The Microfoundations Delusion
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The Microfoundations Delusion Metaphor and Dogma in the History of Macroeconomics

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.
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Chapter 3: Microfoundations as micro-reduction

J. E. King


JOBNAME: King PAGE: 1 SESS: 7 OUTPUT: Mon Aug 20 14:30:47 2012 3. Microfoundations as micro-reduction 3.1 INTRODUCTION What then, exactly, is meant by the ‘reduction’ of one theory to another? The philosopher of science Kenneth Schaffner offers the following brief, general definition: ‘Intertheoretic explanation, in which one theory is explained by another theory, usually formulated for a different domain, is generally termed theory reduction’ (Schaffner 1967, p. 137; original stress). ‘Hierarchical reduction’ or ‘micro-reduction’, as exemplified by the microfoundations dogma, is a special case of this general principle. The word ‘reduction’, however, turns out to be a rather slippery term, at least in English (it would be instructive to know if similar complications arise in other languages), and in Section 3.2 of this chapter I consider some of the problems that it poses. The remarkably bad metaphors used by Richard Dawkins to justify the reduction of the life sciences to genetics are exposed in Section 3.3, while Section 3.4 outlines some of the objections raised by philosophers of science to the general principle of inter-theoretic reduction. In Section 3.5 I apply these criticisms to the microfoundations dogma in economics. This raises the question of possible macrofoundations for microeconomics, which I discuss – and reject – in Section 3.6. The chapter concludes, in Section 3.7, with some brief reflections on the failure of the micro-reduction project, in economics and in other areas of thought. 3.2 ‘REDUCTION’ AS A METAPHOR The common meaning of ‘reduction’, of course, is...

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