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  • Reflection without Rules: Economic Methodology and Contemporary Science Theory
  • Deborah A. Redman
Reflection without Rules: Economic Methodology and Contemporary Science Theory. By D. Wade Hands. Cambridge: Cambridge University Press, 2001. xxv; 480 pp. Cloth $95.00; paper $34.95.

This is a book that cannot be done justice to in the limited space I have been allotted. Unfortunately I am merely able to recount here what the book offers and to note what I consider to be a chief deficiency.

The volume was written for a select group—economists interested in economic methodology and relevant developments in the philosophy of science. According to [End Page 769] the author, the purpose of the work is threefold: to survey modern developments in economic methodology, to survey the contemporary philosophy of science (which Hands prefers to call "science theory") as it relates to economics, and to compel the reader to accept the "new economic methodology" as opposed to the traditional approach to economic methodology. The monograph follows a series of works employing a similar framework but with varying purposes, including Mark Blaug's groundbreaking Methodology of Economics in 1980, Bruce Caldwell's Beyond Positivism two years later, the present reviewer's Economics and the Philosophy of Science in 1991, and Daniel Hausman's Inexact and Separate Science of Economics in 1992. One way Reflection without Rules distinguishes itself from the others is in the wide scope of influences on science that are surveyed, a reflection of the trend in the contemporary history and philosophy of science aimed at broadening its scope to include historical and social considerations.

The work opens with a survey of the literature on traditional methodology, starting with J. S. Mill and including the Millian tradition, Lionel Robbins's Essay on the Nature and Significance of Economic Science, Terence Hutchison's introduction of falsification in The Significance and Basic Postulates of Economic Theory, early Austrian methodology, Milton Friedman's positive economics, and Paul Samuelson's operationalism. In successive chapters, Hands explains the downfall of logical positivism/empiricism and Karl Popper's theory of falsification; naturalism, especially of W. V. Quine; the sociological turn in the philosophy of science through Marxians, the Merton school, and the literature of the sociology of knowledge; and other influences on science, primarily pragmatism, but also postmodernism, the rhetoric of economics, and feminist epistemology. There is a long chapter surveying recent developments in economic methodology: Popper's influence, the tradition of Mill, realism, Alexander Rosenberg's views on economic methodology, German structuralism, and Mary Morgan's response to the latter. Before concluding, Hands explores the philosophy of science and the literature of the sociology of knowledge that employs economic reasoning in investigations of scientific knowledge. The volume closes with a characterization of the "new economic methodology."

As the title of this work, Reflection without Rules, suggests, the new economic methodology embraces the methodological revelation (which is not new) that science cannot be guided by rules. The chief point Hands wants to make is that traditional, rule-driven economic methodology derived from the philosophy of natural science and aimed at prescribing the correct scientific practice for economists has been discredited by philosophers of science and exists no more. The new economic methodology is the "interpenetration of economics and science theory" (7). Some other lessons Hands draws from surveying this vast literature are that the search for rules was a historical aberration; the "received view" has not been replaced; and a broader philosophy of science will influence economics, as a result of which ideas once discredited will find their way back into economics (metaphysics, ethics, pragmatism, and more). With economics no longer getting its cues from philosophers of science, economic methodology has become a field within the discipline of economics and is advanced by economists. With the recognition of the social nature of [End Page 770] scientific activity, economics and the social sciences may no longer be considered epistemologically inferior to the natural sciences.

When Hands details the history of the breakdown in consensus in the philosophy of science since the 1960s, he describes it as a "malaise" which has left the philosophy of science "in disarray on almost every substantive issue" and unable to provide...

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