The Non-neutrality of Formalism

Abstract

In the view of many, perhaps most, economists, to state a theory in terms of a formal model is an unambiguous improvement, rather than, as we see it, a matter of costs and benefits. The benefits (greater rigour, more precision, demonstrable results), are widely understood, while the costs are underexplored. The costs are associated with the way in which formalising an argument can change its meaning, that is, with its non-neutrality. This chapter will focus on the particular costs of formalism, associated with the obstacles formalism poses for translating from (formalist) theory to practical application.

The emphasis of mainstream economics on a methodology of deductivist mathematical formalism has been a powerful force in the development of economics, and it is now a critical factor in determining what appears to be possible for new economic thinking. It is often argued that mathematics simply translates verbal argument into a more precise and rigorous form which aids both understanding and theory development. But the argument developed in this chapter is that the translation is not neutral in that it changes the nature and content of the original verbal theory. Pluralist methodologies drawing on non-classical logic are discussed as an alternative, in which formal mathematics is one among many methods.