Subjectivism and Interpretative Methodology in Theory and Practice

Fu-Lai Tony Yu

Description

A study of the subjectivist approach to understand economic and social phenomena

The contemporary social science in general and economics in particular are dominated by the method of logical positivism in the British tradition. In contrast to the British philosophy, ‘Subjectivism and Interpretative Methodology in Theory and Practice’ adopts subjectivism and interpretation methodology to understand human behavior and social action.

Unlike positivism, this subjectivist approach, with its root in German idealism, takes human experience as the sole foundation of factual knowledge. All objective facts have to be interpreted and evaluated by human minds. In this approach, experience, knowledge, expectation, plans, errors and revision of plans are key elements.

Specifically, this volume uses the subjectivist approach originated in Max Weber’s interpretation method, Alfred Schutz’s phenomenology, and Peter Berger and Thomas Luckmann’s sociology of knowledge to understand economic and social phenomena. The method brings human agency back into the forefront of analysis, adding new insights not only in economics and management, but also in sociology, politics, psychology and organizational behavior.

List of Illustrations; Preface; Acknowledgements; Introduction; 1. Methodological Subjectivism and Interpretive Approach in Political Economy; Part 1 Some Theoretical Issues; 2. Subjectivism in the Austrian School of Economics (with Gary M. Shiu); 3. Frank H. Knight’s Thought Revisited: Subjectivism, Interpretation and Social Economics; 4. Two Perspectives of Time in Economics: The Orthodox Neoclassical School (Newtonian) versus the Austrian School (Bergsonian); 5. Human Action and Coordination in Two Subjectivist Perspectives; 6. Subjectivism, Understanding and the Transaction Costs Paradigm; Part 2 Applications; 7. Blowing a Breath of Life into the Firm: Toward a Lachmannian Perspective of the Firm; 8. Expectation, Subjective Time Preference and Business Cycles; 9. Toward a Theory of Social Construction of National Identity (with Diana S. Kwan); 10. Novelty and Intersubjective Communication: From Denial to Acceptance of Vincent van Gogh’s Paintings; 11. The Sinking of the Unsinkable Titanic: Mental Inertia and Coordination Failures; 12. A Subjectivist Approach to Advertising: The Case of Vitasoy in Hong Kong (with Diana S. Kwan); 13. Outcomes-Based Education: A Subjectivist Critique; Index.

Sujets

• Sociologie, société et politique
• Sociology
• Methodology
• Social theory
• Social sciences

Informations

• Publié par: Anthem Press
• Date de parution: 15 février 2020
• Nombre de lectures: 2
• EAN13: 9781785272134
• Langue: English

