of economic behavior. So many of the failings of mainstream economic thought today can be traced to the shortcomings of the positivist program for the social sciences that was articulated in the middle of the twentieth century.

Sunday, September 27, 2009

Neo-positivist philosophy of social science


The 1960s witnessed the development of a second generation of analytic philosophy of science inspired broadly by logical positivism and the Vienna Circle (post, post). The "received view" of the 1950s and 1960s, as expressed by philosophers such as Carl Hempel, Ernest Nagel, and Israel Scheffler (and others pictured above), presented a view of scientific knowledge as consisting of theories, general laws, observational predictions, and a logic of confirmation according to which theories are evaluated by their observational consequences (Patrick Suppes, The Structure of Scientific Theories). There was a largely unquestioned assumption that all scientific theories have the same logical structure (the unity of science doctrine; post); so physics, economics, or evolutionary biology could equally be represented as a system of theoretical terms and statements, a set of general laws, and a set of observational or experimental consequences that can be empirically evaluated. Here is an illustration of the idea in the natural sciences; the black line is the theoretical calculation of ferromagnetic properties, and the colored lines are the observed behavior of metals under difference conditions.

This general view of the logic of scientific knowledge was applied to the social sciences by some philosophers of science, and the result was a neo-positivist philosophy of social science. Richard Rudner was an important player in the formation of the received view in the 1960s, and he served as editor-in-chief of the core journal, Philosophy of Science, from 1959 to 1975. (His collected papers are held at Washington University, and the breadth of his correspondence gives some idea of his centrality in discussions of neo-positivist philosophy of science.) His 1966 textbook, Philosophy of social science, represents the high-water mark of neo-positivist philosophy of social science. So let's review the main features of Rudner's representation of social-scientific knowledge. (May Brodbeck's 1968 Readings in the Philosophy of the Social Sciences is a fairly direct complement to Rudner's book, in that it provides a fairly definitive representation of the philosophy of social science in the late 1960s.)

Several core assumptions about the social sciences are advanced in Rudner's book.
  • unity of science and naturalism; all sciences should resemble physics
  • emphasis on the distinction between the context of discovery and context of justification
  • insistence on the symmetry of explanation and prediction
  • insistence on the essential role of lawlike generalizations in explanation
  • fundamental reliance on a strict distinction between observation and theory
  • advancement of "formalizability" as a desirable characteristic of a theory
Here is Rudner's definition of a theory:
A theory is a systematically related set of statements, including some lawlike generalizations, that is empirically testable.... Accordingly, to the extent that a theory has been fully articulated in some formulation, it will achieve an explicit deductive development and interrelationship of the statements it encompasses. (10-11)
This formulation doesn't yet make explicit the notion that "theory" is non-observational, or that theoretical concepts lack direct criteria of application to observational experience. Rather, Rudner emphasizes the characteristic of formalizability and deductive consequences. And this takes him in the direction of non-observational concepts; they are the concepts that are introduced into a scientific system as formal "place-holders" without explicit definition. Instead, their meaning is determined by the deductive consequences that the sentences in which they appear give rise to. The intended analogy here is with the axioms of geometry; the concepts of "point," "line," and "plane" are introduced as primitives without further definition, and their meaning is defined simply by the role they play in the full deductive system of geometry. So, notably, Rudner treats the problem of theory formation in the sciences as entirely analogous to the problem of creating a formal mathematical system -- number theory or topology, for example. All concepts are either primitive -- introduced without definition; or defined -- introduced with strict logical definitions in terms of other concepts that already exist in the theoretical vocabulary. (It is interesting to note that Carl Hempel's contribution to the Vienna Circle International Encyclopedia of Unified Science is on this subject; Fundamentals of Concept Formation in Empirical Science (International Encyclopedia of Unified Science, Vol 2 No 7) .)

Notice how foreign this approach is to actual theoretical work by social scientists. Weber or Durkheim do not attempt to strip away "connotation" or ordinary associations from their theoretical concepts; rather, they make full use of the complexity and open-endedness of concepts like capitalism or solidarity as a way of allowing them to describe and theorize complex social realities. Rudner's approach seems to reflect the program of logical positivism, attempting to utilize the apparatus of formal logic to clarify scientific reasoning. But it misses the mark in application to the actual reasoning of path-breaking social thinkers such as Durkheim, Weber, Tocqueville, or Marx.

