Articles

La controverse sur l'entreprise (1940-1950) et la formation de l'"irréalisme méthodologique"

P. MONGIN

Economies et Sociétés

November-December 2014, n°51, pp.1805-1860

Departments: Economics & Decision Sciences, GREGHEC (CNRS)

Keywords: Enterprisen Firm, Firms, Marginalism, Methodological, Neo Classical, Philosophy, Realism

http://ssrn.com/abstract=2648010


The 1940s and 1950s witnessed a crisis in the Neo-Classical theory of the firm. Some Oxford economists put forward the "full-cost pricing" doctrine of which they thought as being an alternative to Marginalism, whereas the American Economic Review published various heterodox pieces on average cost or the routines followed by business men. The present article aims at analyzing the critical points made by the antimarginalists at the same time as the answers which they triggered out in the marginalist camp. It is shown that the anti-marginalist attack failed partly because of its own weaknesses, partly because of the changes, technical and methodological, which orthodox theory underwent during the controversy. First of all, some objections could be easily dealt with once the abstract hypothesis of profit-maximisation was made crucial and economists started to regard marginal curves as paraphernalia. Second, and more importantly, "methodological irrealism" was widely adhered to in the marginal camp. This is how every psychological objection whatsoever, as well as some potentially embarrassing objections to pure static or comparative static analysis, were disposed of. This article focuses on the connection between the 'marginalist controversy' and the later-born concept of "irrealism". The various meanings of Freidman's dictum are analyzed contextually, by reference to particular examples borrowed from the history of the controversy. It becomes clear how "methodological irrealism" offered an ad hoc defensive system against refutation, a result which is hardly desirable from the viewpoint of philosophy of science.


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