Greedy Reductionism, Science and Economics

John E. King’s new book The Microfoundations Delusion: Metaphor and Dogma in the History of Macroeconomics (Cheltenham, 2012) charges neoclassical economics with the delusion that macroeconomic processes must just be explained in terms of microeconomics, and indeed that microeconomics is the proper foundation for all macroeconomic phenomena.

These ideas can be called “strong reductionism” and, curiously enough, the neoclassical delusion is a perfect example of what philosophers call “greedy reductionism.” The philosopher Daniel Dennett usefully calls “strong reductionism” the error of “greedy reductionism”: the belief that higher-level principles and traits of complex systems of all sciences (including social sciences) should be abandoned or simply explained in terms of lower-level terms (Dennett 1995: 80–81).

So what is the influence of this idea in the natural sciences and social sciences?

I. Reductionism in the Natural Sciences
King, citing the work of others, charges certain scientists with the “strong reductionism” fallacy, such as Richard Dawkins.

The objection is described by Lewontin, Rose, and Kamin in the following terms:

“Broadly, reductionists try to explain the properties of complex wholes—molecules, say, or societies—in terms of the units of which those molecules or societies are composed. They would argue, for example, that the properties of a protein molecule could be uniquely determined and predicted in terms of the properties of the electrons, protons, etc., of which its atoms are composed. And they would also argue that the properties of a human society are similarly no more than the sums of the individual behaviors and tendencies of the individual humans of which that society is composed. Societies are ‘aggressive’ because the individuals who compose them are ‘aggressive,’ for instance. In formal language, reductionism is the claim that the compositional units of a whole are ontologically prior to the whole that the units comprise. That is, the units and their properties exist before the whole, and there is a chain of causation that runs from the units to the whole.” (Lewontin, Rose, and Kamin 1984: 5).

But in my view the scientists or philosophers who are sometimes accused of being guilty of crude reductionism do not in fact hold that “strong reductionist” viewpoint.

Dawkins, for example, repudiates the type of “strong reductionism” or “precipice reductionism” that seeks to “explain complicated things directly in terms of the smallest parts, even, in some extreme versions of the myth, as the sum of the parts!” (Dawkins 1991: 13; emphasis in original). Instead, Dawkins endorses a “hierarchical reductionism” which recognises that the type of explanations suitable at a lower level are not the same as at higher levels (Dawkins 1991: 13; see also Dawkins 1986; Weinberg 1994).

Steven Pinker elaborates:

“Reductionism, like cholesterol, comes in good and bad forms. Bad reductionism—also called ‘greedy reductionism’ or ‘destructive reductionism’—consists of trying to explain a phenomenon in terms of its smallest or simplest constituents. Greedy reductionism is not a straw man. I know several scientists who believe (or at least say to granting agencies) that we will make breakthroughs in education, conflict resolution, and other social concerns by studying the biophysics of neural membranes or the molecular structure of the synapse. But greedy reductionism is far from the majority view, and it is easy to show why it is wrong. As the philosopher Hilary Putnam has pointed out, even the simple fact that a square peg won’t fit into a round hole cannot be explained in terms of molecules and atoms but only at a higher level of analysis involving rigidity (regardless of what makes the peg rigid) and geometry. And if anyone really thought that sociology or literature or history could be replaced by biology, why stop there? Biology could in turn be ground up into chemistry, and chemistry into physics, leaving one struggling to explain the causes of World War I in terms of electrons and quarks. Even if World War I consisted of nothing but a very, very large number of quarks in a very, very complicated pattern of motion, no insight is gained by describing it that way.

Good reductionism (also called hierarchical reductionism) consists not of replacing one field of knowledge with another but of connecting or unifying them. The building blocks used by one field are put under a microscope by another.” (Pinker 2003: 70).

But the point is that roughly hierarchical processes at each higher level might be understood at different levels of analysis and the lowest one is not necessarily of any use outside its restricted domain, and the higher-level analysis may well be the most important one.

In general, I would argue that, when properly limited to its correct place, “hierarchical reductionism” is no threat to science, the social sciences, and certainly not economics.

In a nice discussion in Debunking Economics (2011), Steve Keen notes how “strong reductionists” in the natural sciences thought that all the sciences could ultimately be reduced to physics (Keen 2011: 206), but this project has failed.

