is economics a social science

is economics a social science

Exploring the Interdisciplinary Nature of Economics as a Social Science

1. Introduction to Economics as a Social Science

Economics as a social science adopts a positive scientific view of the world; at the same time, it rejects the deliberately restricted and simplified models of positivist sciences. It likes to base itself on the relevant facts of human relationships, at all levels of aggregation: including those of interaction, exchange, communication, cooperation, decision-making, and conflict anticipation and prevention, as well as social control and consensus conservation. One of these very specific features of economics is the connection which it makes with other disciplines and sociology, having to do with the individual (actor) and social actors (act-think-feel-use power-act-receive benefit-suffer costs). Because of this very specific feature, economics cannot be limited to an attempt to build a self-centered theory of action which is not endorsed by social life.

“The subject has come to be associated with the scientific investigation of many, if not the most fundamental, constraints which influence the building up of relationships between individuals and groups of different natures: altruistic, cooperative, competitive. Thus, it is much more than a science of employment and wealth: it is a system of thought which deals with the past and the present and aims to offer some proposed designs for the future.

Palgrave’s Dictionary of Economics (1987, p. 1) provides the following notion of economics as a social science: “Economics is the youngest and most modern of all the consumer-oriented social sciences. It is engaged in the production and transfer of the knowledge needed for the successful management of the many different types of living which societies have achieved through history.”

2. Historical Development of Economics and its Relationship to Other Social Sciences

Approaching the conceptual mindset that supports other social sciences is particularly relevant for economics. Given that contemporary economics, as a social science, differs substantially in scope and in its methodological development – compared with the original logic from which economists originated (political economy) – an understanding of its interdisciplinary character can help identify some of the main issues of discussion in current economics research. The historical development of economics and its relationship to other social sciences (Section II), the existing links between economics and other social sciences (Section III), and the study of other social sciences and their mutual relationship (Section IV) can help define future challenges and opportunities for research and better contribute to the solution of current econometric problems and as a complement to statistical methods to promote the validity and reliability of the results obtained, especially in the fields of economics where the multi- and the interdisciplinary have shown great potential in understanding complex socioeconomic problems, as well as in conflict situations. The latter has attracted special attention in the application of the proposed approaches.

3. Methodologies and Theories in Economics: A Social Science Perspective

When describing and explaining the wide range of economic concerns, it is important to have confidence in our theories of economic phenomena and the observational data associated with them. Economic theory is sometimes characterized as the ‘science of choice’, a characterization which captures two important elements: firstly, people choose thoughtfully (rationally); and secondly, people have mutually exclusive ends. A critical element of economic theory is to model human (and organizational) behavior as maximizing an objective function subject to constraints, subject to incentives, and responding to variations in incentives. Jevons called this a calculus of pleasure and querelle, Hicks related it to a hedonist psychic calculus, while Gossen related the economic objective to personal satisfaction. Early economists studied how people cope with scarcity, they talked about miserly satisfaction, courageously confronting life by obeying rules derived only from the common practice of the various actions. The assumption enters through individuals’ utility functions and stores, which are the subjective equivalents of objective preferences. These can be thought of as representing the relative desirability of alternative consumption or production opportunities. There are three common formulations of utility: cardinal utility, ordinal utility, and abstract utility. Economic assumptions are not unconditional; they are essentially institutional. In the Canon of the Rhetoric of Economic Sentences, institutionalisms question many of the assumptions derived from the institutional blackboard that are used by neoclassical theorists. Unlike institutional economists, the solutions derived from neoclassicals looking to the heavenly model come to function through a series of interaction forms. Neoclassical economics can be considered one of the first attempts in the field of economics to conceptualize and analyze production, through which it searched for freedom from debt and by overcoming scarcity to boost wealth.

