The Methodology of Macroeconomic Thought: A Conceptual Analysis of Schools in Economics (review)

The Methodology of Macroeconomic Thought: A Conceptual Analysis of Schools in Economics. By Sheila C. Dow. Cheltenham, England: Edward Elgar, 1996. xiv; 225 pp.

Sheila Dow's Methodology of Macroeconomic Thought is a revised, second edition of her Macroeconomic Thought: A Methodological Approach, published in 1985. The greater part of the revision concerns the book's methodological argument and is due to changes in thinking about economic methodology since the first edition. In 1985 economic methodology was only beginning to be investigated by historians of economics. Now most historians have some acquaintance with the main outlines of the literature, and an increasing number now use methodological arguments in their historical analysis. An additional reason for the second edition, Dow states, is that there has been a shift of strategy among economic methodologists. As reflected in the 1994 "Pluralism in Economics" conference on methodology in Bergamo, Italy (which produced Andrea Salanti and Ernesto Screpanti's Pluralism in Economics: New Perspectives in History and Methodology [1997]), methodologists have become increasingly skeptical of prescriptive argument and the search for theory appraisal criteria and more and more tolerant of a range of descriptive strategies.

However, this loosening up process has in Dow's view not only encouraged some to suppose that the new view is that "anything goes," but also to mistakenly attribute this view to her first edition, where she argued against universal appraisal criteria as a manifestation of traditional Cartesian/Euclidean mode of thought and in favor of a nondualist Babylonian mode of thought. Thus an entirely new chapter, "Modes of Thought in Economics," has been added to the book to clear up misconceptions. The chief development in the argument is that focus on these two modes of thought is supplemented with discussion of a third mode of thought, a "dual" of Cartesian/Euclidean thought that is essentially a reaction against it. Babylonian thought (which Dow associates particularly with Brian Loasby) is not inspired by rejection of Cartesian/Euclidean thought, but is rather a more holistic, open systems type of thought that emphasizes uncertainty and often a pragmatic "knowing how" type knowledge.

The second edition is also revised to account for recent developments in economic methodology (in chapter 3) and theoretical developments in economics itself. A respect in which the book is largely unchanged from the first edition, which may raise questions for some, is its classification of schools of thought. The broad divisions are mainstream economics, neo-Austrian economics, post-Keynesianism, and Marxian economics (all surveyed on microfoundations, equilibrium, expectations, money, and policy in chapters 5 through 9; chapter 4 gives a history of the methodological development of schools of thought in macroeconomics). Dow's position is that though there are significant differences within mainstream economics, as a school of thought it is still unified in its attachment to the Cartesian/Euclidean mode of thought. There is certainly considerable truth to this, but at the same time there has been enough change in "mainstream" economics in the last ten years to make some readers wish for more discussion of methodological themes differentiating the mainstream. The same could be said of Marxian economics. But all in all Dow's second edition is a thoughtful effort to encourage historians to turn to the recent history of economics, and to do so through methodological lenses.

John B. Davis
Marquette University

...