Realism and Relevance in the Economics of a Free Society

The methodological debate between Frank Knight and Terence Hutchison is usually framed in terms of the philosophical debates between positivism and intuitionism, or between empirical knowledge and theoretical knowledge. Hutchison’s The significance and basic postulates of economic theory was, after all, a defense of the need for empirically-based economic knowledge, using the justificatory framework provided by logical positivism, and Knight was widely known for his defense of the understanding of economic theory often associated with Lionel Robbins’ Essay. But the dispute between Knight and Hutchison was much more than a battle over the epistemological status of economics’ basic postulates. For Knight, Hutchison's positivism posed risks for the discussion at the heart of liberal democracy. Hutchison, also, aimed his methodological criticism of economic theory at a similar target: the economic objectives of all societies would be achieved sooner if planners were guided by an empirical economic science