False Prophets of Economics Imperialism: The Limits of Mathematical Market Models

Jacket Blurb: 'This book studies the methodological revolution that has resulted in economists' mathematical market models being exported across the social sciences. The ensuing process of economics imperialism has struck fear into subject specialists worried that their disciplinary knowledge will subsequently count for less. Yet even though mathematical market models facilitate important abstract thought experiments, they are no substitute for carefully contextualized empirical investigations of real social phenomena. The two exist on completely different ontological planes, producing very different types of explanation.

In this deeply researched and wide-ranging intellectual history, Matthew Watson surveys the evolution of modern economics and its modelling methodology. With its origins in Jevons and Robbins and its culmination in Samuelson, Arrow and Debreu, he charts the escape from reality that has allowed economists' hypothetical models to speak to increasingly self-referential mathematical truths. These are shown to perform badly as social truths related to the world of directly lived experiences.

The book is a formidable analysis of the epistemic limitations of modern-day economics and marks a significant counter to its methodology's encroachment across the wider social sciences.'

Endorsements:

'The most thorough and persuasive account that exists of the origins of the cognitive authority of modern economics - and the sometimes rather tenuous claims on which that authority rests. A brilliant achievement that could really only have been written by Matthew Watson but which we can all learn from.' - Professor Colin Hay, Sciences Po, Paris

'False Prophets of Economics Imperialism is a tour de force! It challenges the economics orthodoxy with sharp interrogations, multidisciplinary insights and careful and robust analysis of the history of the dismal science and its dominance of our academic and policy worlds today. This authoritative book should be read by anyone interested in how mathematical modelling came to rule the roost in economic thinking and policymaking, and why this should not be the case.' - Professor Shirin Rai, SOAS, London

'In this brilliant book, Matthew Watson reveals how economics transformed itself into the imperialist discipline that it has become today. He charts how, as economists became increasingly preoccupied with mathematical rigour, the field changed from being a study of the real economy to 'a science of choice' ... This study demonstrates the ironic path through which economics had to make itself increasingly uneconomic in order to become the discipline that sought to treat every other field through the lens of the market.' - Professor Jacqueline Best, University of Ottawa, Ontario.

False Prophets of Economics Imperialism was included in the Alternative Summer Reading ListLink opens in a new window for 2024, as compiled by the Diversifying and Decolonising Economics group.

On March 18th 2025, I delivered a presentation on my new book to the International Political Economy Research Group in the Department of Politics and International Relations at the University of Edinburgh. The talk was entitled, 'From Edinburgh to Chicago, Maxwell to Stigler: Reconstructing the Pre-History of Contemporary Economics Imperialism', and it was based on some of the key analytical insights from my recent book, False Prophets of Economics ImperialismLink opens in a new window. A recording was made of the presentation, and I can pass this on if you ask me for it.

Abstract: The epistemic value of hypothetical mathematical models lies in the thought experiments they permit. The Edinburgh alumnus James Clerk Maxwell has acquired legendary status in the world of physics for the way in which he used Lagrangian functions to unify the explanations of electricity, magnetism and light under the same system of fundamental equations. This occurred long before experiments in the 1880s showed that there was causal content to match the explanatory content. The Chicago alumnus George Stigler was the first of many economists since the 1980s to make an analogous claim that every aspect of social life could be explained in the same way using price-theoretical equations that were already commonplace within economics. Stigler’s programme of scientific unification, though, has fared markedly less well than Maxwell’s. It has faced challenge and contestation at every turn, and the scepticism of the social scientific community shows no signs of abating, however much the advocates of economics imperialism turn up the volume. My multidimensional pre-history of the contemporary economics imperialism phenomenon shows why the original claims were never as strong as they were made out to be. There is still epistemic merit to be found in even the most abstract of mathematical market models, because it forces us to place that particular way of thinking into dialogue with others that require models to display greater affinity to the world as it might actually be experienced. Maxwell benefited from others posthumously closing the gap between the two through successful observation-based experimentation, but those who have followed Stigler have muddied the waters by acting as if the solution to a system of equations can substitute directly for context-sensitive empirical findings. The book’s excursions into the history of science, the history of scientific modelling, the history of mathematics and the history of metamathematics reveal the shaky foundations on which this supposed equivalence is based. Moreover, detailed study of the history of economic thought shows that those economists whose work is most synonymous with deepening the mathematical features of abstract market models almost always knew as much. The pre-history of economics imperialism was full of moments when mathematical pioneers in economics stopped themselves from following the path that later generations of economics imperialists chose to follow.ink opensLink opens in a new window

