The Microfoundations Delusion

Metaphor and Dogma in the History of Macroeconomics

J.E. King, Emeritus Professor, La Trobe University, Australia and Honorary Professor, Federation University Australia

In this challenging book, John King makes a sustained and comprehensive attack on the dogma that macroeconomic theory must have ‘rigorous microfoundations’. He draws on both the philosophy of science and the history of economic thought to demonstrate the dangers of foundational metaphors and the defects of micro-reduction as a methodological principle. Strong criticism of the microfoundations dogma is documented in great detail, from some mainstream and many heterodox economists and also from economic methodologists, social theorists and evolutionary biologists. The author argues for the relative autonomy of macroeconomics as a distinct ‘special science’, cooperating with but most definitely not reducible to microeconomics.

‘King’s book, apart from its rather contentious conclusion that there is no inherent hierarchy between micro and macro, covers, every issue relevant to the debate majestically and in great detail. It is this reviewer’s sense that, should the profession choose to engage with this book in a substantial and sustained way, these methodological questions which have lurked underneath the surface of economic discourse since at least Keynes’s time can finally and once and for all be resolved.’
——菲利普·皮尔金顿Keyn审查esian Economics

‘This excellent book documents the creation of what has become the first commandment of orthodox macroeconomics: that microeconomic theory provides its foundation because this is the most secure form of economic knowledge. By contrast, John King shows conclusively that microeconomics cannot play such a role when assessed by the criteria of logic, or of science, or of economics itself. Indeed, he goes further and demonstrates that the microfoundations dogma detracts from knowledge about how economies actually operate, and instead generates patently false conclusions. Moreover, the dogma is shown to have blinded orthodox economists from even seeing the possibility of typical macroeconomic crises, and has disarmed them in formulating policies that would eliminate actual crises. The book therefore deals with a topic at the very heart of the present debacle in the world economy.’
– Michael Howard, University of Waterloo, Canada

‘A generation ago Dudley Dillard wrote a famous article on the “barter illusion in classical and neoclassical economics”. Now John King has gone a step further and written about the microfoundations delusion. The illusion has been with us for a very long time, the delusion is of more recent vintage. Together they have blocked a basic understanding of macroeconomic and monetary phenomena at a time when they are most urgently needed. This is a book that had to be written, and we are fortunate that it is John King who has written it. Essential reading for our times.’
– John Smithin, York University, Canada

‘This book is a fine guide to an extremely large and not altogether straightforward literature. It would be a useful supplementary text to courses in methodology, modern macroeconomics and Post-Keynesian economics.’
– Gary Mongiovi, History of Economics Review

‘John King certainly brings new elements to the discussion on microfoun-dations and its history (or histories?). He proposes a careful bird’s-eye view that is welcoming to those interested in the topic, and he explores similar en-terprises in other social sciences.’
– History of Economic Ideas