Equilibrium in chemistry and in economics: an interdisciplinary comparison

ABSTRACT – When neoclassical economics was introduced, at the end of the nineteenth century, it was widely saluted as being as sound and objective in its conclusions as the natural sciences. This was on account of its laws being formalised in mathematical terms, in line with what had happened in the natural sciences once Newton?s methodology had replaced Decartes?. The scientific character of neoclassical economics was re-affirmed, with increased vigour, after the so-called „formalistic revolution? of the 1950s and „60s,1 which had the formulation of General Equilibrium Theory as one of its landmarks. Ever since, the recommendations of neoclassical economics have been implemented as scientific and value-free. The use of mathematical formalism, however, is not, in itself, sufficient to affirm the scientific character of a discipline. Other criteria should be satisfied, for instance, that its key-concepts were formulated according to the same methodology and had, therefore, the same epistemological status as those of the natural sciences. The concept of equilibrium is crucial in economics as well as in the natural sciences; this paper discusses how it is treated in the two domains, with explicit reference to chemistry as representative of the situation in the natural sciences. The discussion, based on historical and philosophical arguments, concludes that the concept of equilibrium is deployed in altogether different manners in chemsitry and in economics, and this conclusion weakens the claim that economics is similar to a natural science

Reassessing the paradigm of economics: bringing positive economics back into the normative framework

When President Reagan and Prime Minister Thatcher adopted the neoliberal doctrine as the paradigm of economics, there was no evidence that the move would have been successful, but thirty years on, the recurrent crises that culminated in 2008 suggest a serious mis-match between expectations and outcomes: a re-examination of the paradigm is in order. This book focuses on Milton Friedman’s formulation of the neoliberal doctrine, and analyses two aspects that were essential to turning it into a fully-fledged paradigm: the attribution of scientific status to positive economics, which led to informing public policies on the requirements of the market; and the characterisation of economic freedom as capable of promoting political freedom, which led to identifying free market with democracy. The book exposes Friedman’s methodological argument for attributing positive economics scientific status as a failure, and his characterisation of economic freedom as a delusion; it identifies in the emergence as the mainstream in economics of the neoclassical synthesis, which borrowed from Walras’ the mathematical treatment of equilibrium but not the ethical and social framework in which it was inscribed, a development that facilitated the transition from the Keynesian to the neoliberal paradigm

Introduction: three ways of looking at economic equilibrium

General Equilibrium Theory, which became the dominating paradigm after the Second World War, is founded on the postulated existence, uniqueness, and stability of equilibrium in economic processes. Since then, the concept has come under sustained attack from all points of the heterodox compass, from Austrian economists to Marxists. Partly in response to these pressures, mainstream economics has changed and moved away from the rigid framework of GET. Nonetheless, economists are continually arguing in terms of equilibrium and the existence of a variety of equilibrium concepts continues to stir controversy. The contributions in this book, which include articles from Tony Lawson, Ivor Grattan-Guinness and Roger Backhouse, highlight current notions of equilibrium in economics and provide a guide to understanding the links between economic theory and economic reality

Equilibrium in Chemistry and in Economics: an Interdisciplinary Comparison

ABSTRACT – When neoclassical economics was introduced, at the end of the nineteenth century, it was widely saluted as being as sound and objective in its conclusions as the natural sciences. This was on account of its laws being formalised in mathematical terms, in line with what had happened in the natural sciences once Newton?s methodology had replaced Decartes?. The scientific character of neoclassical economics was re-affirmed, with increased vigour, after the so-called „formalistic revolution? of the 1950s and „60s,1 which had the formulation of General Equilibrium Theory as one of its landmarks. Ever since, the recommendations of neoclassical economics have been implemented as scientific and value-free. The use of mathematical formalism, however, is not, in itself, sufficient to affirm the scientific character of a discipline. Other criteria should be satisfied, for instance, that its key-concepts were formulated according to the same methodology and had, therefore, the same epistemological status as those of the natural sciences. The concept of equilibrium is crucial in economics as well as in the natural sciences; this paper discusses how it is treated in the two domains, with explicit reference to chemistry as representative of the situation in the natural sciences. The discussion, based on historical and philosophical arguments, concludes that the concept of equilibrium is deployed in altogether different manners in chemsitry and in economics, and this conclusion weakens the claim that economics is similar to a natural science

On the interplay between evidence and theory: Dr Hahnemann’s homeopathic medicine

The focus of this paper is the interplay between evidence and theory, which is at the heart of the methodological question. I address it using as a case study the homeopathic medicine discovered/invented by C.S. Hahnemann in the late eighteenth century. After presenting a quick reconstruction of Hahnemann' s life and work as a medical doctor, I turn to the way in which he came to enunciate the two founding principles of homeopathy: the "law of simile" and the "law of dilution." I compare the way in which homeopathy was received and its therapeutic success evaluated up until the mid-to-late 1800s, to the way in which it is currently regarded. I conclude that the shift from a mixture of appreciation and doubt to the outright denial of all evidence in favour of homeopathy is in line with the most striking (though not necessarily the most productive) trend of twentieth century science: one that is heavily biased in favour of theory and against evidence. In the case of homeopathy such a position led to ignoring evidence gathered in diverse fields, mainly immunology and chemical physics, showing respectively that ultra-diluted solutions have biological effects and that the values of their parameters differ from those of water. The advancement of knowledge is more likely to result from a further investigation of this evidence, with the aim of explaining the law of dilution, than it is from insisting that this law is nonsense because an explanation of it is not, at present, available