The Death of (the Philosophy of) Economics

A Revolution is Underway

Very short summary: This essay reflects on Tyler Cowen’s account of the decline of marginalism in contemporary economics and discusses the implications for field of philosophy of economics. I contend that the philosophy of economics has yet to properly account for the computational revolution that is transforming the discipline. Not only might that take time, but the diminishing importance of economic reasoning and theory may also entail a radical transformation of the philosophy of economics into something like a “philosophy of computation.”

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Tyler Cowen’s recent self-published ebook on the rise and decline of marginal economics has generated a substantial number of responses, including on Substack. Most of the discussions focus on the fourth and last chapter , which documents the progressive disappearance of marginalism in contemporary economics across all relevant dimensions: the problems posed, the conceptual and theoretical frameworks employed, and the methods and reasoning used. Actually, Cowen’s account is far more than a decline of marginalism ; it charts a broader “computational revolution” that has been underway for almost two decades and is radically transforming the field.

Cowen mostly discusses the fate of Chicago-style price theory because he—reasonably—contends it is the most direct descendant of marginalist concepts and reasoning. Besides the fact that price theory has progressively disappeared from the curricula of major economic programs in U.S. universities, Cowen notes that young scholars arriving on the academic job market tend to display a lack of understanding of (or interest in) price-theoretic reasoning. The declining status of price theory is, however, only the tip of the iceberg. Theoretical economics as a whole—including axiomatic microeconomics and social choice theory—has been in retreat. There are still important works produced in these fields, but they are essentially confined to specialized outlets and rarely appear in top-ranked generalist journals (AER, QJE, Econometrica, …). They no longer drive the discipline or receive the accolades. There are few, if any, pure theoreticians among the contemporary leading economists.

This is not completely new. The “empirical turn” of economics has been well documented for quite a while now. It is explained by a conjunction of factors: the low- hanging fruit of economic theory has largely been picked, access to large datasets has been democratized, and computational power has been exponentially increasing. These factors have contributed to raising the opportunity costs of theoretical innovation to such a level that it now hardly pays off for junior economists to specialize in theoretical economics. However, what Cowen is describing is more than that. He’s describing a process whereby economists are progressively forgetting the marginalist roots of their discipline, roots that are still taught in introductory economics classes. It is a process in which economists are substituting machine-learning methods to build incredibly complex models (up to 360,000 factors, as Cowen documents) for economic—marginalist— reasoning based on basic concepts such as supply and demand and opportunity cost. In a way, we seem to be back to the old “measurement without theory” debate of the 1940s, but in a radically different context with more access to data and more computing power.

In a response to Cowen, Brian Albrecht argues that price theory and economic reasoning still play a role in economic research, but at a more upstream stage. The identification of interesting questions, the way they are framed, and the hypotheses advanced still reflect a particular conceptual framework that drives the use of powerful computational tools. He’s also right to point out, echoing Lynne Kiesling, that economic reasoning itself indicates that with AI, the scarce and therefore most valuable input is “judgment,” i.e., “The ability to decide what’s worth studying, which mechanism is first-order, which assumptions are plausible, which results travel across contexts.” I’m sympathetic to this view and I would like to believe that it is true. But it may underestimate the nature of the ongoing change. As Cowen points out, fewer and fewer economists have received a properly economic education. At some point, this will be reflected in the way economics is taught – will there still be intermediate microeconomics classes in leading economics programs in 20 or 30 years? Judgment will still be valuable, maybe more than ever, but not necessarily the kind of “marginalist” judgment that has given economics its identity as a discipline for more than a century. Ironically, economic reasoning may be more central in other disciplines and curricula, such as political science or the widely popular “Philosophy, Politics, and Economics” programs.[1]

So, what is the identity of contemporary economics without its marginalist roots? Cowen provokingly (?) answers

“The dirty little secret is that what distinguishes economics as a field, right now, is a mix of higher standards, harder work, better math, and higher IQs. That is the real (dare I say marginal?) contribution of “empirical economics today,” not marginalism per se, though of course contemporary models typically are consistent with marginalist reasoning.”