Rudner turns to the observation-theoretic distinction in short order. First, he describes observational concepts or predicates in these terms: "One set of primitives should be comprised of observational, or as we shall sometimes say, experimental terms (i.e., that such predicates should refer to observable features of the universe)" (21). And second, he introduces theoretical concepts: "The latter refer to nonobservable or nonmanifest characteristics of nonobservable entities. Thus, theoreticals include terms such as 'electron,' 'superego,' 'institutional inertia,' 'cultural lag,' which do not or are not (when the appropriate theories come to be formulated) likely to apply to observable entities at all" (23).

This is the standard view of the observation-theoretic distinction within the "received view" of neo-positivist philosophy of science. It was recognized that it is not possible to achieve the scientific goals of physics or chemistry if we are restricted to a purely observational vocabulary. We evidently need to refer to hypothetical entities and forces if we are to be able to explain observable phenomena. So hypothetical constructs must be permitted. But their "empirical content" is exhausted by their observational consequences.

Rudner attempts to provide a positivistic interpretation of Weber's concept of ideal types. He writes, "Our concern is with the logical character of idealizations and their methodological uses. In this latter respect, concepts that happen to be idealizations have, as we shall see, no special methodological role--regardless of the heuristic or suggestive value they may have in leading theorists to form hypotheses or frame theories about related phenomena" (56). This is a surprising exercise, since it involves the requirement that the social scientist provide a precise specification of the scope and implications of the term. I've always understood Weber's emphasis to be on the open-endedness of ideal-type concepts; and certainly Weber's use of ideal-type concepts did not remotely resemble the axiomatic, formalistic use that Rudner attributes to scientific concepts generally.

So what is the logic of scientific explanation in the social sciences, according to Rudner? His answer is straight from Hempel's covering law theory:
The formal structure of a scientific explanation of some particular event has three parts: first, a statement E describing the specific event to be explained; second, a set of statements C1 to Cn describing specific relevant circumstances that are antecedent to, or otherwise causally correlated with, the event described by E; third, a set of lawlike statements L1 to Ln, universal generalizations whose import is roughly 'Whenever events of the kind described by C1 through Cn take place, then an event of the kind described by E takes place.' (60)
Perhaps the key philosophical assumption that Rudner defends is the idea that the logic of science is everywhere the same. Concept formation, deduction, confirmation, and explanation all involve the same formalizable operations. A theory should be formalized as a first-order deductive system with primitive terms and defined terms; some of its terms should have criteria of application to observable outcomes; explanation proceeds by deriving a description of the explanandum from the theory; and the theory should be tested by evaluating the truth or falsity of its observational consequences.

In addition to these extended discussions of the putative logic of social-science reasoning, Rudner also addresses the topics of "objectivity" in social-science research and the concepts of functionalism and teleology in the social sciences.

What are the strengths and weaknesses of this approach to the philosophy of the social sciences? The strength of the book is also its debilitating weakness: it is an exceptionally clear exposition and development of the central ideas of logical positivism in application to social-science theorizing. Unfortunately, this approach proves to be singularly unhelpful when it comes to actually understanding and criticizing the social sciences as they actually exist. It has the effect of attempting to force a style and form of reasoning onto social researchers that deforms the ways in which they attempt to theorize and explain the social world.

Key weaknesses include these points.

First, this formulation pays virtually no attention to the actual content and methods of existing social science disciplines. The foundational premise is that all sciences have the same fundamental logic. So it isn't necessary to examine sociology, political science, or economics in detail in order to trace out the particular characteristics of inquiry, explanation, and theory in these disciplines. Either the social-science disciplines conform to the received view, or they do not and for that reason show themselves to be defective as science. So the philosophy of a special science is simply the special case of the more general theory of scientific knowledge represented by the received view. This is a bad way of beginning the philosophical study of any science, whether the social sciences or the biological sciences.

Second, by highlighting the issues that are central to the exposition of the received view -- for example, the observation-theoretic distinction -- the neo-positivist philosopher of social science is drawn away from consideration of other, more substantive problems to which philosophers could make a useful contribution. For example, the assumptions of purposive rationality underlie many explanations in areas of political science and economics; and it turns out to be very productive to examine the intricacies that arise when we try to give a careful explanation of the concept of rationality and to link this assumption to particular areas of social explanation. The intellectual disposition created by the neo-positivist view is to reduce this question to a simple matter of "concept formation." "Rationality" becomes simply another theoretical construct to be introduced into scientific theories. But as Sen, Harsanyi, Margolis, and dozens of other philosophers and social scientists have demonstrated, we need to spend quite a bit of intellectual energy to the task of unpacking the theory of rationality if it is to be of use in the social sciences.

