Economics

Methodological modernism came to economics very early. By the end of the nineteenth century, attempts were being made to use mathematics, especially differential calculus, in the construction and use of economic theories. There were also attempts to base economic conclusions on firm statistical foundations. However, in both Britain and the United States, such methods coexisted with what Bevir terms “developmental historicism.” British economist Alfred Marshall, whose work towered over Anglo-American economics until the 1920s, attempted to combine formal mathematical theorizing with an evolutionary view of human development. In the United States, developmental historicism, with roots in both the German historical school and Thorstein Veblen, coexisted with attempts to ground economic reasoning in detailed statistical and institutional analysis. The demise of institutionalism and the displacement of Marshallian economics with a more austere form of theoretical reasoning was in part about the displacement of developmental historicism by methodological modernism, a process that was substantially complete by World War II, if not earlier. However, just as important was a debate between those who focused on making economic theory more rigorous and those who believed that economic reasoning needed to be placed on firmer empirical foundations – a debate within methodological modernism. These two approaches coexisted within econometrics, the econometric society comprising both mathematical economic theorists and economists committed to more rigorous analysis of statistical data. As Stapleford (Chapter 3 of this volume) points out, the most prominent critics of econometrics, a term that came increasingly to be used to refer to statistical-empirical work, shared its commitment to epistemic modernism. Econometrics remained only a part of economics. This chapter begins by sketching the history of twentieth-century economics, focusing on the rise of “modeling,” a conception of economics that typifies methodological or epistemic modernism. Though one can find some of the same algebra in, say, the writings of Léon Walras or William Stanley Jevons, writing in the 1870s, and in contemporary textbooks, the former never referred to what they were doing as modeling. The extent to which economics became dominated by the notion of modeling distinguishes the discipline from, for example, political science. Methodological modernism may have displaced developmental historicism in both disciplines, but the modernist impulses in economics have deeper roots.

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