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Getting beyond objectivism

The philosophical hermeneutics of Gadamer and Ricoeur

G.B.Madison

INTRODUCTION

The most significant development in the philosophy of the human sciences in the last two decades or so has been the movement away from the previously dominant positivistic or objectivistic approach.1 This postpositivist turn is one which an increasing number of authors have come to be concerned with and have described in various ways. Richard Rorty (1979) has labelled it the move from ‘epistemology’ to ‘hermeneutics’. In a useful collection of essays on the subject, Rabinow and Sullivan have referred to it as ‘the interpretive turn’.2 What ‘the interpretive or hermeneutic approach’ (Rabinow and Sullivan 1979, p. 1) stands for is a rejection of what Lewis White Beck (1971 [1949]) referred to as ‘the Natural Science Ideal’—the idea espoused by the logical positivists of a ‘unified science’ embracing both the natural and the human sciences. The interpretive approach rejects this sort of methodological imperialism; it rejects the idea that the human sciences can or ought to be modelled on the natural sciences. It rejects the very idea that the purpose of the human sciences is to explain (in the customary scientistic sense) and predict human phenomena. Because the principal goal of the human sciences is not to explain human affairs but to understand them, formal scientific methodology and quantification techniques are ill-suited to these disciplines, having at best a strictly limited usefulness. What, above all, is called into question is the applicability to human affairs of the sub-human reductionist models (such as those borrowed from genetics or cybernetics) that objectivistic scientists are so fond of. The two leading exponents of the hermeneutical approach have been Hans-Georg Gadamer and Paul Ricoeur.

HERMENEUTICS

In this essay I would like to explore some of the implications of the hermeneutical critique of objectivism as they pertain to economics, which has traditionally been held to be the ‘queen’ of the social sciences, the one most approximating to the exactitude which is thought to characterize the

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‘hard’ sciences. The prime area where one might discern some significance of hermeneutics for economics is that of methodology. The issue of methodology is in the forefront of a great deal of discussion in all of the human sciences today,3 and it is one which is increasingly occupying the attention of economists. As a consequence of what appears to be something of a loss of confidence in mainstream neoclassical economics, economists are once again reflecting on the status of their discipline: on what in their intellectual praxis they have been doing; on what they ought to be doing; and on the significance of what as economists they are and ought to be doing. The emergence of some new economic journals that stress methodology is a case in point.

Symptomatic of this concern—but also of economists’ inability to free themselves from positivism’s grip—is a New York Times article by John M. Culbertson, professor of economics at the University of Wisconsin, ‘American economics: 100 years in a rut’. This author laments the present state of economics, which he sees as not being ‘scientific’ enough. What he would like to see is the institution of ‘a realistic, scientific economics’, an economics which, he says, ‘underlay the anti-laissez-faire economic reforms of the 1930s, which were a foundation of the era of great success of the United States economy’. The trouble with present-day economics, it appears, is its ‘unscientific’ commitment to the philosophy of the free market—to what Culbertson refers to as ‘the prescientific doctrines of Adam Smith’. Implicitly raising the question, ‘What Should Economists Do?’ (to quote the title of a noteworthy book by James Buchanan, which I rather doubt Culbertson has read), our author says in effect that they should firmly hitch their economic cart to ‘empirical, objective, postDarwinian science’.4

Whatever might be said of Culbertson’s article in other respects, it is in any event symptomatic of a growing concern on the part of economists as to the status of their discipline—an expression of the awareness that, as Ludwig M. Lachmann would say, ‘a crisis of the method of economic thinking is taking shape’ and that economics is entering ‘a tempestuous season’ (Lachmann 1986). Culbertson is also fully representative of a standard response to concerns over what might be called the ‘epistemological’ status of economics, one which we find repeated ad nauseum not only in past economic literature but also in that of the other social sciences. Economics could be put on a solid scientific footing if only it were made somehow to imitate the natural sciences. In other words, Culbertson’s article is yet another restatement of the Natural Science Ideal, the idea that the natural sciences exemplify knowledge in the truest sense and that all other disciplines can achieve intellectual rigour only to the degree that they can successfully transpose the methods of the natural sciences into their own domains. Let us simply label this the Positivist Ideal.

The trouble with this kind of call for intellectual rigour is that it is not nearly rigorous enough. On the one hand it naïvely accepts positivistic myths as to what natural science is (such as the ‘empirical’ status of scientific statements; the notion that scientific theories are accepted because they are or can be tested or

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verified; and so on). On the other hand, it does not raise any critical questions as to what the object of economics is or ought to be. I will not pursue the first difficulty, since, in the philosophy of science itself, we have now moved into a post-positivistic period—thanks to Thomas Kuhn’s hermeneutical researches into science and the growth of knowledge literature—and now are able to see through the positivist myths about science. The real trouble with the natural-science-ideal position, as regards economics, is that it does not even pause to ask what would seem to me to be the crucial (indeed, the absolutely basic) question, if we are concerned with methodology in economics. The question is, quite simply: What is the nature of economic understanding?

