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From Methodology to Practice (and Back): Georgescu-Roegen's Philosophy of Economics and the Flow-Fund Model

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  • Quentin Couix

    () (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

Despite his early contribution to the rise of mathematics in economics, Georgescu-Roegen's later methodological criticism of models has received little attention from historians and philosophers of economics. This paper attempts to fill this gap following two lines. First, I examine his explicitly methodological claims and connect them with related topics in economic methodology. Building on the distinction between dialectical and arithmomorphic concepts, I characterise his approach to theory-making as a three steps process of idealisation, isolation and arithmetisation. In this framework, models perform two functions, checking for logical consistency and facilitating understanding, which can be related to the idea of modelling as theorising. I then confront these general principles with Georgescu-Roegen's flow-fund model of production. I use the methodology as a reading grid of this theory, while examining its limits and complementary principles in practice. This shows a great deal of consistency, where idealisation provides conceptual foundations, isolation determines the relevant problems, and models are built according to structural consistency. The two functions of models are then illustrated by the logical derivation of older principles formulated by Babbage and Smith, and the understanding of the different organisational patterns of production. But some slightly different functions also appear when specific configurations of the model enable to check the conceptual consistency of other theories, or the understanding provided by the model contributes to the formation of new concepts. Hence, the consistency and the complementarity between Georgescu-Roegen's methodology and practice of theory-making provide interesting insights and a useful background for further investigations.

Suggested Citation

  • Quentin Couix, 2018. "From Methodology to Practice (and Back): Georgescu-Roegen's Philosophy of Economics and the Flow-Fund Model," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01854031, HAL.
  • Handle: RePEc:hal:cesptp:halshs-01854031
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01854031
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    methodology; philosophy; models; flow-fund; production function; input-output; Georgescu-Roegen; méthodologie; philosophie; modèles; flux-fond; fonction de production; entrée-sortie; substitution;

    JEL classification:

    • B16 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - Quantitative and Mathematical
    • B31 - Schools of Economic Thought and Methodology - - History of Economic Thought: Individuals - - - Individuals
    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • C65 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Miscellaneous Mathematical Tools
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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