Third, this approach imposes an inappropriate simplification on the social sciences when it comes to empirical evaluation of social-science hypotheses. It presupposes the comprehensive generality of the hypothetico-deductive model of confirmation theory. Once again, the intellectual error derives from the assumption that the logic of scientific reasoning must be the same in every area of science. The social sciences sometimes involve the sorts of theoretical systems that are found in physics; but more commonly a social science analysis is comprised of a number of relatively independent models and mechanisms -- theories of the middle range -- that are amenable to piecemeal evaluation. Social science analyses are not generally not unified theoretical systems along the lines of the theory of thermodynamics or genetics. And there are other ways of providing empirical evaluation and support for these sorts of analyses -- for example, process-tracing, piecemeal empirical evaluation, and applying the logic of comparative causal analysis.

In hindsight, the neo-positivist paradigm for analyzing the social sciences just didn't go very well. It pushed an esoteric theology of logical analysis onto the enterprise of understanding society that really didn't conform very well to the reasoning and explaining that talented sociologists, anthropologists, and political scientists were creating for themselves. And it did not succeed in focusing productive attention by philosophers on the difficult problems of theory construction and explanation that social scientists really confronted.

Neo-positivist philosophy of social science


The 1960s witnessed the development of a second generation of analytic philosophy of science inspired broadly by logical positivism and the Vienna Circle (post, post). The "received view" of the 1950s and 1960s, as expressed by philosophers such as Carl Hempel, Ernest Nagel, and Israel Scheffler (and others pictured above), presented a view of scientific knowledge as consisting of theories, general laws, observational predictions, and a logic of confirmation according to which theories are evaluated by their observational consequences (Patrick Suppes, The Structure of Scientific Theories). There was a largely unquestioned assumption that all scientific theories have the same logical structure (the unity of science doctrine; post); so physics, economics, or evolutionary biology could equally be represented as a system of theoretical terms and statements, a set of general laws, and a set of observational or experimental consequences that can be empirically evaluated. Here is an illustration of the idea in the natural sciences; the black line is the theoretical calculation of ferromagnetic properties, and the colored lines are the observed behavior of metals under difference conditions.

This general view of the logic of scientific knowledge was applied to the social sciences by some philosophers of science, and the result was a neo-positivist philosophy of social science. Richard Rudner was an important player in the formation of the received view in the 1960s, and he served as editor-in-chief of the core journal, Philosophy of Science, from 1959 to 1975. (His collected papers are held at Washington University, and the breadth of his correspondence gives some idea of his centrality in discussions of neo-positivist philosophy of science.) His 1966 textbook, Philosophy of social science, represents the high-water mark of neo-positivist philosophy of social science. So let's review the main features of Rudner's representation of social-scientific knowledge. (May Brodbeck's 1968 Readings in the Philosophy of the Social Sciences is a fairly direct complement to Rudner's book, in that it provides a fairly definitive representation of the philosophy of social science in the late 1960s.)

Several core assumptions about the social sciences are advanced in Rudner's book.
  • unity of science and naturalism; all sciences should resemble physics
  • emphasis on the distinction between the context of discovery and context of justification
  • insistence on the symmetry of explanation and prediction
  • insistence on the essential role of lawlike generalizations in explanation
  • fundamental reliance on a strict distinction between observation and theory
  • advancement of "formalizability" as a desirable characteristic of a theory
Here is Rudner's definition of a theory:
A theory is a systematically related set of statements, including some lawlike generalizations, that is empirically testable.... Accordingly, to the extent that a theory has been fully articulated in some formulation, it will achieve an explicit deductive development and interrelationship of the statements it encompasses. (10-11)
This formulation doesn't yet make explicit the notion that "theory" is non-observational, or that theoretical concepts lack direct criteria of application to observational experience. Rather, Rudner emphasizes the characteristic of formalizability and deductive consequences. And this takes him in the direction of non-observational concepts; they are the concepts that are introduced into a scientific system as formal "place-holders" without explicit definition. Instead, their meaning is determined by the deductive consequences that the sentences in which they appear give rise to. The intended analogy here is with the axioms of geometry; the concepts of "point," "line," and "plane" are introduced as primitives without further definition, and their meaning is defined simply by the role they play in the full deductive system of geometry. So, notably, Rudner treats the problem of theory formation in the sciences as entirely analogous to the problem of creating a formal mathematical system -- number theory or topology, for example. All concepts are either primitive -- introduced without definition; or defined -- introduced with strict logical definitions in terms of other concepts that already exist in the theoretical vocabulary. (It is interesting to note that Carl Hempel's contribution to the Vienna Circle International Encyclopedia of Unified Science is on this subject; Fundamentals of Concept Formation in Empirical Science (International Encyclopedia of Unified Science, Vol 2 No 7) .)

