IDEAS home Printed from
   My bibliography  Save this paper

Critical Realism in Economics and Open-Systems Ontology: A Critique


  • Andrew Mearman

    (School of Economics, University of the West of England)


This paper examines the treatment of ontology offered by Critical Realism. Three main criticisms are made of the Critical Realist treatment of open systems. It is argued that Critical Realism, particularly in the project in economics emanating from Cambridge, UK, tends to define systems in terms of events. This is shown to be problematic. The exemplar of a closed system provided by Critical Realism of the solar system is shown to be flawed in that it is not closed according to the closure conditions identified by Critical Realism. Second, the negativity of the definitions adopted is problematic for heterodox traditions attempting to build positive programs. The dualism of the definitions is also inconsistent with Dow’s approach. This has ramifications for the coherence of Post Keynesianism. Third, the definitions tend to polarize open and closed systems and ignore the degrees of openness evident in reality. This polarization of systems leads to polarized methodology and unsustainable arguments to reject so-called closed-systems methods.

Suggested Citation

  • Andrew Mearman, 2004. "Critical Realism in Economics and Open-Systems Ontology: A Critique," Working Papers 0401, Department of Accounting, Economics and Finance, Bristol Business School, University of the West of England, Bristol.
  • Handle: RePEc:uwe:wpaper:0401

