Conventionalism and Economic Theory

Publisher Website
Google Scholar
Abstract
Roughly speaking all economists can be divided into two groups—those who agree with Milton Friedman and those who do not. Both groups, however, espouse the view that science is a series of approximations to a demonstrated accord with reality. Methodological controversy in economics is now merely a Conventionalist argument over which comes first—simplicity or generality. Furthermore, this controversy in its current form is not compatible with one important new and up and coming economic (welfare) theory called “the theory of the Second Best.” In this paper I offer a Second Best meta-theory that says that (1) any compromise between simplicity and generality must yield a theory which is “third best” by these Conventionalist criteria; and (2) there exists a better way than a compromise.

This publication has 6 references indexed in Scilit: