Although there had been challenges to the “abstract” deductive method in the nineteenth century by members of the so-called “historical school,” who defended a view of economics as normative and historically bounded, the first real change in accepted views of theory assessment in economics occurred in the 1930s. In this chapter I shall examine this revolution in the methodological self-conception of the economics profession. In chapters 10 and 11 I shall then explore criticisms and alternatives that derive from the work of Popper and Lakatos. Unlike the previous chapters, this chapter and the next two will be largely critical. They attempt to show what is wrong with the alternatives to the inexact deductive method. The objections to the method a priori are best answered by showing constructively in chapter 12 what role empirical criticism should have in economics.

I argue in this chapter and the next two that both the criticisms and defenses of economics in contemporary methodological writings are misconceived, because both depend on faulty views of the nature of science. These views are either reminiscent of the early logical positivists or of Karl Popper, or they depend on the more sophisticated views of the later logical empiricists. In criticizing the philosophical presuppositions of recent controversies concerning economic theory, I shall also point out the striking methodological schizophrenia that is characteristic of contemporary economics, whereby methodological doctrine and practice regularly contradict one another.