    Download full text from publisher

    File URL:
    File Function: First version, 2004
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    1. Frederic S. Lee, 2002. "Theory creation and the methodological foundation of Post Keynesian economics," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 26(6), pages 789-804, November.
    2. Tony Lawson, 1997. "Critical Issues in Economics as Realist Social Theory," Ekonomia, Cyprus Economic Society and University of Cyprus, vol. 1(2), pages 75-117, Winter.
    3. Lawson, Tony, 1989. "Realism and Instrumentalism in the Development of Econometrics," Oxford Economic Papers, Oxford University Press, vol. 41(1), pages 236-258, January.
    4. Tony Lawson, 1994. "The Nature of Post Keynesianism and Its Links to Other Traditions: A Realist Perspective," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 16(4), pages 503-538, July.
    5. Kaldor, Nicholas, 1972. "The Irrelevance of Equilibrium Economics," Economic Journal, Royal Economic Society, vol. 82(328), pages 1237-1255, December.
    6. Philip Faulkner, 2002. "Some problems with the conception of the human subject in critical realism," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 26(6), pages 739-751, November.
    7. Andrew Brown & Gary Slater & David A. Spencer, 2002. "Driven to abstraction? Critical realism and the search for the 'inner connection' of social phenomena," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 26(6), pages 773-788, November.
    8. Paul Downward & John H. Finch & John Ramsay, 2002. "Critical realism, empirical methods and inference: a critical discussion," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 26(4), pages 481-500, July.
    9. Tony Lawson, 1997. "Situated rationality," Journal of Economic Methodology, Taylor & Francis Journals, vol. 4(1), pages 101-125.
    10. Stephen P. Dunn, 2000. "Wither Post Keynesianism?," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 22(3), pages 343-364, March.
    11. Paul Downward & Andrew Mearman, 2005. "Presenting ‘Demi-Regularities' of Pricing Behaviour: The Need for Triangulation," Chapters, in: L. Randall Wray & Mathew Forstater (ed.), Contemporary Post Keynesian Analysis, chapter 16, Edward Elgar Publishing.
    12. Stephen Pratten, 2005. "Economics as progress: the LSE approach to econometric modelling and critical realism as programmes for research," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 29(2), pages 179-205, March.
    13. Lawson, Tony, 1995. "The 'Lucas Critique': A Generalisation," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 19(2), pages 257-276, April.
    14. Paul Downward, 1999. "Pricing Theory in Post Keynesian Economics," Books, Edward Elgar Publishing, number 1457.
    15. Siakantaris, Nikos, 2000. "Experimental Economics under the Microscope," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 24(3), pages 267-281, May.
    16. Sheila Dow, 2004. "Reorienting Economics: Some epistemological issues," Journal of Economic Methodology, Taylor & Francis Journals, vol. 11(3), pages 307-312.
    17. Dow, Sheila C., 2000. "Prospects for the Progress of Heterodox Economics," Journal of the History of Economic Thought, Cambridge University Press, vol. 22(2), pages 157-170, June.
    18. T. Lawson., 2006. "A Realist Perspective on Contemporary "Economic Theory"," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 2.
    19. John H. Finch & Robert McMaster, 2002. "On categorical variables and non-parametric statistical inference in the pursuit of causal explanations," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 26(6), pages 753-772, November.
    20. Paul Lewis & Jochen Runde, 1999. "A Critical Realist Perspective on Paul Davidson’s Methodological Writings On—And Rhetorical Strategy For—Post Keynesian Economics," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 22(1), pages 35-56, September.
    21. Paul Downward & Andrew Mearman, 2002. "Critical Realism and Econometrics: Constructive Dialogue with Post Keynesian Economics," Metroeconomica, Wiley Blackwell, vol. 53(4), pages 391-415, November.
    22. Alex Viskovatoff, 1998. "Is Gerard Debreu a Deductivist? Commentary on Tony Lawson's Economics and Reality," Review of Social Economy, Taylor & Francis Journals, vol. 56(3), pages 335-346.
    23. Sheila C. Dow, 1996. "The Methodology of Macroeconomic Thought," Books, Edward Elgar Publishing, number 933.
    24. Sheila C. Dow, 1999. "Post Keynesianism and Critical Realism: What Is the Connection?," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 22(1), pages 15-33, September.
    25. Lawson, Tony, 1989. "Abstraction, Tendencies and Stylised Facts: A Realist Approach to Economic Analysis," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 13(1), pages 59-78, March.
    26. Walters, Bernard & Young, David, 1997. "On the Coherence of Post-Keynesian Economics," Scottish Journal of Political Economy, Scottish Economic Society, vol. 44(3), pages 329-349, August.
    27. Hahn, F H, 1989. "Kaldor on Growth," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 13(1), pages 47-57, March.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Roy J. Rotheim, 2013. "The economist who mistook his model for a market," Chapters, in: Jesper Jespersen & Mogens Ove Madsen (ed.), Teaching Post Keynesian Economics, chapter 2, pages 34-55, Edward Elgar Publishing.
    2. Duo Qin, 2014. "Inextricability of Autonomy and Confluence in Econometrics," Working Papers 189, Department of Economics, SOAS University of London, UK.
    3. Eduardo Strachman & Jos Ricardo Fucidji, 2012. "The Current Financial And Economic Crisis Empirical And Methodological Issues," Journal of Advanced Studies in Finance, ASERS Publishing, vol. 3(1), pages 95-109.
    4. Lang, Trudi & Ramírez, Rafael, 2017. "Building new social capital with scenario planning," Technological Forecasting and Social Change, Elsevier, vol. 124(C), pages 51-65.
    5. Jussi Ahokas, 2011. "A comprehensive view of regional economic development in Finland," ERSA conference papers ersa10p469, European Regional Science Association.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Annina Kaltenbrunner, 2018. "Financialised internationalisation and structural hierarchies: a mixed-method study of exchange rate determination in emerging economies," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 42(5), pages 1315-1341.
    2. Fontana, Giuseppe & Gerrard, Bill, 2004. "A Post Keynesian theory of decision making under uncertainty," Journal of Economic Psychology, Elsevier, vol. 25(5), pages 619-637, October.
    3. Giuseppe Fontana & Bill Gerrard, 2006. "The future of Post Keynesian economics," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 59(236), pages 49-80.
    4. Eduardo Fernández-Huerga & Ana Pardo & Ana Salvador, 2023. "Compatibility and complementarity between institutional and post-Keynesian economics: a literature review with a particular focus on methodology," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 40(2), pages 413-443, July.
    5. Lee, Frederic, 2012. "Critical realism, grounded theory, and theory construction in heterodox economics," MPRA Paper 40341, University Library of Munich, Germany.
    6. Ioana Negru, 2013. "Revisiting the Concept of Schools of Thought in Economics: The Example of the Austrian School," American Journal of Economics and Sociology, Wiley Blackwell, vol. 72(4), pages 983-1008, October.
    7. Dr Paul Downward, "undated". "Realism and Inference in Economics: A Note," Working Papers 98-7, Staffordshire University, Business School.
    8. Fulvio Castellacci, 2006. "A critical realist interpretation of evolutionary growth theorising," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 30(6), pages 861-880, November.
    9. Lee, Frederic, 2011. "The making of heterodox microeconomics," MPRA Paper 30907, University Library of Munich, Germany.
    10. Siobhan Austen & Therese Jefferson, 2006. "Comparing responses to critical realism," Journal of Economic Methodology, Taylor & Francis Journals, vol. 13(2), pages 257-282.
    11. Imko Meyenburg, 2022. "A possibilist justification of the ontology of counterfactuals and forecasted states of economies in economic modelling," Working Papers hal-03751205, HAL.
    12. Phil Faulkner & Stephen Pratten & Jochen Runde, 2017. "Cambridge Social Ontology: Clarification, Development and Deployment," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 41(5), pages 1265-1277.
    13. Giuseppe Fontana, 2006. "“Mr Keynes and the ‘Classics’” Again: A Methodological Enquiry," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 34(2), pages 161-174, June.
    14. Patel, Pankaj C. & Fiet, James O., 2010. "Enhancing the internal validity of entrepreneurship experiments by assessing treatment effects at multiple levels across multiple trials," Journal of Economic Behavior & Organization, Elsevier, vol. 76(1), pages 127-140, October.
    15. Lukáš Kovanda, 2010. "Kritický realismus: ontologická báze postkeynesovské ekonomie [Critical Realism as an Ontological Basis of Post-Keynesianism]," Politická ekonomie, Prague University of Economics and Business, vol. 2010(5), pages 608-622.
    16. Paul Downward, "undated". "Risk, Uncertainty and Inference in Post Keynesian Economics:A Realist Commentary," Working Papers 98-8, Staffordshire University, Business School.
    17. Jacques-Laurent Ravix, 1997. "Fondements critiques pour une analyse de la dynamique industrielle : la méthode de Allyn Young," Revue Économique, Programme National Persée, vol. 48(4), pages 965-988.
    18. Paul Downward & Frederick Lee, "undated". "Post Keynesian Pricing Theory `Reconfirmed'(?) A Critical Review of `Asking About Prices'," Working Papers 98-13, Staffordshire University, Business School.
    19. Tae-Hee Jo, 2015. "Financing Investment under Fundamental Uncertainty and Instability: A Heterodox Microeconomic View," Bulletin of Political Economy, Bulletin of Political Economy, vol. 9(1), pages 33-54, June.
    20. Thomas Brenner & Claudia Werker, 2007. "A Taxonomy of Inference in Simulation Models," Computational Economics, Springer;Society for Computational Economics, vol. 30(3), pages 227-244, October.

    More about this item


    open systems; closed systems; Critical Realism; Post-Keynesianism; dualism;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:uwe:wpaper:0401. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jo Michell (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.