5. Methodology, Modelling and Bias

In this chapter, the author draws on the discipline of epistemology to pinpoint exactly the problems with modern economic methodology. Economic modelling is examined in detail and shown to be a particular form of what epistemologists call ‘abstraction’. The author explores top what extent abstraction can be fruitfully applied in economics. ‘Microfoundations’, a popular fad in contemporary mainstream economics, are then explored given what has already been discussed regarding abstractions. An approach to economic methodology that the author calls ‘schematism’ is then proposed to ensure valid logical and empirical inferences from economic theory. Finally, the author attempts to form a comprehensive epistemological theory of bias in human and natural sciences in order to try to ‘inoculate’ economics from biases.