Tony Lawson's Essays on the nature and state of modern economics. London: Routledge, 2015, 262 pp.

Abstract

Review of Tony Lawson's Essays on the nature and state of economics. London: Routledge, 2015, 262 pp.The book by Tony Lawson entitled Essays on the nature and state of economics comes at a particularly fitting time in the history of the economic academic discipline. After what has been regarded by many as one of its major setbacks-namely the failure to predict the 2008 global financial crisis-economics has been severely shaken, marginally challenged, but ultimately left untouched by the debates on its conditions that have sparked in the last few years. Therefore, Lawson's choice to assemble a number of previously published papers and a new one into this collection constitutes an important and welcome contribution to the methodology and philosophy of economics literature.The point of departure for Lawson's book is the idea that economics lies in a state of intellectual disarray due to the detachment from social reality, its lack of explanatory and predictive successes, and more generally the absence of a sense of direction. The unhealthy state of the discipline, Lawson notes in the introductory chapter, has been recognised by both heterodox and mainstream contributors, but despite this bipartisan acknowledgement, criticisms and discussions have been mostly superficial and unable to steer the course of economics back onto its tracks. Lawson's collection of papers tackles precisely this issue: it is aimed primarily at filling the gaps in our understanding of the contemporary history of economic thought, including the reasons behind its recent failures, and secondly at evaluating possible alternatives to the contemporary mainstream paradigm.As Mark Blaug (cited in Lawson 2015, 174) bluntly and concisely put it in a passage cited multiple times by Lawson, modern economics is sick. According to the author, the causes of economics' bad state should not be located in recent events and theoretical developments. Instead, it emerged decades ago as the culmination of a process that originated in the past century with the growing mathematisation of the discipline. Therefore, we should not give in to the temptation to consider the failure to predict a single episode (i.e., the recent global financial crisis) as the proof that economics is in need for thorough reconsideration. Economic phenomena, and more generally social ones, are indeed characterised by a degree of contingency so high that, according to Lawson, successful event prediction is typically not much more creditable than winning a lottery (p. 3). Had the crisis been predicted through the application of mathematical models, so Lawson's argument runs, it would have meant little more than a stroke of luck, and would not reduce the urgency of a substantial readjustment of the discipline.The argument that we should consider central in Lawson's book is perhaps that the contemporary mainstream project is characterised by a continuing practice of ontological neglect. The latter is a concept previously employed by Lawson (2003; 2007), and further developed in his last effort, based on the idea that the application of mathematical techniques to the study of social phenomena is inappropriate. Given such incompatibility, mainstream economics' persistence in universally applying only formalistic models to the study of all types of phenomena implies that the former neglects the nature of social phenomena themselves (i.e., their ontology). A major part of the book deals with the nature and historical origins of this neglect, the causes of its perpetuation, and its consequences-all of which I will now attempt to summarise.Why does the application of mathematical formalism within economics imply the neglect of social ontology? Why are the two incompatible? Lawson's answer to these questions, which provides an explanation to the fact that economics has continually failed on its own terms (p. 112), rests on the fact that stable correlations between economic variables have not and cannot succeed. …