A German economist proposed grounding economics in empirical behavioral sciences rather than abstractions

Evidence

In no other field of knowledge, according to Schmölders, was the gap between theory and practice wider than between economic research and economic policy, since economists had withdrawn into an “ivory tower of mathematical abstractions and hypothetical logicisms.” Economic behavioral research was Schmölders’s attempt to bridge the gap and overcome the predicament. He carefully distinguished his approach from a narrower understanding of traditional behaviorism. Economists should make use of all “anthropological sciences” that offered insights into the motives, incentives, and impetuses of economic activity: “psychology of the conscious and unconscious (including its behavioristic branches), biology and brain science, … as well as sociology, history, social anthropology, linguistics and comparative animal ethology and sociology.” — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 328

Categorization

• XREF: This is an early precursor to behavioral economics critiques — connects to later tensions between ordoliberalism and economics as a hard discipline, and to the broader story of how heterodox economics got marginalized within the neoliberal project. — connects to: The Great Depression drove economists from theory toward empirical data — Quinn Slobodian, Globalists: The End of Empire and the…, 248; Empirical failure does not dislodge orthodox economists from their theory — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 722; Scholars should verify economic shifts empirically before explaining them — Greta R. Krippner, The Financialization of the American…, 10 (+5 more)

Broader Connections

• Herbert Simon’s bounded rationality decomposed the optimizing economic man #exemplifies (0.82) — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 331
• Eucken reconciled German historical and theoretical economics through ideal-type abstractions #complicates (0.80) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 532
• Experimental findings in economics circulate and reinforce the facts of the field #expands (0.78) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1980
• Labor market experiments contradict the self-interested prediction of standard economic theory #exemplifies (0.75) — Nicolas Baumard, A mutualistic approach to morality, 150