Economics as an Imperialist Social Science

Abstract
Economics is far more versatile than its critics believe. It is a method of analysis and not just a field of study. The method is to combine two core assumptions-individual optimization and equilibrium-with various sets of specific assumptions adapted to different fields of application. The method is applicable not only to the market system but also the social and political environment within which this system is embedded. Social and psychological insights can be encapsulated in the specification of interdependent preferences, which hold the key to modelling all kinds of institutional behavior in rational terms.

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