Economic methodology is the study of the methods and principles by which economists come to acquire knowledge of economic phenomena. Normatively, it focuses on the best ethical judgments of the role of the economist in society, related to the application of the positive theory of markets and the national interest. Currently, with respect to methods, economic science is based on a limited and consistent set: solution systems, the Bologna paradigm, model theory, Hyperreals, and game theory. Theorems, on the other hand, represent specific representations of significant data corollaries related to economic theories, also called fundamental concepts of the evolutionary process.

4. Key Debates and Controversies in Economics as a Social Science

Such debate and controversy suggest that research in economics is starting to appreciate some of the concrete arch problems that confront us with increasing urgency. I will return to some of these normative and interdisciplinary topics as the chapter continues.

Yet, more social scientists are keenly interested in the kinds of questions that economics seeks to make sense of, as distinct from the preferred methodologies and techniques driven by economists themselves. The advent of new Open Science policies and platforms introduces concomitant relational changes towards greater transparency, replicability, and reproducibility. This helps address contemporary concerns, including the replicability and robustness of empirical research, research waste, and the rise of fraud and manipulation in research conducted by for-profit organizations.

Economics as an empirical discipline has grown significantly in data quality and availability. This can be attested by the sharp increase in the number of variables and observations available to explore a given research question. Indeed, the role of the three Vs of big data – volume, velocity, and variety – may offer economics a new domain of interaction with other disciplines interested in exploring interactions between digital transformation, the abundance of information, and human societies. This includes the nascent field of digital sociology.

Interest in hiring across the economy is a testament to the insights and utility that rigorous and scientific economics can provide in helping us understand the process of globalization and the unequally shared benefits of innovation and technological change. It also helps us understand the re-emergence of China as a dominant economic power, the rise of populism, and the need to better understand and address fundamental long-term problems facing human societies, such as food, water, and energy security, and climate change.

More broadly, there is frequent debate over the relevance of economics as currently practiced, as distinct from the abstract deductive reasoning around fundamental concepts such as cost-benefit analysis and rational choice. The huge rise in inequality within many high-income countries, the failure of many advanced economies to achieve sustainable growth after the global financial crisis, and the increasing trends in the commercialization of the economics profession in terms of placements, corporate funding, and use of media outlets have all led to long overdue responses from the economics profession. This includes the launch of initiatives such as the Institute for New Economic Thinking (INET) and responses from funding bodies, research establishments, and universities prior to and during the COVID-19 pandemic.

Key debates and controversies within economics today frequently revolve around the role of incentives and institutions, the nature and political economy of policy-making, and how economics is taught and practiced within universities. This includes the extent to which mathematical modeling and the use of experimental methods should be encouraged as part of the ongoing learning and discovery process.

5. The Future of Economics: Interdisciplinary Approaches and Collaborations

The fact that so many fields use the basic toolkit of economics suggests an opportunity for collaborative research focusing on real-world problems that involve decision makers who respond to the incentives that are part and parcel of an economic model. Will we get to a day when a student majoring in physics also has a minor in economics—and a student studying economics also has a minor in computer science or neuroscience? For some schools, this is already being realized and is common. For others, however, it may take time to achieve. Regardless of the direction taken by a school or program, some viewpoints will argue that the effect and consequence of such a trend might be positive and lead to increased value and output for students, research, policy, and society. Can the traditional economics department offer such cross-disciplinary education and research training while maintaining core strengths? Can subject matter specialists incorporate more insights and tools from economics in the classes they teach and in their individual and collaborative research efforts?

What does the future of economics look like? How will the discipline change and evolve? There is increasing recognition of the need to address real-world problems. As mentioned in the introduction, introductory economics classes are attracting growing interests from the student body. This may represent a growing recognition of the need to address problems that are part of students’ current concerns such as income distribution, inequality, discrimination, environmental issues, and the growing prevalence of market power. Students understand that our complex economy does not fit neatly within the margins of perfectly competitive markets depicted in traditional textbooks. This will continue to spur curriculum changes.