|Learning Objective |
To discuss the concept of the scientific paradigm of economics
According to Wikipedia, the paradigm is a distinct set of concepts; thought patterns, including theories, research methods, postulates, and standards for what constitutes legitimate contributions to a field. Paradigm is a means of looking at something. In such a sense new paradigm means the newest way of realizing something, getting something, and reaching somewhere. Thus, it is a systematic arrangement of something including standard methodologies, ideologies, assumptions, ideas, and models. This article includes a brief discussion of the scientific paradigm of economics.
If we see the historical evolution and development of economics, we get varieties of forms of economics in terms of its definition, its nature as well as its subject matter. Adam Smith had defined economics as the science of wealth, Marshall had defined as the science of material welfare, and Prof. Robbins had defined economics as the science of scarcity and choice. Before Adam Smith, different thinkers and philosophers had also identified economics as part of different social sciences as part of ethics, politics, and logic, and so on. But after the publication of Adam Smith’s epoch-making book ‘An Enquiry into the Nature and Causes of Wealth of Nations’ in 1776 A.D., economics has got a separate identity and has become a separate social science.
The modern history of economics has started in the 20th century. The era of the 20th century in the history of economics is known as the modern period. This is the time in which the study of economics has got a scientific way to define and refine its doctrine and ideas. Famous economists such as Lionel Robbins, John Maynard Keynes, Paul Samuelson, etc. have contributed to shifting the paradigm of economics from the welfare approach to the study of scarcity and choice in more scientific ways. Thus, economics is a dynamic social science, and its definition as well as the methodology of the study has been changing regarding time and era of thoughts of economists.
Looking at the nature of economics, some economists have considered economics as a science and on the other hand, some referred it as an art. Economists had thought of scientific properties of economics believed that economics is a systematized investigation of a subject matter, determines cause and effect relationship and its laws are universal, thus economics is science. It means economics is science in the sense that it has a universal system of knowledge and study. For example, the law of demand that depicts the demand behavior of a consumer concerning price in the market is equally applicable in all the part of the world. Similarly, the theory of consumer behavior or theories related to production, exchange, and distribution are equally and universally applicable in any society of the world. Thus economics has all the attributes that make it science and it is considered as a science.
Following the fact, the paradigm of economics has shifted from the politico-economic paradigm, to the theoretical model and from the theoretical model paradigm to the scientific paradigm. There are so many factors and incidents behind the shifting paradigm of economics including economic crisis and shocks, transitions of economics, new economic policies, and so on. The scientific paradigm of economics takes the study of economics and its doctrines as a science and through scientific methodology. Thus, the scientific paradigm in economics means looking at the methodology of economic study to answer the question like how economic science can be studied through scientific approach and ideas.
The scientific paradigm of economics considers all the theories and doctrines of economics as a science and deals with how theories are formulated and empirically tested. Friedman’s falsifiability criterion is related to the scientific paradigm of economics. This paradigm looks testability as an elementary aspect of the study. Thus assumptions undertaken in economic theories, conclusions, and predictions drawn from them must be empirically tested. However, economics as social science, the assumptions may not be tested empirically so the predictions have drawn is if tested and verified against real-life data then the theory can be considered verified and scientific.
The scientific paradigm always incorporates truth from the facts. It requires all the theories should be based on truth and must draw factual conclusions applicable to the real world. Therefore, the scientific paradigm of economics looks economics and economic theories in scientific ways and analyzes with an empirical approach against real-world data. Economic theories have to go through empiricism, and testability according to the concept of the scientific paradigm.