The core of Logical Positivism was the development of a scientific worldview. Going further than Saint-Simon and Comte, the Logical Positivists declared that only the verifiable propositions of science have meaning: strictly speaking, religion, metaphysics and morality are nonsense. In philosophy, in the writings of the early Wittgenstein, this doctrine reappeared as a mystical theory of the limits of language. In social science, it boosted the aspirations of economics to be a rigorous discipline on a par with physics and mathematics. …
None of the classical economists believed that mathematics should be the model for social science. For Adam Smith and Adam Ferguson, economics was grounded in history. It was bound up inextricably with the rise and decline of nations and the struggle for power between different social groups. For Smith and Ferguson, economic life can only be understood by examining these historical developments. In a different way, the same is true of Marx. Since the rise of Positivism in the social sciences this tradition has practically disappeared.
The decoupling of economics from history has led to a pervasive unrealism in the discipline. The classical economists knew that the laws of the market are only distillations from human behavior. As such, they have the limitations of all types of human knowledge. History demonstrates a good deal of regularity in human behavior. It also shows enough variety to make the search for universal laws a vain enterprise. It is doubtful if the various forms of social studies contain a single law on a par with those of the physical sciences. Yet in recent times the ‘laws of economics’ have been invoked to support the idea that one style of behavior—the ‘free market’ variety found intermittently over the past few centuries in a handful of countries—should be the model for economic life everywhere.
Economic theory cannot show that the free market is the best type of economic system. The idea that free markets are the most efficient mode of economic life is one of the intellectual pillars of the campaign for a global free market; but there are many ways of defining efficiency, none of them value-free. For the Positivists, the efficiency of an economy was measured in terms of its productivity. Certainly the free market is highly productive. But as Saint-Simon and Comte understood very well, that does not mean it is humanly fulfilling.
The idea that the free market should be universal makes sense only if you accept a certain philosophy of history. Under the impact of Logical Positivism, economics has developed into a thoroughly unhistorical discipline. At the same time, it has imbibed a philosophy of history that derives from Saint-Simon and Comte.
According to Positivism, science is the motor of historical change. New technology drives out inefficient modes of production and engenders new forms of social life. This process is at work throughout history. Its end-point is a world unified by a single economic system. The ultimate result of scientific knowledge is a universal civilization, governed by a secular, ‘terrestrial,’ morality.
For Saint-Simon and Comte, technology meant railways and canals. For Lenin it meant electricity. For neo-liberals it means the internet. The message is the same. Technology—the practical application of scientific knowledge—produces a convergence in values. This is the central modern myth, which the Positivists propagated and everyone today accepts as fact.