Unlike the Scottish enlightenment (David Hume, Adam Ferguson, Adam Smith), the Continental enlightenment, inspired by René Descartes, turned superstition-busting rationalism itself into a superstition, by ignoring the limits of reason and absolutising certain modes of rational analysis.
Our rational faculties have not brought about our rational faculties. Instead they are a tiny part - of restricted relevance and prowess - of a vastly greater order within which they have emerged and continue to be shaped. Reason is only as good as its ability to adapt humbly and with great circumspection to its subordinate role in the overall scheme of things.
The great thinkers of liberty and classical liberalism understood the presence of a greater order and the need to adapt to it. They were the inventors and definers of the true subject matter of the social sciences, the role of self-generating order in human affairs. But their approach has been superseded by the naive rationalism characteristic of the Cartesian legacy.
Unfortunately, economics, one of the academic fields most suitable for demonstrating and understanding self-creating order - order "by human action, but not by human design," in Adam Ferguson's phrase - has been hijacked a long time ago by glass bead game playing nerds and nation building busybodies utterly blind to the genuine, distinctive and rightful task of economics.
I have entered a number of posts fundamentally critical of the prevailing vein in the social sciences and especially economics:
Command Solutions or Acquire a Degree in Mastering Society, The Dismal Social Sciences, and Economics - Rite of Passage ... , and Unecological Ecologists.
In this post, Robert Higgs offers a breathtakingly brilliant criticism of mainstream economics on the occasion of Paul Samuelson's recent death. In a related post, Higgs writes with incredible depth and incisiveness:
Like most graduate students in economics during the last 40 years, I spent many painful hours plowing through Paul Samuelson’s Foundations of Economic Analysis
(Harvard University Press, 1947). From that sacred text we novices
learned how to prove many specific theorems. Far more important, we
learned how neoclassical economics—“modern economic science”—was
supposed to be done.
We built mathematically specified
“models,” sets of equations describing the relations of selected
economic variables. Model in hand, we proved that it had a stable
equilibrium, then characterized the relations of the variables in that
blessed state. Altering the “data” or the “parameters” of the model, we
ascertained how a new equilibrium differed from an initial one. In its
advanced form this protocol rendered most older economists instantly
obsolete, but for young math wizards like Samuelson it opened up the
prospect of “new realms of aesthetic delight.” Eventually most
economists entered those realms. Playing increasingly clever
mathematical tricks with the models constituted “scientific progress.”
Samuelson fashioned his models, which set the standard, after 19th century
physics. Functions were assumed to be smooth and continuous. Economics
was reduced to various types of the same calculus problem: finding a
constrained extremum. The economist’s job was to state the objective
function and the constraints, then grind out the solutions. This
required considerable mathematical ability and stomach for tedium but
little imagination and no familiarity with economic reality.
By
the 1960s, if not earlier, academic economists who quarreled with this
way of doing the job were, as Roy Weintraub put it, “regarded by
mainstream neoclassical economists as defenders of lost causes or as
kooks, misguided critics, and anti-scientific oddballs.” By aping
19th-century physicists, neoclassical economists convinced themselves
and others that they were doing science, but the effort was basically
misguided, not so much scientific as, in F.A. Hayek’s term,
“scientistic.” Human beings, purposeful and creative, are not like
atoms; nor is a market analogous to a physical or chemical system. In
the view of Hayek and his teacher Ludwig von Mises, neoclassical
economics is, in critical respects, pseudo-science.
James Buchanan’s What Should Economists Do?
(Liberty Press, 1979) presents a telling critique of mainstream
economics. “Its flaw lies in its conversion of individual choice
behavior from a social-institutional context to a
physical-computational one,” he writes. Further, the obsession with
equilibrium gives rise to “the most sophisticated fallacy in economic
theory, the notion that because certain relationships hold in
equilibrium the forced interferences designed to implement these
relationships will, in fact, be desirable.” Mainstream economists
cannot move the earth with a mathematical lever, because they have no
place to stand—no “given” information about property rights, consumer
preferences, resource availabilities, and technical possibilities. What
neoclassical economics takes as given is, in reality, revealed only by
competitive processes. “Most modern economists,” Buchanan aptly
concludes, “are simply doing what other economists are doing while
living off a form of dole that will simply not stand critical scrutiny.”
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