ABSTRACT
Tony Lawson’s widely acclaimed book Economics and Reality (1997) provided a systematic ontological critique of mainstream economic analysis. The critique focused upon the inappropriateness of the ‘deductivist method’ of neoclassical economics, which implicitly assumes a closedsystem ontology, and the open-system nature of reality. Deductivism is an approach that invokes covering laws of explanation, whether or not these are derived from formally deductive or inductive premises. This method in turn assumes a closed-system ontology, in which strict regularities of the type ‘if event X, then event Y’ will occur. For Lawson, the emphasis on mathematical modelling and econometric testing are evidence of this closed-system approach. Further, the use of econometric testing, so defined, is an example of empirical realism – reflecting a belief in a flat ontology comprising only observations of events.