To raise this question is to raise a properly hermeneutical question. For hermeneutics is concerned with the nature and scope of human understanding, in all its different modes. For the purposes of the present discussion I will define philosophical hermeneutics as that reflective discipline which is concerned with, in Gadamer’s words, ‘our entire understanding of the world and thus…all the various forms in which this understanding manifests itself’ (Gadamer 1975, p. xviii). Defined thus, it follows logically that hermeneutics does indeed have implications for economics. Although Gadamer has repeatedly insisted that it was not his aim to lay down methodological criteria, his general theory of human understanding does have definite methodological implications;5 and Ricoeur, for one, has deliberately sought to address some of the methodological problems in the human disciplines.

Before attempting to discern some of the implications of hermeneutics for economics, let us pause to take note of some of Gadamer’s main contributions to overall hermeneutical theory.

GADAMER’S CRITIQUE OF OBJECTIVISM

Let us begin by noting Gadamer’s most basic and decisive contribution. Hermeneutics, in one form or another, is a very ancient discipline, also one which was always more or less marginal in that it was concerned with an apparently very specialized topic: the right reading of texts. Thus there is a long tradition of biblical and juridical hermeneutics. Around the turn of the century Wilhelm Dilthey widened the scope of hermeneutics considerably when he proclaimed that the hermeneutical method of understanding (Verstehen)—as opposed to the scientific method of explanation (Erklärung)—should be the method of all the human or social sciences (Geisteswissenschaften). What Gadamer did, building on insights of the early Heidegger, was to completely deregionalize, so to speak, hermeneutics. That is, with Gadamer hermeneutics ceased to be simply a method to be practised by this or that discipline and became a discipline in its own right. It became an all-inclusive discipline because its object became, as I indicated above, human understanding itself, in all its forms. In other words, Gadamerian hermeneutics does not advocate any particular method of understanding and does not itself fall under the rubric of

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‘methodology’.6 It is, rather, a discipline having universal scope in that it is concerned with ‘all human experience of the world and human living’ (Gadamer 1975, p. xviii). Gadamer’s goal was ‘to discover what is common to all modes of understanding’ (1975, p. xix). The question he sought to raise was a genuinely philosophical one: ‘How is understanding possible?’ (1975, p. xviii). Or, in a less Kantian fashion: What exactly is it that has happened whenever we claim to have arrived at an understanding of things, the world, our products, ourselves?

Gadamer thus inaugurated a wholly new form of hermeneutics—one which could be labelled ‘philosophical’ or ‘phenomenological’—and which stands opposed, by reason of its philosophic universality, to the older, romantic version of hermeneutics running from Schleiermacher and Dilthey up through Betti and Hirsch.7 What makes a decisive difference between these two forms of hermeneutics is that Gadamerian hermeneutics is not just another kind of epistemological theory. What is decisive about Gadamerian hermeneutics is that it abandons epistemology and traditional epistemological and foundationalist concerns altogether. It does not, for instance, seek to come up with new answers to the old epistemological questions, ‘How can we be sure that our ideas are an adequate copy of objective reality?’, ‘What must, or can we do, to achieve this result?’. It seeks rather to deconstruct these and similar theory-laden questions. Hermeneutics is a discipline which completely displaces traditional, foundationalist epistemology. As Rorty (1979, p. 357) has quite rightly observed, hermeneutics, ‘as a polemical term in contemporary philosophy’, is a name for the attempt to set aside epistemologically centred philosophy.

The consequences of this basic shift in perspective are extremely numerous and extremely far-reaching. I will allude to just a few, in very summary form, and will then focus in on more specifically economic concerns.

Understanding, in whatever form (including the forms in which it occurs in the natural sciences), is not a matter of conforming to, copying, or mirroring a supposedly ‘objective’ nature which simply is what it is ‘in itself’ apart from our having anything to do with it (the conception of reality operative in objectivistic, foundationalist thinking). Understanding is not representational but transformative. To understand is to interpret.

Objectivism is a methodological naïvety. Objectivism could be defined as the attempt to achieve ‘science’ through the elimination of all ‘subjective’ factors (it thus presupposes the mirror conception of human understanding—the ‘scientist’ is he who seeks to have a very polished, non-distorting mirror for a mind). It presupposes (as in Hirsch’s brand of hermeneutics) that the ‘truth’ is something ‘out there’, atemporal, invariant, which

merely has to be ‘discovered’. When applied to what is specifically human (such as consciousness, self-identity, economic transactions), it is the reductionist attempt to explain the human in purely ‘objective’,

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‘natural’, physicalistic terms (as in Skinnerian behavioural psychology or cybernetic accounts of the ‘mind’).

