Economia Politica. Rivista di teoria e analisi Economia Politica. Rivista di teoria e analisi
Non-Technical Abstract
The principle of uniformity, or uniformitarianism, was developed by geologists at the end of the eighteenth century as an alternative to catastrophism. As it emerged, it took on two distinct forms: On the one hand, substantive uniformitarianism was the historically descriptive and empirically testable statement that the rates of change of natural processes are constant through time. On the other, methodological uniformitarianism was the more general assertion that the laws governing natural phenomena are invariant over time and across space. While the former has largely been refuted by the analysis of scientific data, the latter has been absorbed as a fundamental principle underlying all modern science.
DONALD W. KATZNER is Professor of Economics, Department of Economics, University of Massachusetts/Amherst, Amherst, MA 01003, U.S.A
Both forms of the principle of uniformity have appeared in Economics. Substantive uniformitarianism is present in those long-run analyses involving convergence to stationary or steadily growing states, in which constant rates of change (zero or, respectively, positive) are assumed. And methodological uniformitarianism arises in the frequent acceptance of the idea that laws of economic behavior are invariant over time and across space. This paper questions the appropriateness of invoking either form of the principle of uniformity in economic explanation and describes some of the elements of reality that the use of the principle precludes. The crux of the matter is that economists are dealing with sentient beings, not inanimate objects. In particular, because humans are capable of thoughts and feelings, aspects of real behavior are introduced that cannot be captured by approaches that rest on either form of the principle of uniformity. Explanation that relies on any such approach, then, is left wanting.
Methodological uniformitarianism as it relates to the constancy of laws across space is considered first. The argument is illustrated in reference to the well-known assumption of individual decision-making based on utility maximization. It is first suggested that, since, as a practical matter, that assumption can never be falsified by observing real behavior, the justification for making such an assumption has to come from another source. One possibility for Western economies is that utility maximization is acceptable as a guide to action because it is a representation of perhaps the most important cultural motivation in Western society, namely, self interest. But if that is so, then utility maximization would not be an appropriate assumption to use in explaining economic behavior in nonWestern economies where self interest is supplanted by other motivations more central to the cultures in which the economic behavior in question takes place. More generally, since motivations drive all economic behavior for both individuals and firms, and since motivations vary from culture to culture, it is not possible to assume that the laws of economic behavior are invariant across space. Invoking this aspect of methodological uniformitarianism, then, is likely to remove explanations of behavior some distance from reality and, in at least some cases, lead to error.
To argue the inappropriateness of substantive uniformitarianism and of the form of methodological uniformitarianism relating to the constancy of laws through time, a distinction is made between logical time and historical time. Logical time, which may, although it is not necessary to do so, be thought of in reference to philosophical materialism, requires only the sequencing of events in order of their intertemporal occurrence without regard to the manner in which those events are experienced as past events, present events, and future events. Both substantive uniformitarianism and the form of methodological uniformitarianism relating to the constancy of laws through time are linked to logical time. Historical time refers to time as it is actually experienced by individuals. Each moment of history is unique. As historical time passes, human beings change in the knowledge they possess, and in their perceptions of both their external environments and of the possibilities of action taken by others. This means that time reversals such as the restarting of a differential equation from a new initial position (something which is easily accomplished in logical time) are not possible in historical time because the restarting of such a system, say, would imply that the individuals under investigation were able to relive moments of historical time that have already past, without their having undergone any changes as a consequence of the experiences gained during the initial running of the system. Moreover, from an historical time perspective, actual rates of change and the laws of economic behavior are likely to exhibit sufficient variation over time as to render substantive uniformitarianism and the form of methodological uniformitarianism relating to the constancy of laws through time irrelevant in economic analysis.
Thus, invoking substantive uniformitarianism and the form of methodological uniformitarianism relating to the constancy of laws through time precludes the very real and common possibility that experience produces so much change that substantially different models are actually required to explain economic behavior at each moment or instant of time. It also rules out consideration of the following overlapping aspects of reality: First, economic decisions are often made in the midst of such ignorance about the likelihood of possible decision outcomes that the determination of probabilities for use in making those decisions is not possible. Second, this is especially true with respect to future possible outcomes and events that are unknowable because they are of a kind that have never been observed before. And, finally, the evolutionary development of economic history is replete with newness that emerges unpredictably from current happenings and structures. Once again, invoking substantive uniformitarianism and the form of methodological uniformitarianism relating to the constancy of laws through time is likely to remove explanations of economic behavior some distance from reality and possibly lead to error.
In spite of these conclusions, however, it is still possible to construct explanations of economic behavior, to formulate general policy, and to make specific policy decisions and implement them. The paper contains indications to this effect.
dkatzner@econs.umass.edu
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