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Since the “death of economic methodology” was declared by McCloskey in 1986, the field of methodology in economics has been freed from the pretense that rules can be set for sound economic inquiry. In the ensuing years, the discussion has opened up to address a broader set of questions aimed at an understanding of how economists in fact make decisions in economic research and how, more generally, they think about scientific knowledge (Hands 2001, pp. 6-7).
McCloskey's claim that the free market of economic ideas will decide which theory, concept, or argument is most convincing and therefore best has been important, but it was also criticized for ignoring the role of power, institutional arrangements, and economic support (Strassmann 1993; Garnett 1999; Mirowsky and Sent 2002). Acknowledging social and economic influences on the development of economic science, we argue for a better understanding of how economic theories are formed by addressing the psychological notions embedded, consciously or unconsciously, in the economic theory.
Under the influence of mainstream notions in philosophy of science, many economists continue to believe that “scientific method” helps them overcome their personal values and inhibitions, and to obtain if not the truth, then, as a second-best, value-neutrality, or, as a third-best, scientific status. The claim to value-neutrality seems based more on denial of influences and of the contextual character of economic theorizing than on insight into the contextuality of their research. As Harding (1995) explains, the invocation of value-neutrality means mostly that we are dealing with the underlying assumptions and shared values of economists, rather than with a heightened awareness of how values play a role in economic research.
We suggest that in assessing how economists develop the concept of the economic agent as central to their theories and models, we need to include in our considerations the psychological processes involved in the prod