What assumptions are required in order for workers' wages to be tied closely to productivity, and do these assumptions hold in practice? On the topic of homo economicus , James Buchanan wrote in his contribution to the volume that "the central predictive proposition of economics Previously, Milton Friedman had argued in favor of the stronger definition of homo economicus , in which individuals and firms optimize over their choices.
In his book Essays in Positive Economics , published in , Friedman argued that this assumption could be justified on the basis of its ability to predict economic outcomes. He developed a famous analogy in which an observer is asked to predict the behavior of a billiard player. Although the billiard player does not employ the laws of physics, Friedman argued that the observer can use the laws of physics to predict how the billiard player will line up his shot.
By analogy, Friedman argued that the economist can use mathematical optimization models to predict how consumers and firms will behave.
As of , the profession had largely defaulted to Friedman's view. The main alternative was Herbert Simon's "bounded rationality" or "satisficing," in which economic agents are assumed to stop short of total optimization. Although many economists were intrigued by Simon's ideas, which helped him to win a Nobel Prize in , the overwhelming body of economic research ignored them and continued to assume optimization.
Concerning objectivity, many economists believed in a form of positivism, in which facts could be separated from values. The positivist position is that technical expertise is separate from preferences. The public expresses preferences about outcomes, and the technical expert then prescribes policies to achieve those outcomes.
Buchanan argued firmly against economists interjecting their own policy preferences into their work:. If the economist can learn from his colleagues in the physical sciences Such an attitude is also essential to distinguishing between technical and political disputes in economics. Bronfenbrenner wrote,. Does not the economists' notorious failure to agree suggest or prove the "prescientific" character of economics as such?
I follow my professional bias vested interest? Much of the disagreement is inevitable since it centers around economic values and policy recommendations and involves normative rather than positive economics This is not to deny the existence of disagreements in positive economics, of which there are plenty Yet we have faith that most if not all such positive disagreements will eventually be resolved, as parallel disagreements have been resolved in the natural sciences.
Like many other economists at that time, Buchanan and Bronfenbrenner believed that values and scientific investigation could be separate, and that economists are on firmer ground when they stick with scientific investigation. With regard to testing procedures, there were doubts expressed in by two heterodox thinkers, Emile Grunberg and Kenneth Boulding. Grunberg wrote that, "In fact, the history of the social sciences shows no clearcut case in which a theory has been disconfirmed by contradictory evidence.
He went on to suggest that the reason for this is that social scientists work with open systems, in which the number of factors that could affect an outcome is intractably large. In contrast, physical scientists are able to work with closed systems in which every factor can be accounted for. Boulding wrote,. All predictions, even in the physical sciences, are really conditional predictions.
They say that if the system remains unchanged and the parameters of the system remain unchanged, then such and such will be the state of the system at certain times in the future.
If the system does change, of course the prediction will be falsified, and this is what happens in social systems all the time What this means is that the failure of prediction in social systems does not lead to the improvement of our knowledge of these systems, simply because there is nothing there to know While these comments were prescient, they were ignored at the time they were written.
Instead, economists were confident that their statistical techniques were capable of sifting among hypotheses to find reliable ones. In fact, the mids was when economists were particularly optimistic about econometrics, and especially the technique of multiple regression. Multiple regression was thought to be a way to achieve with non-experimental data the ideal of controlling for extraneous influences. For example, suppose that you want to examine whether private schools outperform public schools, using student test scores as the metric.
However, you know that many factors affect test scores, including each student's ability and family environment. With multiple regression, the investigator introduces variables representing these other factors into the statistical analysis, and in theory this means that those variables are controlled for. Multiple regression requires extensive computation, so it was largely impractical before the advent of computers. By the late s, many universities had mainframe computers that could handle these calculations, and multiple regression was rising in popularity.
Multiple regression and computers were a particular boon to macroeconomists. As of , many economists were very optimistic that large-scale macroeconometric models of the economy would prove useful in prediction and control. In fact, as of , the consensus Keynesian view of macroeconomics was so widely accepted that macroeconomics was not controversial.
In the Krupp volume, the special topic of macroeconomics only came up in one essay, by Fritz Machlup. He wrote,.
Anyone who has done empirical work with national-income statistics or foreign-trade statistics is aware of thousands and thousands of arbitrary decisions that the statisticians had to make in executing the operations dictated or suggested by one of the large variety of definitions accepted for the terms in question.
