The Microfoundations Delusion

The Microfoundations Delusion

Metaphor and Dogma in the History of Macroeconomics

J. E. King

In this challenging book, John King makes a sustained and comprehensive attack on the dogma that macroeconomic theory must have ‘rigorous microfoundations’. He draws on both the philosophy of science and the history of economic thought to demonstrate the dangers of foundational metaphors and the defects of micro-reduction as a methodological principle. Strong criticism of the microfoundations dogma is documented in great detail, from some mainstream and many heterodox economists and also from economic methodologists, social theorists and evolutionary biologists. The author argues for the relative autonomy of macroeconomics as a distinct ‘special science’, cooperating with but most definitely not reducible to microeconomics.

Chapter 11: Conclusion

J. E. King

Subjects: economics and finance, history of economic thought, post-keynesian economics


11.1 INTRODUCTION I began this book with an account of what would happen if the microfoundations dogma were to prevail: the death of macroeconomics as a separate discipline and its reduction to a mere branch, or application, of neoclassical microeconomics. Then, in Part I, I drew on the literature on metaphors, and on the philosophy of science, to argue that it was unlikely to succeed, not least because it had already failed both in biology and in the other social sciences. In defence of the relative autonomy of macroeconomic theory I set out the two principles of the fallacy of composition and downward causation. The emergent properties of macroeconomic systems, I suggested, made their reduction to microeconomics impossible. In Part II, I mapped the road to microfoundations in economics since 1936, and a very rocky, uneven and circuitous road it proved to be, though it did get there in the end. In the other social sciences the road had the same name but a quite different destination. Finally, in Part III, I looked at the dissenters who refused to take the road to microfoundations. These were mainly heterodox economists, but there were also some prominent mainstream dissidents and a good (but not unanimous) majority of the economic methodologists. In this final chapter I want to consider some of the issues that have arisen, but have not been properly addressed, in Parts I–III. First, in Section 11.2, I ask why the microfoundations dogma emerged when it did, and not before,...

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