"Rationalism in Economics," The Public Interest, Special Issue 1980.
IT is widely conceded that something like a “crisis in economic theory” exists, but there is vehement disagreement about the extent and nature of this crisis. The more established and distinguished leaders of the so-called “neo-classical” school—the dominant school for almost half a century now—would assert that the “crisis” is nothing more than the kind of muddle that all scientific disciplines intermittently flounder in, as they try to probe more deeply into the mysteries of natural processes. Other critics assert that all of Keynesian macroeconomics—or even the very idea of macroeconomics itself, in any precise meaning of that term—is now being called seriously into question. Still others insist that we shall get nowhere in our understanding of either macro or microeconomics until we go back to the kind of fundamental conception of economics to be found in the marginalist school (circa 1870-1910), or in the writings of Karl Marx, or Ricardo, or Adam Smith. There are even some (and they are increasingly numerous) who would go further back and re-establish economics as a subordinate branch of political philosophy -though these, being economists by profession, are likely to describe their venture as the latest version of a “new economics.”