One cannot expect with any confidence that any of the theories connecting the pure constructs of the relevant aggregative magnitudes will be borne out by an examination of their operational counterparts.
Fourteen years after the Krupp volume, the situation had changed dramatically. In , when The Public Interest put out its special issue on "The Crisis in Economic Theory," the title hardly needed to be justified.
As Daniel Bell put it in his contribution ,. Today, there is general agreement that government economic management and policy is in disarray. Many economists argue that prescriptions derived from previous historical situations no longer apply, but there is little consensus as to new prescriptions. By this time, macroeconomics was the most troubled sub-discipline of economics. Among professional economists as well as laymen, Keynesian economics had been discredited by the Great Stagflation, in which unemployment and inflation both soared to levels far above those seen in the s.
This experience suggested that the Keynesians could neither predict nor control the economy. And yet, in terms of our first methodological question, concerning the role of mathematics, might have been the high point for the belief that insight would come from greater mathematical sophistication. I call the late s, which is when I did my graduate work, the era of "peak math.
In the s, two of the most prestigious journals for a young economist were Econometrica and the Journal of Economic Theory , which published the most mathematically difficult articles.
In the s, the five recipients of the John Bates Clark Medal, a highly prestigious award given to an American economist under 40, collectively had published 25 articles in Econometrica and nine in the Journal of Economic Theory by the year they received the award they published more in those journals subsequently. In the Public Interest volume, two of the premier mathematical economists of the time, Kenneth Arrow and Frank Hahn, both used their essays to provide a perspective on macroeconomics.
They argued that it was possible to reconcile microeconomic reasoning with Keynesian macroeconomic theory. But there was no discussion in the Public Interest volume of the role of math per se.
Since men act variously by habit and custom, irrationally or zealously, by conscious design to change institutions or redesign social arrangements, there is no intrinsic order, there are no "economic Laws" constituting the "structure" of the economy; there are only different patterns of historical behavior.
Thus, economics, and economic theory, cannot be a "closed system. However, within the economics profession, the fashion was quite the opposite. Many economists, represented in the Public Interest volume by Mark Willes, thought that the problem with Keynesian economics was that it did not impute enough rationality to economic man.
Following Robert Lucas, Jr. Models that employed rational expectations also happened to be mathematically difficult; one of Lucas's most important papers appeared in the Journal of Economic Theory in There was considerable distance between the macroeconomic views of Willes and those of Arrow and Hahn, and even more distance from those of Paul Davidson, who represented the "post-Keynesian" further to the left school in the issue.
And yet nowhere in the volume is there a discussion of the issue of bias. Elsewhere, economists were becoming aware of the bias in macroeconomics. Robert Hall coined the term "freshwater economics vs. The two schools of thought had both different beliefs about how the economy works and different ideological predilections.
Freshwater economists believed that attempts to control unemployment and output using monetary and fiscal policy were ineffective, and they also tended to believe in conservative economic policy.
Saltwater economists took the opposite view. However, neither would have admitted that their political inclinations had any effect on their beliefs about the effectiveness of discretionary fiscal and monetary policy.
Regarding the question of testing procedures, the economics profession was roiled in that period by the "Lucas critique" as applied to macroeconometric models. In , Lucas argued that, under rational expectations, a model that had a robust statistical fit with the past could nonetheless break down completely going forward. The Lucas critique grabbed the spotlight in the late s and beyond. However, another critique would prove to have greater significance.
The econometric art as it is practiced at the computer terminal involves fitting many, perhaps thousands, of statistical models. One or several that the researcher finds pleasing are selected for reporting purposes.
This searching for a model is often well intentioned, but there can be no doubt that such a specification search invalidates the traditional theories of inference. When considering, for instance, whether private schools or public schools are more effective, the investigator can choose which factors to control for and how to specify the variables.
In practice, each investigator iterates through many plausible choices before selecting the one to report. The economist behaves like an experimenter who is able to tweak the conditions of the experiment to obtain a desired result. This is not conducive to reliability. All of these were serious challenges.
But in , the most significant by far was the apparent failure of macroeconomics to provide a reliable means of predicting and directing the behavior of the economy. This was the essence of the crisis. As this is being written, a half-century after the Krupp volume, mathematical modeling is still the standard in the major economics journals.