Extrait

Subjectivism and Interpretative Methodology in Theory and Practice
Subjectivism and Interpretative Methodology in Theory and Practice
Fu-Lai Tony Yu
Anthem Press
An imprint of Wimbledon Publishing Company
www.anthempress.com
This edition first published in UK and USA 2020
by ANTHEM PRESS
75–76 Blackfriars Road, London SE1 8HA, UK
or PO Box 9779, London SW19 7ZG, UK
and
244 Madison Ave #116, New York, NY 10016, USA
Copyright © Fu-Lai Tony Yu 2020
The author asserts the moral right to be identified as the author of this work.
All rights reserved. Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the above publisher of this book.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library.
ISBN-13: 978-1-78527-211-0 (Hbk)
ISBN-10: 1-78527-211-X (Hbk)
This title is also available as an e-book.
CONTENTS
List of Illustrations
Preface
Acknowledgements
Introduction
1. Methodological Subjectivism and Interpretive Approach in Political Economy
Part 1 Some Theoretical Issues
2. Subjectivism in the Austrian School of Economics (with Gary M. Shiu)
3. Frank H. Knight’s Thought Revisited: Subjectivism, Interpretation and Social Economics
4. Two Perspectives of Time in Economics: The Orthodox Neoclassical School (Newtonian) versus the Austrian School (Bergsonian)
5. Human Action and Coordination in Two Subjectivist Perspectives
6. Subjectivism, Understanding and the Transaction Costs Paradigm
Part 2 Applications
7. Blowing a Breath of Life into the Firm: Toward a Lachmannian Perspective of the Firm
8. Expectation, Subjective Time Preference and Business Cycles
9. Toward a Theory of Social Construction of National Identity (with Diana S. Kwan)
10. Novelty and Intersubjective Communication: From Denial to Acceptance of Vincent van Gogh’s Paintings
11. The Sinking of the Unsinkable Titanic : Mental Inertia and Coordination Failures
12. A Subjectivist Approach to Advertising: The Case of Vitasoy in Hong Kong (with Diana S. Kwan)
13. Outcomes-Based Education: A Subjectivist Critique
Index
Illustrations
Figures
1.1 The Evolution of Austrian Subjectivism
2.1 Major Architects in the Austrian School of Economics
7.1 The Growth of the Firm
Table
5.1 Schutz’s Phenomenology versus Hayek’s Cognitive Psychology
Preface
The contemporary social science in general and economics in particular are dominated by the method of logical positivism in the British tradition. This method has been extremely successful in dealing with physical phenomena in science that scholars in social sciences attempt to investigate the possibility of applying the scientific method to explain and predict human actions and social phenomena. Since then, positivism has been widely adopted in economics, management and sociology, including criminology, marketing research, policy analysis, program evaluation, urban planning and so on.
In contrast to the British philosophy, some scholars in the continental Europe think that social sciences differ from natural sciences. A science of human action consists in meaningful behaviour and cannot be observed as in physical science. Max Weber, the social science giant, suggests a method which he called Verstehen (or subjective interpretation) to understand human behaviour and social action. Unlike positivism, this subjectivist approach, with its root in German idealism, takes human experience as the sole foundation of factual knowledge. All objective facts have to be interpreted and evaluated by human minds. In this approach, experience, knowledge, expectation, plans, errors and revision of plans are key elements. Unlike most reference books in the market which take on the positivist method, this volume uses the subjectivist approach originated in Max Weber’s interpretation method, Alfred Schutz’s phenomenology, Peter Berger and Thomas Luckmann’s sociology of knowledge to understand economic and social phenomena. Our method brings human agency back into the forefront of analysis, adding new insights not only in economics and management, but also in sociology, politics, psychology, and organizational behaviour. This book puts together 13 papers in human agency perspective while the author taught economics and ethics, economic development and entrepreneurship at Monash University (Australia), Feng Chia University (Taiwan), and Shue Yan University (Hong Kong).
Chapter 1 introduces the method of subjectivism and interpretation in social science. It also serves as a methodological foundation for the arguments in subsequent chapters. Acknowledging the shortcomings of contemporary research methodology on social science in general and economics in particular, this opening chapter proposes a subjectivist research program. This subjectivist perspective is originated in German idealism and found its base in the Austrian School of Economics. Based largely on the works on Max Weber, Alfred Schutz and Ludwig von Mises, this chapter develops a subjective interpretation framework which can be applied to understand a wide range of economic and social issues, including business cycle, peace and conflict resolution, management of technology, advertising, organizational inertia, and educational reform.
Chapters in Part I deal with theoretical issues. Chapter 2 introduces the evolution of Austrian economics by identifying the major architects of the Austrian school. It argues that Austrian Economics adopts methodological subjectivism and interpretative approach in scientific inquiry. Moreover, after Ludwig von Mises, Austrian thinking split into major camps, namely, radical subjectivist Austrian represented by Ludwig M. Lachman and Neoclassical Austrian represented by Friedrich A. Hayek and Israel M. Kirzner. The essences of Austrian subjectivism are manifested in the discussion on entrepreneurship in the market process, knowledge and coordination problems, capital theories, impossibility of central planning, and Austrian business cycle. The chapter highlights agreements with the public choice school, new institutional economics, evolutionary economics, feminist economics, behavioural economics, and disagreements with Marxist economics, the Neo-Ricardian School, and orthodox Neoclassical paradigm. It also clarifies similarities and differences between the Chicago School and Austrian School of Economics.
The Chicago School of Economics is well known in empirical economics. However, Frank Knight, one of the founders of the Chicago School, does not opt for the positivist approach. Influenced by German philosophy, much of his works exhibit subjectivism. Chapter 3 discusses Frank H. Knight’s thought under three major themes, namely subjectivism, interpretation and social economics. Knight’s economics starts with a conscious mind construct which is able to infer under partial knowledge. Conscious human action is purposive, forward looking, and extends towards other individuals. Rejecting neoclassical positivism, Knight points to the need for economics to reconceptualize itself as an interpretative study, a methodology in the Weberian tradition. Furthermore, his allure for phenomenological economics opens a methodological possibility for the Austrian School of Economics. This chapter concludes that Knight’s insight earns himself a place in the history of subjectivist economics.
Chapter 4 discusses the treatment of time in economic analysis. This chapter has two objectives. Firstly, it compares the concept of time in two economic paradigms, the Neoclassical and the Austrian school. Secondly, it traces the development of the concept of subjective time in the Austrian School of Economics from Carl Menger to the contemporary Austrian economists. The Neoclassical school uses a Newtonian time concept in which time is homogeneous, mathematically discontinuous, and causal inertia, while most Austrian economists adopt Henri Bergson’s concept of time, where time is subjective and continuous, meaning that events are linked with each other. This implies that an individual’s decision will affect on the future, an effect which is unpredictable. Illustrations on the usefulness of the subjective time in understanding human action and economic phenomena are given. This chapter concludes that it is more fruitful to use Bergsonian time than Newtonian time in economic research.
Chapter 5 utilizes the contributions of Alfred Schutz and Friedrich A. Hayek to understand the coordination of human actions. In terms of Schutz’s phenomenology, this chapter argues that intersubjectivity allows economic activities to be coordinated. When the actor’s interpretative framework is disrupted by a novel stimulus, the actor will project action in the future perfect tense. Through typification, a new stock of knowledge is established to enable the actor to solve new problems. The society’s stock of knowledge in which actors share serves as a social coordinator. In terms of Hayek’s cognitive psychology, during the perception process, the actor’s mind can classify events coming in from the outside world. If incoming events are repeated, a pattern will register in the mind and become a rule of thumb in decision-making. If the mental map fails to give a sensible account of a novel event, the actor is then in