Lawson, T.

Soro's theory of reflexivity: a critical comment

Revue de Philosophie Economique

Vol. 14(1) pp. 29-48 (2013)

Abstract: Modern academic economics is not explanatorily successful. Although this situation has long been evident, it has become widely recognised only with the onset of the recent economic crisis. With the situation now widely acknowledged, however, various initiatives have been launched in the hope of achieving something better. One highly significant such initiative has stemmed from George Soros’ insight that whilst reflexivity is a widespread feature of social reality, the sorts of economic theories that have dominated academic economic output are fundamentally inconsistent with it. Here I argue that whilst Soros’ contribution contains insight, it does not go far enough, and risks having the insights contained neglected due to the inclusion by Soros of various questionable assessments that are in any case unnecessary to the central argument.

Keywords: reflexivity, economic modeling, open and closed system, consistency, rational expectations hypothesis, equilibrium, efficient markets hypothesis, science

JEL Codes: A1, B4, G1

Author links: Tony Lawson  

Publisher's Link: http://www.cairn.info/resume.php?ID_ARTICLE=RPEC_141_0029