But there is nothing like the same faith in higher mathematics that characterized the "peak math" era of the s. The five Clark medalists from published a total of four papers in Econometrica and none in the Journal of Economic Theory.
Economists no longer insist that homo economicus be modeled as rational. Instead, there is a popular field known as behavioral economics, which studies the biases and heuristics that affect individual decision-making and attempts to trace through the economic implications of these deviations from rationality. Economists continue to preach the positivist ideal of scientific objectivity, without questioning whether it is achievable.
However, the problems of bias are occasionally aired. Rather, Romer complained that some economists are producing biased theory in mathematical guise. The style that I am calling mathiness lets academic politics masquerade as science. Like mathematical theory, mathiness uses a mixture of words and symbols, but instead of making tight links, it leaves ample room for slippage between statements in natural versus formal language and between statements with theoretical as opposed to empirical content.
Recall from the Krupp volume the phrase "applicability theorem," meaning the manner of connecting the mathematical model to real-world observables. In physics, this process seems to be straightforward. But in economics, there is room for disagreement about the circumstances to which a mathematical model applies. Romer's view is that certain economists, primarily of the freshwater school, are guilty of abusing assumptions about how their equations connect with reality. They make interpretations that suit their political biases, but otherwise their interpretations are not justified.
He singles out Lucas, Prescott and a few others for having tenuous or sloppy links between mathematical elements and the real world. But from what I can see, such tenuous and sloppy links are the rule in macro fields.
There are two problems embedded in these mathiness critiques. One problem, emphasized by both Romer and Smith, is that theorists produce papers with what we might term false applicability theorems.
That is, because the concepts or assumptions clearly do not relate to the real world, they produce insights that have no practical value. The two are intertwined and invariably the latter provides the ultimate mandate for the former - it is in this context that social work involves both care and control. While it has always been concerned to liberate and emancipate those with whom it works, it is also concerned with working on behalf of the state and the wider society to maintain social order.
However, the latter has in more recent years increasingly became its dominating rationale so that the essential ambiguity which lies at its core appeared to become submerged and lost. For as the twentieth century proceeded the growth of modern social work in Britain became increasingly dependent on the development of, what came to be called, the welfare state which became its primary sponsor and which provided its primary rationale and legitimacy. As a result it mediated not only between other diverse state, voluntary and private agencies but also the diverse and overlapping interests and discourses which informed and constituted them.
Thus the essential ambiguities of social work were increasingly modified and became closely associated with the new forms of social regulation associated with the welfare state Garland, The central focus of modern systems of regulation was the classification of the population based on the scientific claims of different experts.
Increasingly, modern societies regulated the population by sanctioning the knowledge claims of the new human sciences, particularly medicine, psychiatry, psychology and social work - the 'psy complex' Ingleby, ; Rose, The 'psy complex' refers to the network of ideas about the nature of human beings, their perfectibility, the reasons for their behaviour and the way they may be classified, selected and controlled.
It aimed to manage and improve individuals by the manipulation of their qualities and attributes and was dependent upon scientific knowledge and professional interventions and expertise. Human qualities were seen as measurable and calculable and thereby could be changed, improved and rehabilitated. The new human sciences had as their central aim the prediction of future behaviour. For social work to operate quietly and in an uncontested way, it required a supportive social mandate together with an internal professional confidence and coherence.
The latter, particularly in the period following the Second World War, was provided, as we have seen, from psycho-dynamic theory, while the professional aspirations veered towards medicine and psychiatry Payne, Similarly, the growth of social work from the late nineteenth century onwards in the United Kingdom ran in parallel with, and was interrelated with, the development of social interventions associated with the establishment of the welfare state in the post-war period - what Rose and Miller refer to as 'welfarism'.
The key innovations of 'welfarism' lay in the attempts to link the fiscal, calculative and bureaucratic capacities of the apparatus of the state to the government of social life. As a political rationality, 'welfarism' was structured by the wish to encourage national growth and well-being through the promotion of social responsibility and the mutuality of social risk, and was premised on notions of social solidarity Donzelot, As Olive Stevenson a; b has indicated, during the post-war period, social work was imbued with a degree of optimism which believed that measured and significant improvements could be made in the lives of children and families via judicious professional interventions.
In the context of the institutional framework of the other universal state welfare services, while social work was constituted as a residual service, it was based on a relatively positive and optimistic view of those it was working with and of what could be achieved. However, just at the point when social work emerged to play an important role in the welfarist project in the late s and early s in Britain, 'welfarism' itself was experiencing considerable strains in both its political rationality and technological utility.
