The Review of Austrian Economics, 17:4, 453–455, 2004.
2004 Kluwer Academic Publishers. Manufactured in The Netherlands.
Allen Oakley (2002) Reconstructing Economic Theory: The Problem of Human Agency.
Cheltenham, UK and Northampton, MA, USA: Edward Elgar. 234+xi, ISBN: 1 84064
Allen Oakley’s book is intended as a contribution to the recent ‘ontological turn’ in the
methodology of economics (Lewis 2005). Oakley focuses on the ontological commitments
of economic theories, that is, on what they presuppose about the nature of the socio-economic
world in general and about the nature of human agency in particular. This emphasis on
ontological issues reﬂects the fact that Oakley’s preferred methodology of economics is
realist in orientation, being grounded in the claim that the analysis of socio-economic
affairs is most likely to be fruitful if it is based on analytical tools which are tailored to suit
the nature of the socio-economic material under investigation.
Oakley argues in chapter 1 of the book that mainstream economics’ a priori methodolog-
ical commitment to formal modelling precludes a satisfactory understanding of economic
phenomena. Oakley shares with contemporary Austrians such as Boettke (1996) the view
the analytical framework provided by formal modelling constitutes a Procrustean bed which
excludes essential features of socio-economic life, most notably the fact (well known to
Austrians since Menger) that socio-economic phenomena are the product of subjective
human action. Orthodox economists portray people as undersocialised automatons whose
behaviour is simply a mechanical response to their external environment, a palpably unreal-
istic picture which obscures the signiﬁcance for socio-economic affairs not only of genuine
choice but also of radical uncertainty, real time and social institutions. For Oakley, then,
a satisfactory understanding of socio-economic phenomena demands that economists dis-
pense with their scientistic commitment to the mathematical language of formal modelling
in favour of expressing their theories discursively, in natural language, for it only by doing
so that economists will be able to do justice to the origins of socio-economic phenomena
in human action (cf. Boettke 1996).
Oakley argues that the construction of a more realistic and so more fruitful account of
(the nature of) human action will require scholars to draw both on the ideas of subjectivist
economists and also on the work of philosophers and social theorists. To this end, Oakley
surveys the ideas of an eclectic band of scholars, encompassing Alfred Schutz (whose
writings are examined in chapters 2 and 3), Karl Popper (whose methodology of situational
analysis is outlined in chapter 4), and economists George Shackle and Herbert Simon (whose
ideas are considered in chapters 5–7 and 8 respectively). Oakley’s objective is to glean from
the writings of the scholar in question insights into the conceptual framework required to
develop a fully-ﬂedged subjectivist theory of human agency. The account of human action
in which Oakley’s reﬂections culminate—‘situational analysis’—is outlined in the ﬁnal
chapter of the book. It portrays people as social beings who act purposefully in the face