The Concept of Equilibrium in Different Economic Traditions
Show Less

The Concept of Equilibrium in Different Economic Traditions

An Historical Investigation

Bert Tieben

This book deals with one of the most puzzling concepts in economic science, that of economic equilibrium. In modern economics, equilibrium is considered a key assumption, but its role is contested by economists both from within the mainstream and from rival schools of thought.
Buy Book in Print
Show Summary Details

Chapter 3: Methodological Assessment

Bert Tieben

Extract

3. Methodological Assessment INTRODUCTION In a recent paper Roger Backhouse offered what he called a ‘partial’ defense of equilibrium economics (Backhouse 2004). He argues that many discussions about equilibrium theory in economics are misdirected because they focus on the wrong item. It has been said more than once in the previous chapters that equilibrium theory comes in many guises. In that sense, it is inevitable that equilibrium proves a continuous ‘bone of contention’ for economists. According to Backhouse, they should have been wiser. He approaches equilibrium as a method of analysis, which in his view is indispensable, because it allows us to break down complex problems into more manageable pieces. The key word here is abstraction. Any theoretical science abstracts from specific features of reality in order to develop theoretical tools. So, ‘[t]o criticize it [equilibrium analysis, BT] for abstracting from features of reality such as the irreversibility of historical time is to miss the point. Abstraction is necessary. It may, of course, be the case that the abstractions being made are inappropriate, but this needs to be argued for the specific problem being analyzed. There is no argument to be made in principle about the illegitimacy of equilibrium analysis’ (Backhouse 2004, 301). 1 Is it really this simple? Backhouse should know better. Surely, abstraction is part of the scientific process, but by no means the only one. Backhouse himself refers to Robert Lucas’s defense of the equilibrium method and says that we should focus on the substantive points...

You are not authenticated to view the full text of this chapter or article.

Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.

Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.

Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.


Further information

or login to access all content.