The Review of Austrian Economics, 18:1, 83–108, 2005.
2005 Springer Science + Business Media, Inc. Manufactured in The Netherlands.
Boettke, The Austrian School and the Reclamation
of Reality in Modern Economics
PAUL LEWIS email@example.com
Faculty of Economics and Politics, Faculty of Social and Political Sciences, and Selwyn College, Cambridge
Abstract. In a series of recent papers, the prominent Austrian economist Peter Boettke has criticised orthodox
economics for its lack of realism. This paper situates Boettke’s critique in the context provided by recent devel-
opments in the methodology of economics, most notably critical realism. While there is a good deal of common
ground between Boettke’s approach and critical realism, the latter also helps to reveal some of the limitations of
the variant of Austrian economics to which Boettke subscribes. Suggestions are made as to how critical realists
and Austrians such as Boettke might move forward together in developing a more realistic, relevant and fruitful
approach to economic analysis.
KeyWords: Austrian economics, ontology, realism, power
JEL classiﬁcation: B0, B2, B4.
‘No reality, please. We’re economists!’ This phrase, taken from a recent edition of the edu-
cation supplement of The Times newspaper, encapsulates a widely held belief that modern
academic economics has become increasingly detached from the real world.
of economics, so its detractors maintain, is dominated by exercises in formal modelling that
are designed more to showcase the technical virtuosity of economists than to illuminate
pressing economic problems.
Avariant of this line of argument has recently been developed in a number of papers
written by the prominent Austrian economist Peter Boettke.
At the heart of Boettke’s
critique lies the claim that the tools utilised by orthodox economists—notably formal
mathematical modelling—are unsuitable for the analysis of the socio-economic world.
For Boettke, the language of mathematics constitutes a Procrustean bed that is unable to
do justice to many of the essential features of socio-economic reality, the consequence
of which is that formal mathematical models are so far divorced from the realities of
socio-economic life that they unable to address, let alone provide answers to, many of the
questions that have traditionally been regarded as central to economics. Only if economists
tailor their methods more closely to the nature of their subject-matter—in particular by
displaying a greater willingness to express their theories discursively, in natural language,
as opposed to the mathematical language of formal modelling—will the realities of eco-
nomic life be re-engaged and the discipline be in a position once again to make signiﬁcant