Economic theory is commonly assumed to map perfectly onto a constant reality

Evidence

We tend to think of economic theory as the instruction sheet for running the economy. Like the instructions that come with an IKEA dining table, the theory says that the box marked “the economy” contains X items that fit together in Y order. Ignore the instruction sheet and your economic IKEA dining table will not come out too well. This view sees economic theory as what philosophers call a “correspondence theory” of the world. Whatever the instruction sheet (theory) says about the table (reality) is true about all tables (states of the world) regardless of where and when the information is applied. But what if economic theories are less than these perfect correspondences of the world? What if our knowledge of the economy becomes less relevant over time as the world changes while the theory stays the same? Our theory would then correspond less over time, becoming in the process a less reliable instruction sheet. — Mark Blyth, Austerity, 119

Categorization

• XREF: This instruction-sheet framing of economic theory as correspondence anticipates Blyth’s core critique and connects to Mattei’s work on ideas in the austerity debate. — connects to: Economic man’s rationality is founded precisely on everything that eludes his calculation — Michel Foucault, The Birth of Biopolitics: Lectures at…, 1438; Economics actively shapes the economy rather than merely describing it — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 1987; Economic rationality is founded on the unknowability of the whole economic process — Michel Foucault, The Birth of Biopolitics: Lectures at…, 1453 (+8 more)

Broader Connections

• Economics actively shapes the economy rather than merely describing it #complicates (0.82) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 1987
• Economists’ modeling may bend economic reality toward theoretical assumptions #complicates (0.82) — Donald MacKenzie, An Engine, Not a Camera, 116
• Economic man’s rationality is founded precisely on everything that eludes his calculation #complicates (0.80) — Michel Foucault, The Birth of Biopolitics, 1438
• Economic rationality is founded on the unknowability of the whole economic process #complicates (0.80) — Michel Foucault, The Birth of Biopolitics, 1453
• Economic theories are endogenous and actively shape the world they describe. #complicates (0.80) — Mark Blyth, Austerity, 122
• Economic concepts actively constitute the economic behavior they describe #complicates (0.78) — Anthony Giddens, The Consequences of Modernity, 105
• Economic theory embodied in devices performs and creates its own posited phenomena. #complicates (0.78) — Donald MacKenzie, An Engine, Not a Camera, 1196
• Economic theories function as analytic engines rather than exact copies of reality. #complicates (0.78)
• Financial theories can become true by guiding the practices they describe #complicates (0.78) — Gerald F. Davis & Suntae Kim, Financialization of the Economy, 38
• Economic models are deliberately simplified representations enabling mathematical reasoning. #qualifies (0.72) — Donald MacKenzie, An Engine, Not a Camera, 40
• Ideal-type economic actor models are caricatures rarely found in pure form #complicates (0.72) — Aris Komporozos-Athanasiou, Speculative Communities, 50