As a consequence, the rationale and activities of social work were particularly vulnerable to criticism and reconstitution as they could be seen to personify all that was problematic with welfarism. The problems encompassed both the economic and social spheres, from the mids onwards. In the economic sphere, they included: a slow-down in economic growth particularly in the UK compared to its western competitors ; increased difficulties in controlling inflation; a gradual increase in unemployment; and a growth in proportional terms of the public sector in comparison to the so-called private productive sectors of society.
In the social sphere they included: the rediscovery of poverty and significant areas of continued and growing social deprivation; the growth of violence in terms of crime, and various forms of social indiscipline; a decline in individual responsibility and attachments to the traditional nuclear family; and a failure of the various 'social sciences' and of the various social experts who operated them, to contribute to social well-being Parton, However, scandals and public inquiries into cases of child abuse have proved 'emblematic' of all that was seen as wrong with social work Parton, ; Parton, and proved crucial in introducing a more legalised, proceduralised form of practice and hence losing many of the key elements of social work in terms of its moral-practical and humanist traditions.
The possibility of supplanting welfarism by a new rationality of government was provided by approaches informed by the New Right, often associated in Britain with Thatcherism Levitas, , which were increasingly dominant from the mids onwards. The central element of both the critique and recommendations for change was that not only the political rationalities but also the technologies of government pursued by 'welfarism' were themselves central to the problems and thus required fundamental change.
Increasingly, it was argued that 'welfarism', in terms of its moralities, explanations, vocabularies and technologies, needed to be rethought, and that this indicated the need for a new form of government. However, it would be simplistic to see the criticisms of social work policy and practice as arising simply from the anti-welfare New Right, for vocal criticisms were also voiced from the left, feminists, anti-racists, various user groups, and other professional and community interests, as well as from within social work itself Clarke, What has happened, however, is that the critiques can be seen to have informed and consolidated a range of new strategies of government which we can term 'advanced liberal' and which includes the following key elements: extending market rationalities - contracts, consumers, competition - to domains where social, bureaucratic or professional logic previously reigned; governing at a distance by formally separating the activities of welfare professionals from the apparatuses of the central and local state and the courts; governing them by new systems of audit, devolved budgets, codes of practice and citizens' charters; and giving individuals new freedoms, by making them responsible for their own present and future welfare and the relations which they have with experts and institutions.
No longer is the emphasis on governing through society - the social - but through the calculating choices of individuals Rose, It thus seems that recent years have witnessed a series of important changes in the nature of social work and in the context in which it operates - though clearly the two are closely interrelated Parton, While in the twenty-five years following the Second World War the development of social work could be characterised as positive and optimistic, since the early s there have been major changes, some of which can be seen as fundamental and dramatic.
With the demise of 'welfarism' social work seems to have not just been subject to criticism but no longer seems to play a central role in contemporary welfare developments. It is as if social work represents all that was wrong with the welfare state - soft, woolly, paternalistic and overly interventive and insensitive at the same time - 'the wimp and the bully' Franklin and Parton, While the election of New Labour has brought in a government with new ideas there seems little doubt that there are some important continuities with the previous Conservative administration, in part arising from repositioning itself with new political constituencies.
It has maximised its political advantage by aligning itself with the aspirations of the upwardly mobile and trading on their insecurities and fears of the socially excluded. The consequence is a politics of enforcement which is promoting policies of 'welfare to work', reducing the level of eligibility for social security benefits, and toughening policies on law and order.
More specifically, New Labour argues that national prosperity is crucially related to the skills of the workforce so that education and training have become the key instruments for its 'social' programme. The principle of reciprocity applies to civic obligations so that rights imply responsibilities and benefits entail contributions. Welfare-to-work measures are thus morally justified because they apply conditions to benefits which are appropriate and welfare-enhancing Driver and Martell, ; Jordan, New Labour is also communitarian and emphasises family values, self-help, voluntary associations and civic responsibility in an 'age of giving'.
It is authoritarian in many of its precepts and sits very uneasily with the pluralism of present day culture seen as so characteristic of late modernity. The drive to modernise, rationalise, managerialise and order seems quite out of step with many of the social, economic and cultural changes of the past twenty years. In this context it seems social work is not given any great prominence - perhaps it is seen as it is too much associated with the negative images of Old Labour and Old Welfare.
