A Review of Kuhnian and Lakatosian “Explanations” in Economics

I. Introduction

Until the 1970’s the dominant methodological views among the vast majority of
economists were based on the philosophy of logical positivism. In particular, they were
content to follow the so-called hypothetico-deductive model of scientific explanation, which
emerged in the beginning of the century mainly from the work of the Vienna circle (Blaug,
1980, pp.1-4, Caldwell, 1982, pp.11-18). These ideas were brought in economics mainly by
T. Hutchison (1938). A clear indication of the powerful influence of positivism in economics
was the great popularity of the term “positive” among economists which became widely
known mainly from M. Friedman’s (1953) work on economic method. Although Friedman’s
argument was rooted in economics rather than philosophy, it summarized the “mature
positivist“ approach (Backhouse, 1994, p.182 and Caldwell, 1982, p.173). However, in the
last few decades the influence of post-positivist philosophers of science (Popper, Kuhn,
Lakatos, etc) became significant. More specifically, there was an increasing number of
methodological works in economics that were critical of the traditional approach and also
reflected the post-positivist spirit (see Redman, 1993, Dow, 2002).

It can be argued that the work of Popper gave the initial momentum to the gradual
undermining of the positivist approaches (see, e.g. Caldwell, 1982). Thus, in this sense, it
provided the ground for the subsequent growth of the ideas of Kuhn and Lakatos in
economics. (One can note here that it was Latsis’ 1976 book which stimulated further
economists’ interest in post-positivist philosophies of science)*^*. The influence of Popper is
still quite substantial. However, the ideas of Kuhn and Lakatos gave the stimulus for work on
the nature of growth of economic knowledge. In other words, they made economists think

*We are grateful to an anonymous referee for this point.

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