On February 19th 2025 I delivered a presentation on my new book to my own department at the University of Warwick. The talk was entitled, 'Policing the Epistemic Line between Uses and Abuses of Mathematical Market Models', and it was based on some of the key analytical insights from my recent book, False Prophets of Economics ImperialismLink opens in a new window. I ran through a number of arguments about the multi-dimensional nature of economics imperialism as I see it, exploring the difference between treating mathematical market models only as a gateway for thought experiments and assuming that the solution to the system of equations on which mathematical market models are based itself contains empirical content. The former would seem to be where the acceptable limits of the use of mathematical market models within the social sciences are positioned in an epistemic sense, whereas the latter is much more questionable. All instances of economics imperialism are founded on an ontological transposition, through which a social phenomenon is stripped of its context-specific meaning so that it can be reimagined as a market pricing problem. Some very notable thought experiments have been facilitated in this way, so it is by no means an illegitimate epistemic move in its own right. However, it is often then claimed that the logical working through of the implications of adopting certain mathematical structures produces findings that are the functional equivalent of carefully considered and context specific fieldwork which attempts to tease out the contingencies of any social situation. By engaging in an epistemological reordering of this nature, the most vocal economics imperialists are able to say that if there is no difference epistemically between these two types of argument, then the findings from their purely mathematical objects can displace all alternative ways of conducting social science research. Neither of these, however, is a valid claim.

On January 9th 2025 I delivered a paper to the Political Economy Seminar Series in the Department of Politics and International Studies at the School of Oriental and African Studies in London. The paper was called, 'Intellectual Border Transgressions in a World of Economics Imperialism: The Epistemic Limits of Mathematical Market Models as Social Science Explanations'. More generally, I spoke about my new book, False Prophets of Economics ImperialismLink opens in a new window, concentrating in particular on the epistemic trespassing that is involved in treating non-market social relations as if they map neatly onto the terrain of mathematical market models.

On November 28th 2024 I delivered a paper to the Department of Political Economy Seminar Series at King's College London. The event was organised by the Centre for the Study of Governance and SocietyLink opens in a new window. I spoke about my new book, False Prophets of Economics ImperialismLink opens in a new window, to the title of 'The Epistemic Function of Mathematical Market Models in a World of Economics ImperialismLink opens in a new window'.

On November 28th 2024 I recorded a podcast for the Centre for the Study of Governance and SocietyLink opens in a new window at King's College London. The host, Professor Mark PenningtonLink opens in a new window, interviewed me about my new book, False Prophets of Economics ImperialismLink opens in a new window. The wide-ranging conversation saw Mark ask me to reflect on my inspiration for writing the book, what I considered its most important contents to be, and its implications for political economy as a subject field.

The recording is available here: Podcast - False Prophets of Economics Imperialism: a discussion with Matthew Watson - Centre for the Study of Governance & Society.

On October 17th 2024, I published an article on the Institute of Art and Ideas blog site called 'Why maths alone cannot predict the economy: Mathematical proof is not economic factLink opens in a new window'. It provides a brief philosophical account of the main claims of my recent book, False Prophets of Economics ImperialismLink opens in a new window. The most sophisticated proof-makers in mathematical economics, I argue, were clear right from the outset of their endeavour that they were not talking about the world as it is actually experienced. They were engaged instead in creating epistemic artefacts that could act as the spur to further thinking, but only on the realisation that the world that appeared in their models was a parallel universe to the world in which everyday life is lived. In other words, they were conducting thought experiments, primarily about what might go wrong if the market systems represented by series of equations were treated as something more than the mathematical notation of which they are comprised. Contemporary practices of economics imperialism fall into precisely this trap. They have to first pretend that complexly layered social situations are really markets at heart, before they can then use their mathematical market models to define the essence of those environments. As I show, though, there is no philosophical justification for proceeding in such a way. The whole project of economics imperialism thus falls down.