Money, Banks and Finance in Economic Thought

For a Method to the History of Economic Thought

Fontaine Reis de Araujo Patrick, UFRJ

Economics has been, since the last quarter of the last century, dominated by the neoclassical paradigm. A number of theoretical assumptions define the paradigm, but it is also defined by a specific scientific methodology. In order to produce science in economics, researchers should, under the neoclassical hegemony, combine deduction, prediction and falsificationism to produce analysis. This methodological style, brought up by Friedman (1953), however, is not suitable to works on the history of economic thought. A historian of economic ideas is, therefore, amidst the neoclassical paradigm, deprived from a scientific method to give shape to his work. This article is an approach for a method to the history of economic thought. To achieve this goal, this first section presents a critical narrative to the trajectory of method in the history of economic thought. It intends to describe how major controversies evolved and settled throughout the 20th century, further developing the works of McCloskey (1983) and Arida (1996). These authors deny the existence of a universal method in Economics and describe how controversies in economics were dissolved much more through the use of rhetoric, than through scientific evidence obtained in accordance with rigorous methodology. In other words, the first section shows how the emergence of the neoclassical paradigm was not due to the supposed superiority of its scientific method. The second section discusses the nature of economics, stressing its social character, as a science that deals with phenomena that are dependent of human interpretation of reality. Economic facts are not, as in natural sciences, completely exterior to the individual. Economic concepts, therefore, carry a fluidity derived from the complexity of human relations. Besides, as time passes by, society is continuously transformed, affecting economic performance and interactions. If society transforms, social facts are also transformed, and ideas should follow the same trend. Then, in a reality where facts and ideas are moving, the history of economic ideas acquires an element of theoretical construction. In this sense, the description of how facts and ideas connected and evolved in the past could be understood as an ontological effort. Societies transform throughout time, but they also vary with space. Uncountable varieties of economic relations are being processed at all times, each colored by characteristics that are specific to its locus. The last section explore this aspect, and addresses how particularities of different economic systems could impact the formulation of economic ideas. Could those differences constitute distinct descriptions of economic functioning? Different nations behave economically different? Closing remarks are followed, summing up the main conclusions and signaling matters to be further discussed.


Keywords: Method, History of t