Dr. Judd W. Patton
the 1960 physicist Thomas S. Kuhn brilliantly demonstrated that each and every
science rests on generally unquestioned premises that condition the nature of
human thinking and scientific investigation. Dr. Kuhn called this body of
foundational premises and assumptions a “paradigm.”
essence of Kuhn’s insight is that there are no such things as “brute
facts” – facts apart from a definite paradigm. What is a “fact” and what
is a “non-fact,” or what is a cause or what is an effect, depends on the
specific paradigm one is operating within.
there are many economic schools of thought, each with their own unique paradigm
or worldview. By analogy, each tradition has its own eyeglasses with very
different lenses to view the economic world. The result? There is no agreement
on the “facts” or on the cause and effects relationships. What, of instance,
caused the 1930 Great Depression? Ask five economists and get six different
answers! It’s virtually the same with any economic topic or public policy
real philosophical question is: which economic paradigm can best account or give
meaning to economic phenomena? That is a tough question, especially for students
taking their first college level class in economics. Before we give you some
recommendation is this murky matter, let’s do a fun exercise to make sure you
understand the concept of a paradigm.
are four thumbnail sketches. Click on the first thumbnail. What do you see?
anyone see a cow? See the ears and nose? Once you see it, you always will. But
here’s the point. If your point-of-view were from either side, would you see a
cow, or perhaps something else? What if it was upside down? Right, you would not
see the cow. So your frame of reference is very important. So it’s not
surprising that Keynesian economists, who view the economic realm within the
macroeconomic world of aggregates and total spending, understand the Great
Depression as a time of “too little aggregate demand.” To them more
government spending is appropriate. Microtheorists, on the other hand, looking
for causation based on human action and policy, see the Federal Reserve
falsifying interest rates by increasing the money supply and thereby giving bad
data to entrepreneurs. The early phases of the 1930s reveal the cluster of
entrepreneurial errors and mistakes. Their solution is to let the market purge
itself of these unprofitable investments. Government was the problem, not the
Now, lets look at a
series of thumbnail sketches. These are quite famous. The first two sketches
or pictures will “predispose” you to see the composite picture in one
way or the other. Click on Thumbnail sketch #2. Again, what do you see?
most people see a young-looking woman. Now, skip over the third thumbnail
picture and open Thumbnail #4. What do you see? Answer: most people will see the
young woman. O.K. Now, click on Thumbnail #3. Do you see the older lady? Has a
pretty big nose! Most people don’t have any trouble spotting her. However, if
you now go back and look at the composite picture, Thumbnail #4, which lady do
you see? Some can see both. Usually, depending on which picture you saw first
will determine or predispose you to see the composite in that way.
What is the moral to this exercise? Our paradigm or frame of reference makes
all the difference in the world, so to speak, in how one understands the
world around him or her. Your parents and teachers and friends and the TV
and movie media and experiences etc. have given you a specific background.
Your understanding of the world around is grasped through these
“lenses.” Likewise, academic disciplines often have different
“starting points” (premises or assumptions) from each other. Freudian
psychologists see the world differently from the Behaviorists or other more
person who would take the Bible or Word of God as the foundation for all
knowledge, for example, will certainly see the economic world very
differently most other people. In this latter case this individual would see
and understand that economic failures and problems are rooted in failures to
act in agreement with moral principles. Humanistic sciences (man and his
reasoning as the sole source of knowledge) will never “see” the moral
connection or link between economic events and moral or immoral behavior.
They obviously would never look for it in the first place as their paradigm
excludes it. Thus there can be no agreement on economic causes and effects
until economists can agree on the same paradigm. So expect many different
“opinions” about economic matters!
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