Much as social media companies collect meta-data ‘behind the screens’, academic subjects or disciplines possess an underlying set of instructions or codes for how the discipline operates. As an academic discipline or area of study, economics is guided by meta-data or code that structures the various platforms or specialized areas of study. Such instructions allow economists studying microeconomics to understand macroeconomic theory and environmental economists to recognize methods in urban economics. Instead of calling it meta-data, however, it is identified in the philosophy of science literature as meta-theory or the theory about the theory.

In this chapter, we want to introduce two different sets of meta-theoretical ‘instructions’ (usually called ‘assumptions,’ or ‘commitments’) for executing economics as a scientific area of inquiry. These different sets of meta-theoretical commitments are frequently referred to collectively as paradigms.  From this definitional introduction, a process of compare and contrast highlights how the foundational concepts that formulate a meta-theoretical paradigm are related to one another, how those paradigms guide disciplinary investigations in the natural and social sciences, and how they are related to our study of economics in particular.

This comparison of meta-theoretical foundations is not designed to cover the vast history or represent a comprehensive study of the myriad branches of the philosophy of science. Rather, we drill down and simplify meta-theory to emphasize two contested schools of economic thought. This approach aims to illuminate key attributes of these schools’ embedded meta-theories and how they relate to the natural and social sciences more generally. First, we outline orthodox economics. Orthodox economics is often referred to as mainstream or neoclassical. The definition of orthodox, mainstream, or neoclassical economics applied in this text is the study of the allocation of scarce resources among competing ends. As the name suggests, the orthodox school of thought is widely assumed as the standard approach in economics.

In contrast, heterodox economics challenges the orthodox school by raising questions about the validity of its meta-theory and proposes alternative strategies for defining and studying the economy. We define heterodox economics as the study of the social provisioning process in which an understanding of the development of political economies is rooted in social, political, natural, and cultural processes.

Meta-theory Basics

Before diving any further into this comparison, it will be useful to start with some basic definitions and terms from the philosophy of science. The concepts we use to construct meta-theoretical paradigms for orthodox and heterodox economics are three complicated-sounding words: ontology, epistemology, and axiology. Now, relax and take a deep breath, these terms are really not as complicated as they sound. In the abstract world of philosophy, meta-theoretical paradigms, like meta-data, organize foundations and procedures. Part of what makes these concepts a little intimidating is their abstract nature, so let’s take a brief detour to talk about what it means to be abstract.

To be abstract, by definition, is to be difficult to understand, but if we apply abstraction in useful ways, we can gain knowledge about our physical observable world. For example, modeling might be a familiar form of abstraction. Constructing models of buildings or an automobile is not a specific instance of a home you will live in or a car you will drive, but they do provide a tool for examining how they will look and possibly operate if constructed in life-size. Other helpful forms of abstraction are analogies and metaphors. This chapter began with an analogy. Code and the underlying structure of software operations served as an analogy to help frame our thinking about meta-theory. Metaphors and analogies facilitate the description of topics or sensory experiences when we cannot readily find the words we need for such a description.

Let’s work through a couple of examples to help clarify.  Many of you have probably heard a sports announcer describe a team as having great chemistry. This is an effective metaphor because it gives the viewer a sensory frame of reference for understanding how the team’s players are coming together in a complex way to generate something that we cannot see, taste, hear, or smell, but are confident that something is in fact occurring. Similarly, we might want to describe the sound of a musician or band we just discovered for a friend, to do so we might say the band sounds like a combination of other musicians that our friend is likely familiar with to convey a sensory understanding of their music. ‘It tastes like chicken’, does not mean that it is chicken, but it provides an abstract space for communicating the taste of new foods.

This book is going to be filled with many different forms of abstraction. Mathematical models and index numbers are commonly used in economics, but we will also supply plenty of analogies and metaphors to help you feel comfortable waxing philosophical. All of this is designed to give you greater intellectual freedom to explore complex ideas and narratives about how our world and our economy work or conversely, do not work. As a critical student of meta-theory and the philosophy of science, you will be equipped with tools to help you identify problems and unpack them from empirical evidence and observation down to their meta-theoretical underpinnings. The ability to understand problems and issues from the clouds of abstraction and theory to the level of material observation and practice will enhance your ability to theorize and hypothesize methods for solving problems and fruitfully engage in the discourse of economics and science more broadly.