Notice how foreign this approach is to actual theoretical work by social scientists. Weber or Durkheim do not attempt to strip away "connotation" or ordinary associations from their theoretical concepts; rather, they make full use of the complexity and open-endedness of concepts like capitalism or solidarity as a way of allowing them to describe and theorize complex social realities. Rudner's approach seems to reflect the program of logical positivism, attempting to utilize the apparatus of formal logic to clarify scientific reasoning. But it misses the mark in application to the actual reasoning of path-breaking social thinkers such as Durkheim, Weber, Tocqueville, or Marx.

Rudner turns to the observation-theoretic distinction in short order. First, he describes observational concepts or predicates in these terms: "One set of primitives should be comprised of observational, or as we shall sometimes say, experimental terms (i.e., that such predicates should refer to observable features of the universe)" (21). And second, he introduces theoretical concepts: "The latter refer to nonobservable or nonmanifest characteristics of nonobservable entities. Thus, theoreticals include terms such as 'electron,' 'superego,' 'institutional inertia,' 'cultural lag,' which do not or are not (when the appropriate theories come to be formulated) likely to apply to observable entities at all" (23).

This is the standard view of the observation-theoretic distinction within the "received view" of neo-positivist philosophy of science. It was recognized that it is not possible to achieve the scientific goals of physics or chemistry if we are restricted to a purely observational vocabulary. We evidently need to refer to hypothetical entities and forces if we are to be able to explain observable phenomena. So hypothetical constructs must be permitted. But their "empirical content" is exhausted by their observational consequences.

Rudner attempts to provide a positivistic interpretation of Weber's concept of ideal types. He writes, "Our concern is with the logical character of idealizations and their methodological uses. In this latter respect, concepts that happen to be idealizations have, as we shall see, no special methodological role--regardless of the heuristic or suggestive value they may have in leading theorists to form hypotheses or frame theories about related phenomena" (56). This is a surprising exercise, since it involves the requirement that the social scientist provide a precise specification of the scope and implications of the term. I've always understood Weber's emphasis to be on the open-endedness of ideal-type concepts; and certainly Weber's use of ideal-type concepts did not remotely resemble the axiomatic, formalistic use that Rudner attributes to scientific concepts generally.

So what is the logic of scientific explanation in the social sciences, according to Rudner? His answer is straight from Hempel's covering law theory:
The formal structure of a scientific explanation of some particular event has three parts: first, a statement E describing the specific event to be explained; second, a set of statements C1 to Cn describing specific relevant circumstances that are antecedent to, or otherwise causally correlated with, the event described by E; third, a set of lawlike statements L1 to Ln, universal generalizations whose import is roughly 'Whenever events of the kind described by C1 through Cn take place, then an event of the kind described by E takes place.' (60)
Perhaps the key philosophical assumption that Rudner defends is the idea that the logic of science is everywhere the same. Concept formation, deduction, confirmation, and explanation all involve the same formalizable operations. A theory should be formalized as a first-order deductive system with primitive terms and defined terms; some of its terms should have criteria of application to observable outcomes; explanation proceeds by deriving a description of the explanandum from the theory; and the theory should be tested by evaluating the truth or falsity of its observational consequences.

In addition to these extended discussions of the putative logic of social-science reasoning, Rudner also addresses the topics of "objectivity" in social-science research and the concepts of functionalism and teleology in the social sciences.

