ABSTRACT
The interaction between theory and observation in economics is not a simple matter and it raises a number of complex issues. First, there is a persistent confusion between the ‘is’ and the ‘ought’ issues in methodology. The work of Kuhn (1970) and Lakatos (1978), which is of fundamental importance for the history and philosophy of science, has led to a persistent conflation of ‘is’ and ‘ought’ questions. The focus here will be on ‘ought’ questions. Second, there is in the literature of economic methodology what might be called an ‘implied scientism’. Sometimes this can involve generalizations about what ‘scientists’ ‘do’ by people who themselves (unlike Kuhn and Lakatos) have neither scientific training nor much acquaintance with the literature on methodology written by scientists. But in any case the question of whether natural science, especially physics, is an appropriate model for economics is not one which should be left to emerge by implication, and the matter will be addressed explicitly below.
