The Method in Economics: Can It Generate Myths?

Abstract

Discussions about method are not purely abstract. As the two examples discussed below demonstrate, they correspond to ideological choices that lead to distinct and significant economic policy decisions, depending on the method adopted. One must avoid abstractions or theories assumed to hold true in all times and situations, and instead recognise that economics is a historical science—shaped by historical contingencies and concrete circumstances. Following Popper, any legitimate degree of abstraction must rest on an empirical and historical foundation. Otherwise, myths are constructed, and nothing can be built upon myths.