What are the strengths and weaknesses of this approach to the philosophy of the social sciences? The strength of the book is also its debilitating weakness: it is an exceptionally clear exposition and development of the central ideas of logical positivism in application to social-science theorizing. Unfortunately, this approach proves to be singularly unhelpful when it comes to actually understanding and criticizing the social sciences as they actually exist. It has the effect of attempting to force a style and form of reasoning onto social researchers that deforms the ways in which they attempt to theorize and explain the social world.

Key weaknesses include these points.

First, this formulation pays virtually no attention to the actual content and methods of existing social science disciplines. The foundational premise is that all sciences have the same fundamental logic. So it isn't necessary to examine sociology, political science, or economics in detail in order to trace out the particular characteristics of inquiry, explanation, and theory in these disciplines. Either the social-science disciplines conform to the received view, or they do not and for that reason show themselves to be defective as science. So the philosophy of a special science is simply the special case of the more general theory of scientific knowledge represented by the received view. This is a bad way of beginning the philosophical study of any science, whether the social sciences or the biological sciences.

Second, by highlighting the issues that are central to the exposition of the received view -- for example, the observation-theoretic distinction -- the neo-positivist philosopher of social science is drawn away from consideration of other, more substantive problems to which philosophers could make a useful contribution. For example, the assumptions of purposive rationality underlie many explanations in areas of political science and economics; and it turns out to be very productive to examine the intricacies that arise when we try to give a careful explanation of the concept of rationality and to link this assumption to particular areas of social explanation. The intellectual disposition created by the neo-positivist view is to reduce this question to a simple matter of "concept formation." "Rationality" becomes simply another theoretical construct to be introduced into scientific theories. But as Sen, Harsanyi, Margolis, and dozens of other philosophers and social scientists have demonstrated, we need to spend quite a bit of intellectual energy to the task of unpacking the theory of rationality if it is to be of use in the social sciences.

Third, this approach imposes an inappropriate simplification on the social sciences when it comes to empirical evaluation of social-science hypotheses. It presupposes the comprehensive generality of the hypothetico-deductive model of confirmation theory. Once again, the intellectual error derives from the assumption that the logic of scientific reasoning must be the same in every area of science. The social sciences sometimes involve the sorts of theoretical systems that are found in physics; but more commonly a social science analysis is comprised of a number of relatively independent models and mechanisms -- theories of the middle range -- that are amenable to piecemeal evaluation. Social science analyses are not generally not unified theoretical systems along the lines of the theory of thermodynamics or genetics. And there are other ways of providing empirical evaluation and support for these sorts of analyses -- for example, process-tracing, piecemeal empirical evaluation, and applying the logic of comparative causal analysis.

In hindsight, the neo-positivist paradigm for analyzing the social sciences just didn't go very well. It pushed an esoteric theology of logical analysis onto the enterprise of understanding society that really didn't conform very well to the reasoning and explaining that talented sociologists, anthropologists, and political scientists were creating for themselves. And it did not succeed in focusing productive attention by philosophers on the difficult problems of theory construction and explanation that social scientists really confronted.

Neo-positivist philosophy of social science


The 1960s witnessed the development of a second generation of analytic philosophy of science inspired broadly by logical positivism and the Vienna Circle (post, post). The "received view" of the 1950s and 1960s, as expressed by philosophers such as Carl Hempel, Ernest Nagel, and Israel Scheffler (and others pictured above), presented a view of scientific knowledge as consisting of theories, general laws, observational predictions, and a logic of confirmation according to which theories are evaluated by their observational consequences (Patrick Suppes, The Structure of Scientific Theories). There was a largely unquestioned assumption that all scientific theories have the same logical structure (the unity of science doctrine; post); so physics, economics, or evolutionary biology could equally be represented as a system of theoretical terms and statements, a set of general laws, and a set of observational or experimental consequences that can be empirically evaluated. Here is an illustration of the idea in the natural sciences; the black line is the theoretical calculation of ferromagnetic properties, and the colored lines are the observed behavior of metals under difference conditions.

This general view of the logic of scientific knowledge was applied to the social sciences by some philosophers of science, and the result was a neo-positivist philosophy of social science. Richard Rudner was an important player in the formation of the received view in the 1960s, and he served as editor-in-chief of the core journal, Philosophy of Science, from 1959 to 1975. (His collected papers are held at Washington University, and the breadth of his correspondence gives some idea of his centrality in discussions of neo-positivist philosophy of science.) His 1966 textbook, Philosophy of social science, represents the high-water mark of neo-positivist philosophy of social science. So let's review the main features of Rudner's representation of social-scientific knowledge. (May Brodbeck's 1968 Readings in the Philosophy of the Social Sciences is a fairly direct complement to Rudner's book, in that it provides a fairly definitive representation of the philosophy of social science in the late 1960s.)