Where it does have a place it is, as we have already argued, in providing a proceduralised and legalised service in a bureaucratic way - quite denuded of the face-to-face skills required for negotiating, mediating and so on. In failing to recognise the central ambiguities which lie at the centre of social work and which lie at the core of the tensions to be addressed by the advanced liberal state, there is a failure to develop the major strengths which lie at the heart of social work and which, I would argue, will become increasingly central if social theory itself is going to make a significant contribution to contemporary society.
The predominant response to the range of changes and challenges to social work since the early s has been to construct ever more sophisticated systems of accountability and thereby attempt to rationalise and scientise increasing areas of social work activity via the introduction of ever more complex procedures and systems of audit - whereby it is assumed the world can be ever more subject to prediction and calculation.
As I have argued throughout, however, social work is much better characterised in terms of indeterminacy, uncertainty and ambiguity Parton, b.
The rehabilitation of the idea of uncertainty, and the permission to talk about an indeterminacy which is not amenable to or reducible to authoritative definition or measurement, is an important step, I would suggest, for recognising and beginning to theorise the contemporary complexities of practice.
I would argue that notions of ambiguity, indeterminacy and uncertainty are at the core of social work and should be built upon and not defined out and thereby open up the potential for creativity and novel ways of thinking and acting. As David Howe has argued, 'uncertainty is the domain of the educated professional' , p. Noel Timms suggested in in his discussion of the centrality of language to social work, such an approach not only sees the nature of social work in terms of 'art' as much as 'science', but that more questions are raised than questions answered, and some of the uncertainties exposed are not capable of ready solution.
Timms argued further that 'nor would a ready-made solution necessarily be the most helpful, since a recognition of the uncertainty and its patient exploration is more likely to help us understand the nature of social work' Timms, , p. Similarly, in the area of social theory Steven Seidmann has argued that 'postmodernity may renounce the dream of one reason and one humanity marching forward along one path towards absolute freedom, but it offers its own ideal of a society that tolerates human differences, accepts ambiguity and uncertainty, and values choice, diversity, and democratisation' , p.
In this context we are thus encouraged to think much more creatively and imaginatively about the relationship between theory and practice. Rather than seeing the relationship in terms of the application of theory to practice we are recognising that theory can be generative. Theory can offer new insights and perspectives such that practitioners can think and act differently. Ironically there is nothing as practical as a good theory.
Many years ago Kenneth Burke spoke of critical theory as a civic discourse. Burke never separated action from contemplation, willing from imagining, or poetry from power. Instead he argued that all intellectual activity even the most theoretical sort that disdains politics and practice is itself a kind of practice, first and foremost an act Lentricchia, In doing so, Burke helped recover the classical relationship between theoria and praxis through a realisation of theory's practical power. By concerning itself with the ways we make and change allegiances to key symbols, theory participates in the ongoing moral and practical recreation of individuals and society.
The great strength and distinctiveness about social work is that it has always had the potential and has often explicitly recognised that practice and theory are closely intertwined so that, at a minimum, practice informs the development of theory as much as, if not more than, vice versa and that it tries to give voice to the marginalised and silenced. Einstein liked the five-dimensional approach. In , he wrote to Kaluza, "The idea of achieving unification by means of a five-dimensional cylinder world would never have dawned on me At first glance I like your idea enormously.
Another approach Einstein tried involved extending general relativity to include the equations of electromagnetism by generalizing the metric tensor while keeping the 4-dimensional geometry. Einstein worked on these two basic approaches persistently for the last thirty years of his life, but neither method ever produced the complete unified theory he was looking for.
He pursued and then soon rejected idea after idea. But he never gave up on his quest for a unified theory. Even while lying on his deathbed, he continued his work. The day before he died, he asked to have his latest notes brought to him. Einstein was aware of his position, and commented in that "I must seem like an ostrich who forever buries its head in the relativistic sand in order not to face the evil quanta.
He also became more and more absorbed in formal mathematical arguments, rather than following the physical intuition that had guided him in his youth to his great discoveries. Many people say that Einstein failed because he was simply ahead of his time. Today, many physicists are taking up his quest. The most promising approach appears to be string theory, which requires 10 or more dimensions and describes all elementary particles as vibrating strings, with different modes of vibration producing different particles.
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