Patrick J. O'Sullivan, Economic Methodology and Freedom to Choose, London: Allen & Unwin, 1987, Pp. xvii, 265

Abstract

This book opens with a Forward by Mark Blaug. The book is about "a critical philosophically based approach to the methodology of science guided by the regulative criterion of truth" (p. 3). As a case study, O'SuUivan applies his approach to economics (Chapters 5-11). However, the book is more generally about the "methodology of human science" This review will focus primarily on the case-study. The main idea that O'SuUivan wishes economists to understand is that there is a difference between "objectivist-behaviorist" methodology based on mechanical-causal explanations of human behavior and what he calls the "subjectivist-interpretive" approach with its related teleological mode of explanation. He argues extensively that mainstream economists (i.e. neoclassical economists) are always caught in a contradiction between "precept" and "practice". Specifically, economists think they are engaged in the mechanical-causal mode of explanation that is usually associated with the physical sciences. In practice mainstream economists always rely on some form of the assumption that individual decision makers are optimizing. Not only is this assumption a subjective matter of interpreting the actions of other individuals but it is also teleological (involving the goals of the individual decision maker). O'SuUivan seems to think that these two approaches to methodology and explanation are unambiguously contradictory. He reviews the practice and methodological preaching of Milton Friedman, Paul Samuelson and Richard Lipsey as well as the long-forgotten methodological views of John Stuart Mill, Alfred Marshall and John Maynard Keynes. Everyone of these famous leading economists practice some form of subjectivist-interpretive teleological explanatory methodology while advocating an objectivist-behaviorist methodology. The only economists recognized for not being caught in such an alleged contradiction are the Austrians who consistently practice the subjectivist-interpretive approach to economic methodology. By comparing Austrian and mainstream economics from the perspective of the subjectivist-interpretive methodology O'SuUivan is certainly raising an important question for modern historians of economic thought. If both Austrians and mainstream economists practice the subjectivist-interpretive approach to economic methodology, why have Austrian economists had so little impact on mainstream economics? (Hayek is probably an exception but nobody seems to know why.) Unfortunately, O'SuUivan does not provide a clear answer to this question. Nevertheless, the evidence he presents in his case study is worthy of consideration.