Several core assumptions about the social sciences are advanced in Rudner's book.
  • unity of science and naturalism; all sciences should resemble physics
  • emphasis on the distinction between the context of discovery and context of justification
  • insistence on the symmetry of explanation and prediction
  • insistence on the essential role of lawlike generalizations in explanation
  • fundamental reliance on a strict distinction between observation and theory
  • advancement of "formalizability" as a desirable characteristic of a theory
Here is Rudner's definition of a theory:
A theory is a systematically related set of statements, including some lawlike generalizations, that is empirically testable.... Accordingly, to the extent that a theory has been fully articulated in some formulation, it will achieve an explicit deductive development and interrelationship of the statements it encompasses. (10-11)
This formulation doesn't yet make explicit the notion that "theory" is non-observational, or that theoretical concepts lack direct criteria of application to observational experience. Rather, Rudner emphasizes the characteristic of formalizability and deductive consequences. And this takes him in the direction of non-observational concepts; they are the concepts that are introduced into a scientific system as formal "place-holders" without explicit definition. Instead, their meaning is determined by the deductive consequences that the sentences in which they appear give rise to. The intended analogy here is with the axioms of geometry; the concepts of "point," "line," and "plane" are introduced as primitives without further definition, and their meaning is defined simply by the role they play in the full deductive system of geometry. So, notably, Rudner treats the problem of theory formation in the sciences as entirely analogous to the problem of creating a formal mathematical system -- number theory or topology, for example. All concepts are either primitive -- introduced without definition; or defined -- introduced with strict logical definitions in terms of other concepts that already exist in the theoretical vocabulary. (It is interesting to note that Carl Hempel's contribution to the Vienna Circle International Encyclopedia of Unified Science is on this subject; Fundamentals of Concept Formation in Empirical Science (International Encyclopedia of Unified Science, Vol 2 No 7) .)

Notice how foreign this approach is to actual theoretical work by social scientists. Weber or Durkheim do not attempt to strip away "connotation" or ordinary associations from their theoretical concepts; rather, they make full use of the complexity and open-endedness of concepts like capitalism or solidarity as a way of allowing them to describe and theorize complex social realities. Rudner's approach seems to reflect the program of logical positivism, attempting to utilize the apparatus of formal logic to clarify scientific reasoning. But it misses the mark in application to the actual reasoning of path-breaking social thinkers such as Durkheim, Weber, Tocqueville, or Marx.

Rudner turns to the observation-theoretic distinction in short order. First, he describes observational concepts or predicates in these terms: "One set of primitives should be comprised of observational, or as we shall sometimes say, experimental terms (i.e., that such predicates should refer to observable features of the universe)" (21). And second, he introduces theoretical concepts: "The latter refer to nonobservable or nonmanifest characteristics of nonobservable entities. Thus, theoreticals include terms such as 'electron,' 'superego,' 'institutional inertia,' 'cultural lag,' which do not or are not (when the appropriate theories come to be formulated) likely to apply to observable entities at all" (23).

This is the standard view of the observation-theoretic distinction within the "received view" of neo-positivist philosophy of science. It was recognized that it is not possible to achieve the scientific goals of physics or chemistry if we are restricted to a purely observational vocabulary. We evidently need to refer to hypothetical entities and forces if we are to be able to explain observable phenomena. So hypothetical constructs must be permitted. But their "empirical content" is exhausted by their observational consequences.

Rudner attempts to provide a positivistic interpretation of Weber's concept of ideal types. He writes, "Our concern is with the logical character of idealizations and their methodological uses. In this latter respect, concepts that happen to be idealizations have, as we shall see, no special methodological role--regardless of the heuristic or suggestive value they may have in leading theorists to form hypotheses or frame theories about related phenomena" (56). This is a surprising exercise, since it involves the requirement that the social scientist provide a precise specification of the scope and implications of the term. I've always understood Weber's emphasis to be on the open-endedness of ideal-type concepts; and certainly Weber's use of ideal-type concepts did not remotely resemble the axiomatic, formalistic use that Rudner attributes to scientific concepts generally.

