Structure in economic theory and structure in real world economic systems

Mackinnon, Lauchlan (2004). Structure in economic theory and structure in real world economic systems.

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Title Structure in economic theory and structure in real world economic systems
Abstract/Summary While mathematical economic theory is replete with structural relationships, it has been suggested (e.g. Jackson 2003) that economists have been far to content with the structure created in their conceptual theoretical worlds, and have done too little to conceptualise or study the structure inherent in actual economic systems. I advance the state of the argument by proposing a typology of theory types - correspondence, instrumental, speculative, and literary - with differing attempts and approaches to building some kind of 'correspondence' between the ontological elements and relationships in the real world and the ontological elements and relationships in the theoretical world. The central argument advanced in the present paper is that the use of mathematics in economics is of a fundamentally different nature than the use of mathematics in, for example, physics. In physics an attempt is made to capture the central and important features of the real world in mathematical equations, and a deeper understanding of the dynamics and relationships in the real world is gained as a consequence. In economics, by contrast, the use of mathematics does little to identify, abstract and capture the structure existing in real world social and economic systems. The use of mathematics may make economic theories very precise, may exclude individuals without extensive training to access economic theories (thus creating barriers between lay people and economic professionals), and may perform a rhetorical service in presenting economic theory as mathematical and, by analogy with physics, scientific. In many cases, however, the net effect of using mathematics in economic theory is the precise opposite of the effect of using mathematics in physics: in physics, mathematics brings us a greater focus on and awareness of structures and relationships in our physical reality, while in economics mathematics takes us away from a focus on and concern with the ontologies and structures in real world economic systems and focuses our attention on abstract, invented theoretical worlds often with unclear relationships to actual economic systems.
Keyword Economic
Social structure
Social science
Physical science
Date 2004-09-01
Research Fields, Courses and Disciplines 340000 Economics
349999 Economics not elsewhere classified
440110 Social Philosophy
349900 Other Economics
340299 Applied Economics not elsewhere classified
370101 Social Theory
370199 Sociology not elsewhere classified
370106 Sociological Methodology and Research Methods
340100 Economic Theory
440199 Philosophy not elsewhere classified
340199 Economic Theory not elsewhere classified
340103 Mathematical Economics
Author Mackinnon, Lauchlan
Open Access Status Other
Additional Notes Draft working paper.

Document type: Generic Document
Collection: School of Historical and Philosophical Inquiry
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Created: Wed, 27 Sep 2006, 10:00:00 EST by Lauchlan Mackinnon on behalf of Scholarly Communication and Digitisation Service