First Principles, Fallibilism, and Economics
The Center for the History of Political Economy Working Paper Series, 2017-01
30 Pages Posted: 20 Jan 2017 Last revised: 24 Jan 2017
Date Written: January 1, 2017
The role of first principles in economics is examined through the lens of dominant methodological approaches of the classical and neoclassical periods. First principles are most clearly displayed in pure deductive systems. The tension between first principles as the basis for deductivist approaches to economics and the widespread belief that economics is an empirical discipline. Empirical disciplines require some sort of falsifiability. Fallibilism is the doctrine that no empirical beliefs can be certified as true beyond possibility of doubt. Yet, empirical inquiries also require a starting place. Even rejecting foundationalism, any inquiry starts with indubitable beliefs – that is, beliefs that are not in fact doubted. Anti-foundationalism and fallibilism are in tension, as indubitability appears to have necessary consequences, undercutting fallibilism, while fallibilism threatens confidence in the de facto first principles that begin inquiry. This tension is examined in the different attempts to define economics and its method from John Stuart Mill’s economics as the science of wealth through Lionel Robbins’ and recent neoclassical economists’ economics as the optimal use of scare resources. Commitment to first principles risks emptying economics of its empirical content, while commitment to empirical content entails violating supposed first principles and muddles the boundaries of the discipline. Finally, Stigler and Becker’s “De Gustibus Non Est Disuptandum” is considered as an attempt to square empiricism with Robbins’ deductivism.
Keywords: economics, first principles, fallibilism, foundationalism, empiricism, John Stuart Mill, Lionel Robbins, George Stigler, Gary Becker
JEL Classification: B41, B12, B13, B21, D00, A10
Suggested Citation: Suggested Citation