Methodenstreit 2013? Historical Perspective on the Contemporary Debate Over How to Reform Economics

Abstract

The general failure of economists to predict the financial crash of 2008 has given rise to a wide-ranging debate over the need for methodological reform. But has this debate been adequate to the task at hand? We introduce a framework for classifying methodological debates according to their scope. The scope of debate is especially important in a time of economic crisis, when it is unclear what kind of disciplinary reforms are needed. We find that the current debate is confined largely to the methodological level, taking the incumbent ontology and epistemology as given. We contrast the current debate with two other moments of internal questioning in economics—the Methodenstreit of the 1880s and Keynes' innovations of the 1930s. These were more fundamental, ontological debates, and the contrast with the current debate indicates that reform in economics is likely to be minimal and slow in the wake of the crisis.