Economists’ modeling may bend economic reality toward theoretical assumptions

Evidence

As the economist and economic policy maker Alan Blinder has pointed out, in many respects global economies have in recent decades moved closer to the standard way in which economists model them, with, for example, its assumption of “single-minded concentration on profit maximization.” Blinder suspects that “economists … have bent reality (at least somewhat) to fit their models” (2000, pp. 16, 18). The anthropologist Daniel Miller likewise asserts that “economics has the authority to transform the world into its own image” (1998, p. 196). — Donald MacKenzie, An Engine, Not a Camera, 116

Categorization

• DEFINE: Names the performativity claim’s key intellectual forebears — Blinder and Miller — giving the reader named anchors for the thesis before the empirical work begins.
• XREF: Miller’s ‘authority to transform the world into its own image’ connects to wider sociology-of-economics debates beyond finance (economics as performative more broadly). — connects to: Economic theory is commonly assumed to map perfectly onto a constant reality — Mark Blyth, Austerity: The History of a Dangerous…, 119; Unrealistic assumptions do not count as legitimate criticisms in financial economics — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 63; Economic theories function as analytic engines rather than exact copies of reality. (+8 more)

Broader Connections

• Economic theories function as analytic engines rather than exact copies of reality. #corroborates (0.90)
• Empirical failure does not dislodge orthodox economists from their theory #corroborates (0.80) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 722
• Market conditions moved toward the model’s assumptions partly because of the model itself #corroborates (0.80) — Donald MacKenzie, An Engine, Not a Camera, 1155
• The model’s assumptions became more realistic as markets restructured around it #corroborates (0.80) — Donald MacKenzie, An Engine, Not a Camera, 741
• Friedman armed finance theorists against ‘unrealistic’ critiques of their models. #exemplifies (0.80) — Donald MacKenzie, An Engine, Not a Camera, 62
• Neoliberal economics rests methodologically on methodological individualism and market-clearing assumptions #expands (0.75) — Mark Blyth, Austerity, 125
• A market model can shape markets actively rather than merely describing them #corroborates (0.75) — Donald MacKenzie, An Engine, Not a Camera, 1165