There are no ‘facts in themselves’ (as we have now come to realize in the philosophy of science, all facts are ‘theory-laden’). Facts are products of interpretation.

Whether it is texts or actions of people that we are trying to understand, there is no such thing as a ‘correct’ or best interpretation of them (no ‘validation’, in Hirsch’s positivistic sense). Which is not to say that some interpretations may not be better (more persusasive, rational) than others (the hermeneutical rejection of objectivism and foundationalism does not entail relativism).

All understanding or knowledge is inter-subjective (it is not something purely individual and ‘subjective’). The ‘objective’ is the inter-subjectively agreed upon, the result of agreement reached through conversation and dialogue on the part of a community of historically formed and culturally embedded subjects.

SUBJECTIVISM AND METHODOLOGICAL

INDIVIDUALISM

Let us now focus our hermeneutical attention on economics. If as hermeneuticists our prime concern is the nature of economic understanding, we must make clear to ourselves just exactly what, in economics, we are trying to understand with our various methodological constructs. This is a most important methodological point which Aristotle made long ago when in his Nicomachean Ethics (see 1094a25 and elsewhere), he said that every science should adapt its method to its object, that the object under study should determine the method of studying it. Unfortunately, this bit of sound advice often goes unheeded. It is very likely to be ignored when in a precipitous attempt to make economics a ‘positive science’ one casts about for a suitable natural science model. Physics is not a very good model, since economic phenomena do not readily lend themselves to experimentation. But one can always appeal to astronomy, which is unquestionably a science even though it too cannot make use of experiments.8 The manipulation of statistics (by means now of sophisticated computersimulation models) would seem to be the answer to the would-be scientific economist. Do not statistics provide the economist with the hard-core, ‘valuefree’, ‘objective’ data he needs if he is to be a positive scientist? And do not computer models furnish him with a rigorous method of attaining mathematical exactitude, and thus the means of ‘predicting and controlling’ events?

But what are statistics? Are they objective, natural data, as in the case of meteorological phenomena? Certainly not. They are not natural givens but are rather the result of classifying and organizing the results of human action. They are not ‘facts’ at all; they are interpretations of facts, facts having to do not with the ‘objective’ (nature) but with the ‘subjective’ (human action).9 The real object

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of economics is human reality, human interactions, transactions, market processes. Humans, hermeneutics insists, are not objects but subjects, purposive beings—which is to say that they are not properly understood if they are understood merely objectivistically. The implication of hermeneutics for economics would be that, whatever use it might make of objective measuring techniques, if it is to do justice to its object economics must understand ‘explanation’ as fundamentally a matter of ‘interpretation’.

Even though present-day economics relies heavily on the mathematical manipulation of supposedly objective statistics and continues to aspire to the status of a ‘positive’ science of ‘objective’ reality, economics was, ironically enough, one of the first of the social sciences to make an important break with objectivism. I am referring to the subjective theory of value based on the principle of marginal utility which presides over the birth of neoclassical economics. As early as 1871, Carl Menger, simultaneously with Leon Walras and William Stanley Jevons, rejected the classical notion that the value of a thing is something ‘objective’, an intrinsic property of the good itself; in doing so they established the basis of modern value theory. Value is the expression of preferences on the part of individual subjects, of the satisfaction they expect to derive from the incremental use of goods.

Menger’s ‘subjectivist’ approach has become a distinguishing mark of the Austrian school. As further developed by one of Menger’s most famous followers, Ludwig von Mises, subjectivism furnishes additional points of convergence between economics and hermeneutics. The gist of Mises’s approach is that economic phenomena, such as interest rates, cannot be explained in terms of mere objective, physical conditions or factors. Under the influence of one of Gadamer’s own teachers and the founder of phenomenology, Edmund Husserl, Mises understood time, the key element in interest, not in empirical terms but, non-objectivistically, as a dimension of human action, in terms of timeconsciousness (see Mises 1963, pp. 488 ff). What is important for economic understanding is not Böhm-Bawerk’s notion of the ‘average period of production’ which Mises said, is ‘an empty concept’ but the time-preference of individuals; economic phenomena must be understood in terms of forwardlooking decisions on the part of individual producers and consumers. This approach to economics, like phenomenological hermeneutics, is thus thoroughly anti-reductionistic; economics has to do not with the natural but with the human, and what is human cannot be understood in terms of mere physical, objective processes.10

For his part, Lachmann provides us with an alternative to the usual mechanistic neoclassical models or what he calls ‘late classical formalism’ by suggesting that the goal of economic inquiry is intelligibility rather than causal explanation. This is a properly hermeneutical move. It suggests to me that what distinguishes economics from other disciplines, such as history, is not its object per se, since, viewed hermeneutically, the goal of all of these sciences would be the attempt to discern meaningful patterns of relations in human endeavours and