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Allen Oakley. Reconstructing Economic Theory: The Problem of Human Agency.

Allen Oakley. Reconstructing Economic Theory: The Problem of Human Agency. Cheltenham, UK, and Northampton, MA, US: Edward Elgar. 2002. xi + 234 pp. ISBN 1 84064 133. US$110.

The impetus behind this book by Allen Oakley lies in the perceived failure of mainstream economic theory to provide a methodology capable of appreciating how substantive economic phenomena are themselves products of human agency. This failure is traced to the unrealistic characterisation of human agency prevalent in mainstream economics. As the title of the book indicates, the intention is not primarily to provide a critique of mainstream economic theory, but to reconstruct the foundations of economics in the form of a 'humanistic social science'. This entails replacing the mainstream homo oeconomicus, where the assumption is that individuals know all relevant features of their situation, with a view of economic agents as subject to uncertainty and ignorance and embedded in situations which both constrain and enable actions.

Apart from an initial genuflexion to transcendental realism, which unfortunately appears to have become obligatory in 'alternative' texts, the main authors that Oakley discusses in developing his alternative perspective on human agency are Schutz, Popper, Shackle, Simon and, to a lesser extent, Giddens. Although most economists will be at least acquainted with the ideas of Popper, Shackle, and Simon, the works of Schutz and Giddens are probably less familiar.

Alfred Schutz (1899-1959) was born in Vienna and studied under von Mises, although his writings are primarily influenced by the work of Husserl and Weber. Schutz argued that the social world was already symbolically prestructured by the individuals who comprised it. Individuals interpret their 'lifeworld' situation, and hence the theories produced by the social investigator must connect up with the everyday understanding of the individuals involved. Anthony Giddens is one of a number of contemporary social theorists who have attempted to resolve the action/structure problem in social theory. Typically, individuals have been regarded as either completely autonomous agents or as passive 'products' of social structures and forces. Giddens argues that structures do not merely constrain, but also enable actions, and actions can both reproduce and transform these structures.

Oakley investigates these authors in turn in order to tease out the strengths and limitations of their ideas in developing an alternative view of human agency. These investigations are essentially self-standing, which reveals both the strengths and weakness of the book.

On the one hand this approach allows for an in-depth investigation of each author's ideas in their own right, independently of any need for comparisons. Schutz is praised for his querying of mainstream economic assumptions and developing an alternative 'rich and detailed understanding of the subjective and intersubjective nature of human agency' (p. 72), although also criticised for not adequately exploring the relevant limitations on agents' knowledge acquisition, particularly those raised by the question of time. In contrast Popper displayed an almost fawning admiration for economic theory, which, as Oakley keenly points out, is somewhat incongruous with his own methodological stance. A theorist who advocates the practice of 'falsification' and rejects an instrumentalist view of theory construction may have done well to pause for thought and wonder why the practitioners of the economic theory he so admired were more than happy to embrace this very instrumentalist perspective. Nevertheless, Popper's 'situational analysis' does draw attention to the significance of viewing human agents as embedded in situations and possessing limited intellectual capacities.

On turning to Shackle, Oakley recognises that the importance of intersubjectivity stressed by Schutz, and of situational analysis as developed by Popper, point to two areas unfortunately neglected by Shackle. Nevertheless, Shackle is praised for his emphasis on time and uncertainty, the creativity of human action, and the significance of imagination and expectations in human action. Regarding Simon, Oakley praises his emphasis on cognitive limitations, individual choice, and awareness that this is limited, although not determined, by the roles relevant to the individual's situation. However, Oakley is suspicious that Simon remains rather too close to the mainstream view, especially when appearing to accept that problems raised by uncertainty can be severely reduced, if not completely overcome, by further knowledge acquisition.

These discussions are all interesting and informative. This is especially true in the case of the investigations into Schutz and Shackle, which are more extensive than those into Popper and Simon. However, on the other hand, the disadvantage of this approach is that it diminishes the possibilities of either systematically comparing or attempting to synthesise the different perspectives of the authors discussed. Given that Oakley declines to explore these possibilities in the chapters devoted to the individual authors themselves, it might be anticipated that the conclusion of the book will address the relevant issues.

However, after a brief reiteration of the investigations carried out earlier, the final chapter states that 'it is an unfortunate fact that ... the social and economic philosophers we have selected for inclusion here chose to make only very limited contributions to these essential themes of situational analysis' (pp. 200-1). There follows a discussion of some of the ideas of the social theorist Giddens, who, until now, had warranted only occasional mention.

Oakley's apparent position here immediately raises a number of questions. Firstly, if the 'essential themes' of situational analysis are important in understanding human agency, yet the authors under discussion have only made limited contributions to these themes, why have these authors been discussed in the first place? It would seem more pertinent to discuss authors who do address, in some form, these 'essential themes', rather than those who do not. Secondly, if Giddens's social theory does encapsulate the way forward regarding these themes, why is his work not given more prominence, and this earlier on in the book? Thirdly, is there a suspicion that, in the final analysis, the author implicitly recognises that any attempt to synthesise the different perspectives discussed is simply too difficult a task?

An example might serve to illuminate this suspicion. The discussion of Schutz includes one section entitled 'self-consciousness and time' and another entitled 'choosing and acting in time'. Unsurprisingly, given Shackle's concerns, the discussion of Shackle contains numerous references to his ideas on time, including the comment that 'it was for its lack of any time consciousness ... that Shackle attacked the orthodox "model of man" used in neoclassical economics' (p. 114). In the final chapter Oakley offers his own view that human agents are 'embroiled in a perpetual stream of consciousness that only moves forward in time' (pp. 193-4).

Time is thus regarded as an important phenomenon by the two authors discussed in most detail, and by Oakley himself. However, are these different ideas on time compatible? How does Oakley's position relate to those of Schutz and Shackle? Do Schutz, taking his lead from Husserl, and Shackle, taking his lead from Descartes, mean the same thing by 'time consciousness'? One gets the sense of interesting issues which would warrant further investigation.

In conclusion, this is a good book for anyone wanting to get to grips with the ideas of Schutz and Shackle in particular, but also of Popper and Simon, and their respective criticisms of homo oeconomicus. However, there is a sense of two books struggling within the confines of a single volume, to the detriment of both. One book is primarily concerned with contrasting, comparing and, if possible, synthesising the views of the authors discussed. The other is primarily concerned with developing a theory of situated agency, for which Giddens appears to be the chosen theorist warranting engagement. It will be interesting to find out what direction any follow-up book will take.

Stephen Parsons, Department of Historical and International Studies, De Montfort University, Leicester LE1 9BH, UK. Email: SParsons@dmu.ac.uk.
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Author:Parsons, Stephen
Publication:History of Economics Review
Article Type:Book review
Date:Jun 22, 2003
Words:1277
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