This claim expresses a new form of economic imperialism, one that emphasizes the intellectual rather than methodological superiority of the discipline. It is not substantiated, and I doubt it can be. To assess it and eventually provide an alternative answer would be the job of what is nowadays called the “philosophy of economics,” a field at the intersection of economics and philosophy whose job is (at least partly) to philosophically account for economists’ practices. The decline of marginalism and the unprecedented computational revolution that accounts for it are incredibly significant for philosophers of economics.

“The Human Condition,” René Magritte (1933)

For quite some time now, I have had the intuition, however, that we (as I count myself as a member of this community) are failing to address the radical transformation of the economic discipline. This intuition is strengthened by the recent publication of a paper in the Journal of Economic Methodology by François Claveau, Jacob Hamel-Mottiez, Alexandre Truc, and Conrad Heilman.[2] Claveau et al. conduct a bibliometric analysis providing evidence of the “estrangement” between the philosophy of economics and economics. Looking at research articles published in the Journal of Economic Methodology (JEM, one of the top outlets in the philosophy of economics field) between 1994 and 2021 and comparing them with publication patterns in economics over the same period, they establish four results (I’m quoting the abstract): 1) the share of economic citations in JEM has been decreasing; 2) the economic citations in JEM are increasingly older relative to citation patterns within economics; 3) the profile of economic citations in JEM articles is increasingly dissimilar compared to what is cited within economics, and 4) there is decreasing diversity in the share of attention to different economic subfields in the articles published in the JEM when compared to economics.

These results are not specific to the JEM and also apply to other philosophy of economics outlets. They indicate that, as a field, the philosophy of economics is becoming increasingly insulated from what economists are actually doing. The fourth result is especially striking:[3]

The data suggest a huge overrepresentation of the history of economics and behavioral economics in the JEM compared to the importance of these subfields in economics. Other subfields/topics are almost completely ignored by philosophers of economics, such as climate or money and finance.

Though Claveau et al.’s bibliometric analysis doesn’t directly address the issue, we may suspect that the estrangement between the philosophy of economics and economics is not only due to differing views about the relative importance of subfields and topics but is at least partially explained by the fact that philosophers of economics have yet to fully integrate the computational revolution and its implications. This is, in a way, not surprising. The philosophical analysis of any science cannot proceed simultaneously with the evolution of this science, especially if the changes are taking place at a fast pace. Minimal historical hindsight is needed. Also, philosophers of economics are, for the most part, not trained in the advanced computational techniques that economists are now routinely using, clearly a prerequisite to understanding, explaining, and assessing what economists are doing.

The growing discrepancy between economics and the philosophy of economics may not last forever and may even not be a problem. Claveau et al. cautiously advance the principle of what they call “philosophical primacy,” according to which “not all scientific developments merit the same degree of philosophical attention.” This principle may justify the philosophical study of a discipline not mirror the discipline in question. However, if Cowen is right, there is no way that philosophers of economics can ignore the ongoing revolution that is leading to the demise of marginalism.

Now, as the theoretical content of economics is slowly fading away, making room for a never-ending increase in computational sophistication and arcane technical debates, philosophers of economics may also find it harder to offer a valuable philosophical perspective that reflects something distinctive about economic reasoning and methods. Or maybe the philosophy of economics will progressively turn into something like a “philosophy of computation.” In any case, economics is changing radically, and that will probably affect the very nature of the philosophy of economics. The decline of marginalism may also signal the decline of the philosophy of economics or its radical transformation.

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[1] Gerald Gaus and John Thrasher’s PPE textbook is basically economic theory applied to politics and political philosophy. Gerald Gaus and John Thrasher, Philosophy, Politics, and Economics: An Introduction (Princeton University Press, 2021).

[2] François Claveau et al., “Evidence for Estrangement between Philosophy of Economics and Economics,” Journal of Economic Methodology 0, no. 0 (2025): 1–17. Disclaimer: I am an associate editor of the Journal of Economic Methodology.

[3] Source: Claveau et al., “Evidence for Estrangement between Philosophy of Economics and Economics.”