Rationalism, Theoretical Orthodoxy and Their Legacy in Cost Utility Analysis
journal contributionposted on 06.06.2017 by Richardson, Jeff
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The theme of this paper is that there is a malaise in a significant part of theoretical economics which has adversely affected its character and growth and which has spilled over into applied economics in a particular way; viz by reducing the scope of hypotheses that have been the subject of empirical enquiry and by promoting policies on the basis of their conformity with an established orthodoxy, in preference to policies supported by evidence. The approach to this topic is both historical and epistemological. It is argued that the history of science has been characterised by a struggle between the conflicting paradigms of Rationalism and Empiricism with intellectual progress being broadly determined by the extent to which the latter and not the former has been ascendant. It is argued that the reason for this arises from the epistemological structure of the competing paradigms. While Empiricism leads to a method which encourages the growth of knowledge, Rationalism encourages an ultimately sterile focus upon analytical techniques per se. It is suggested that economic orthodoxy and, more specifically, health economic theory has adopted the form and increasingly the substance of Rationalist paradigm and that the inhibiting influence of this can explain the neglect of a series of issues which arise in Cost Utility Analysis and, more broadly, in economic evaluation; issues which, for a non-economist, would have prima facie candidacy for investigation and for possible inclusion in economic theory. Ten examples are given. It is concluded that the opportunity cost of our adoption of methodological Rationalism in terms of intellectual progress elsewhere and policy prescriptions may have been very high.