To begin this journey, we need to ask three principal questions. What is real, or what things ‘really exist’? How do we gain meaningful knowledge about these things? And what makes us value some of these things more than others?  Together, the answers to these three questions comprise our meta-theoretical foundations or paradigms.

Now that our detour into abstraction is complete, we can now turn to provide definitions for those complicated-sounding words. Ontology is simply our theory of reality, or existence. Put another way, it asks and attempts to systematically answer the question, “What does it mean to say (or claim) that something ‘exists’? Epistemology is our theory of knowledge or truth. The study of epistemology is an effort to systematically answer the question, “What does it mean to claim that we “know” something? How can such claims be justified? Axiology is the investigation into, or the theory of value. We might say that axiology attempts to answer the question of why we think some things are more important, or are of greater interest (i.e., ‘value’) to us than other things.

In the history of Western civilization, prior to the advent of science and modernity, the answers to these questions lay principally in the domain of the institutions of Judeo-Christianity.  With the development and successes of science as a method of investigation, these questions and their answers have increasingly become the province of science and the philosophy of science.

While it might seem strange to argue that there is more than one theory of reality, we will see that a commitment to a specific conceptualization of reality directly informs how we approach studying that reality and consequently how we discuss value. Therefore, as we define and construct our meta-theoretical foundations for orthodox and heterodox economics, the corresponding relationships between reality, knowledge, and value will help us to understand why economics is a contested discipline with two very different definitions.

Exercise and class discussion: What is one thing you know to be unmistakably real? How can you prove to yourself and others that it is real? Does this thing have value? How would you determine or measure such value?

Orthodox economics is historically grounded in what we call the Positivist meta-theoretical paradigm, which claims that investigations into what we think of as social science can (and should) be constructively carried out within the same philosophical paradigm (the Empiricist paradigm) as the natural sciences.  Coinage of the term Positivism and its articulation was pioneered by Auguste Comte during the Enlightenment period of the early nineteenth century.

The German sociologist Max Weber challenged the Positivist view of the social sciences, giving rise over time to a competing interpretive, or ‘postmodern’ hermeneutic paradigm, which in turn introduces what we could call the problem of relativism.  As a result, the interpretive, or hermeneutic, paradigm is sometimes referred to as a relativistic paradigm or just Relativism, for short.

Efforts by social philosophers and theorists to address the inherent flaws in both the Empiricist and Positivist paradigms without succumbing at the same time to the problem of relativism have resulted in several iterations of scientific realism, which give rise to what we call a Realist paradigm.  For the most part, heterodox economics is grounded in one or another iteration of the Realist paradigm, although there are some smaller heterodox branches that alternatively view themselves as grounded in the hermeneutic, or relativistic approach.  For our purposes here, we will consider heterodox economics to be primarily Realist in its philosophical foundations, as opposed to orthodox economics, which remains resolutely grounded in nineteenth-century Positivism.

Each of the paradigmatic formulations described above has definitive implications well beyond the field of economics for the conceptual structure and methodology of the scientific investigations they ground.   The detailed consideration of these implications of course lies beyond the scope of this introductory chapter to the field of economics. Instead, going forward, we will be looking at how the key philosophical concepts of ontology, epistemology, and axiology contribute to the competing paradigms in which orthodox and heterodox economics are grounded.

This introduction to the competing paradigms that exist in social theory and philosophy will provide you with the conceptual understanding to dive much more deeply into debates about the nature of science and knowledge, but the focus of this text is how these issues structure economics and its influence on society through policy, culture, and education. However, references for further reading are provided along the way for those who might find themselves interested in that dive into the philosophical depths.

Glossary

meta-theory

theory about theory

paradigm

a set of meta-theoretical commitments or assumptions

ontology

theories of reality, or existence

epistemology

theories of knowledge or truth

axiology

theories of value