As Keen says,

“Strong reductionism implies that the behaviour of any complex system can be entirely understood by considering the behavior of its constituents, and then summing their effects: ‘the whole is the sum of its parts.’” (Keen 2011: 206).

But when complex systems have multiple nonlinear relations between variables the reality is that properties at the aggregate level can emerge which cannot be found at the lower level of individual components (Keen 2011: 207). The aggregate level phenomena are called “emergent properties” (Keen 2011: 207). Each higher-level science is not just an applied version of the science below it. The rough hierarchy of sciences exists, but

“‘at each higher stage entirely new laws, concepts and generalizations are necessary, requiring inspiration and creativity to just as great a degree as in the previous one. Psychology is not applied biology, nor is biology applied chemistry’” (Keen 2011: 208).

II. Strong Reductionism in Economics
In economics, the same “strong reductionist” method manifests itself in the desire to directly derive the properties of the macroeconomy from microeconomics (Keen 2011: 206). Under the neoclassical view, the whole economy or macroeconomy is just the sum of individual behaviour.

But this is just another instance of the “strong reductionist” fallacy. Macroeconomics is not applied microeconomics.

A case in point:

“despite its adherence to strong reductionism, neoclassical economics provides one of the best examples of emergent phenomena ever: the ‘Sonnenschein-Mantel-Debreu conditions’ … . This research proved that a market demand curve derived from the preferences of individual consumers who in isolation obeyed the Law of Demand – i.e., they had ‘downward-sloping demand curves’ – will not obey the Law of Demand: a market demand curve can have any shape at all.” (Keen 2011: 208).

While I will leave the question of how Austrian economics commits the “strong reductionist” fallacy for another post, one can certainly see it in the patron saint of modern Austrian economics, Ludwig von Mises:

“Society is concerted action, cooperation. Society is the outcome of conscious and purposeful behavior. … The total complex of the mutual relations created by such concerted actions is called society. … But society is nothing but the combination of individuals for cooperative effort. It exists nowhere else than in the actions of individual men. It is a delusion to search for it outside the actions of individuals. To speak of a society’s autonomous and independent existence, of its life, its soul, and its actions is a metaphor which can easily lead to crass errors.” (Mises 1998: 143).

In other words, Mises is just a crude “strong reductionist,” and for him society is just the “sum of its parts”: the “total complex of the mutual relations created by ... concerted actions is called society.” He has no understanding of emergent properties or downward causation.

Curiously, some few Austrians might have grasped the unsoundness of “strong reductionism,” despite (sometimes) protestations to the contrary. Hayek’s “spontaneous order” captures some elements of why greedy reductionism is wrong and how “emergent properties” or “emergent order” can occur in human society.

III. Conclusion
I would conclude that moderate reductionism or “hierarchical reductionism” is not a threat to good social science, nor to heterodox economics. It is “strong reductionism” that is the fallacy and bad science.

Certain scientists accused of “bad reductionism” (as far as I can see) are probably not guilty of it.

And finally the neoclassical attempt to derive macro from microfoundations is bad science.


BIBLIOGRAPHY

Dawkins, Richard. 1986. “Sociobiology: The New Storm in a Teacup,” in S. Rose and L. Appignanesi (eds.), Science and Beyond. Blackwell, Oxford. 61–78.

Dawkins, Richard. 1991. The Blind Watchmaker. Penguin Books, London.

Dennett, Daniel C. 1995. Darwin’s Dangerous Idea: Evolution and the Meanings of Life. Penguin Books, London.

Keen, S. 2011. Debunking Economics: The Naked Emperor of the Social Sciences (rev edn.). Zed Books, New York and London.

King, J. E. 2012. The Microfoundations Delusion: Metaphor and Dogma in the History of Macroeconomics. Edward Elgar, Cheltenham.

Lewontin, Richard C., Rose, Steven and Leon J. Kamin. 1984. Not in Our Genes: Biology, Ideology, and Human Nature. Pantheon Books, New York.

Mises, L. 1998. Human Action: A Treatise on Economics. The Scholar's Edition. Mises Institute, Auburn, Ala.

Pinker, Steven 2003. The Blank Slate: The Modern Denial of Human Nature. Penguin Books, London.

Weinberg, Steven. 1994. Dreams of a Final Theory. Vintage Books, New York.