The Methodology of Economics: Or, How Economists Explain

Blaug is noted as author of Economic Theory in Retrospect, a brilliant "presentist" reconstruction of past economic thought in terms of modern mathematical models. In the beginning of early editions of that work he included a survey of economics method which is considerably expanded in this book. He surveys the traditional nineteenth century economic methodologists, such as Neville Keynes (J. M. Keynes' father), The scope and method of political economy. by John Neville Keyne John Stuart Mill, A System of Logic, Ratiocinative and Inductive and Cairns The Character and Logical Method of Political Economy. He also gives a general clear and condensed overview of the philosophies of science of Popper Conjectures and Refutations: The Growth of Scientific Knowledge (Routledge Classics), Thomas Kuhn The Structure of Scientific Revolutions, Imre Lakatos Criticism and the Growth of Knowledge: Volume 4: Proceedings of the International Colloquium in the Philosophy of Science, London, 1965, and Paul Feyerabend Against Method (Fourth Edition). In the second half of the book he treats a number of methodological issues concerning specific theories and disputes within economics, including the Friedman-Samuelson debate about "realism of assumptions" vs. instrumentalism. There are a few minor slips, such as his identification of Lakatos' "hard core" with Joseph Schumpeter's "vision." The hard core are the central assumptions of a theory that are not given up in the face of counter-evidence, but are saved by modified auxiliary hypotheses. Schumpeter's "vision" is more the ideological and metaphysical background of a theory, more like Kuhn's paradigm. Rather the "vision" is the background presupposition for Lakatos' "negative heuristic," the injuction not to give up the hard core. Overall Blaug's book is the most valuable survey of economic methodology available. I personally much prefer the first two editions to the most recent edition, as in the latter he gives up much of his position held in the first two editions.

This old and very short book on methodology enables novices to enter a philosophocal debate that is fragmented and decentralised. The book uses simple language and tries to educate not impress. Together with Alan Chalmers Mark Blaug is the best starting point for any student. However, it stops in the 1980s and therefore cuts off the debate at a critical point of time.

It's a great book to introduce undergraduate students on economic method topics. Mark Blaug first provides an overall vision of philosophy of science, then comments the method of the economists of the XIXth and XXth century, and finally in the third part he shows the discussion on certain topics such as theory of the firm, human capital capital firm, etc, excellent to start a course-conclusion paper. It's great!