So what is the logic of scientific explanation in the social sciences, according to Rudner? His answer is straight from Hempel's covering law theory:
The formal structure of a scientific explanation of some particular event has three parts: first, a statement E describing the specific event to be explained; second, a set of statements C1 to Cn describing specific relevant circumstances that are antecedent to, or otherwise causally correlated with, the event described by E; third, a set of lawlike statements L1 to Ln, universal generalizations whose import is roughly 'Whenever events of the kind described by C1 through Cn take place, then an event of the kind described by E takes place.' (60)
Perhaps the key philosophical assumption that Rudner defends is the idea that the logic of science is everywhere the same. Concept formation, deduction, confirmation, and explanation all involve the same formalizable operations. A theory should be formalized as a first-order deductive system with primitive terms and defined terms; some of its terms should have criteria of application to observable outcomes; explanation proceeds by deriving a description of the explanandum from the theory; and the theory should be tested by evaluating the truth or falsity of its observational consequences.

In addition to these extended discussions of the putative logic of social-science reasoning, Rudner also addresses the topics of "objectivity" in social-science research and the concepts of functionalism and teleology in the social sciences.

What are the strengths and weaknesses of this approach to the philosophy of the social sciences? The strength of the book is also its debilitating weakness: it is an exceptionally clear exposition and development of the central ideas of logical positivism in application to social-science theorizing. Unfortunately, this approach proves to be singularly unhelpful when it comes to actually understanding and criticizing the social sciences as they actually exist. It has the effect of attempting to force a style and form of reasoning onto social researchers that deforms the ways in which they attempt to theorize and explain the social world.

Key weaknesses include these points.

First, this formulation pays virtually no attention to the actual content and methods of existing social science disciplines. The foundational premise is that all sciences have the same fundamental logic. So it isn't necessary to examine sociology, political science, or economics in detail in order to trace out the particular characteristics of inquiry, explanation, and theory in these disciplines. Either the social-science disciplines conform to the received view, or they do not and for that reason show themselves to be defective as science. So the philosophy of a special science is simply the special case of the more general theory of scientific knowledge represented by the received view. This is a bad way of beginning the philosophical study of any science, whether the social sciences or the biological sciences.

Second, by highlighting the issues that are central to the exposition of the received view -- for example, the observation-theoretic distinction -- the neo-positivist philosopher of social science is drawn away from consideration of other, more substantive problems to which philosophers could make a useful contribution. For example, the assumptions of purposive rationality underlie many explanations in areas of political science and economics; and it turns out to be very productive to examine the intricacies that arise when we try to give a careful explanation of the concept of rationality and to link this assumption to particular areas of social explanation. The intellectual disposition created by the neo-positivist view is to reduce this question to a simple matter of "concept formation." "Rationality" becomes simply another theoretical construct to be introduced into scientific theories. But as Sen, Harsanyi, Margolis, and dozens of other philosophers and social scientists have demonstrated, we need to spend quite a bit of intellectual energy to the task of unpacking the theory of rationality if it is to be of use in the social sciences.

Third, this approach imposes an inappropriate simplification on the social sciences when it comes to empirical evaluation of social-science hypotheses. It presupposes the comprehensive generality of the hypothetico-deductive model of confirmation theory. Once again, the intellectual error derives from the assumption that the logic of scientific reasoning must be the same in every area of science. The social sciences sometimes involve the sorts of theoretical systems that are found in physics; but more commonly a social science analysis is comprised of a number of relatively independent models and mechanisms -- theories of the middle range -- that are amenable to piecemeal evaluation. Social science analyses are not generally not unified theoretical systems along the lines of the theory of thermodynamics or genetics. And there are other ways of providing empirical evaluation and support for these sorts of analyses -- for example, process-tracing, piecemeal empirical evaluation, and applying the logic of comparative causal analysis.

In hindsight, the neo-positivist paradigm for analyzing the social sciences just didn't go very well. It pushed an esoteric theology of logical analysis onto the enterprise of understanding society that really didn't conform very well to the reasoning and explaining that talented sociologists, anthropologists, and political scientists were creating for themselves. And it did not succeed in focusing productive attention by philosophers on the difficult problems of theory construction and explanation that social scientists really confronted.