The critical realist conception of open and closed systems

Abstract

The critical realist (CR) conception of open and closed (O&C) systems is not about systems: it is about (ir)regularities in the flux of events and states of affairs. It has recently been criticised on the grounds that critical realists (CRs) should take on board ideas about the general nature of systems; recognise that genuinely open social systems would be impossible; avoid polarities or dualisms where either there are event regularities and open systems, or there are no event regularities and closed systems and accept partial regularities and partially open systems; and understand that orthodox economics is not based upon event regularities, laws or Humean empiricism. The objective of this paper is to ‘take stock’ of these recent criticisms.

Keywords:

• critical realism
• open systems
• closed systems
• event regularities
• stochastic event regularities
• demi-regs
• restricted closure
• partial event regularities
• partial closed systems

Acknowledgement

I wish to thank Jan Karlsson, Tony Lawson, Andrew Mearman and Jamie Morgan, plus several anonymous referees for their insightful comments on earlier drafts of this paper.

Notes

1. Evidence for my answers will emerge as the paper unfolds.

2. For ease of exposition, I will often refer to ‘regularities in the flux of events or states of affairs’ simply as ‘event regularities’. Occasionally I will use the full expression as a reminder.

3. I couch this in terms of the social world because I am dealing with a social scientific context.

4. This does not apply to experimental and behavioural economists.

5. See Hodgson (2006, ca. 127), Mohun and Veneziani (2012, pp. 131, 132) and Fleetwood (2001) for an alternative view.

6. A reviewer asked for further clarification of these terms. Unfortunately, word-length does not permit this, but I have elaborated in Fleetwood (2016). See also Pratten (2007, part 3); Nash (2004, part 3); Hodgson (2006). For discussion of abstraction see Sayer (1998) and Lawson (2015). For a discussion of isolation see Mäki (1992, 2009) and Lawson (2015).

7. It is important not to be thrown by cases that trade on conflation. What I have referred to as isolation might, for example, be conflated with abstraction, so that isolation (for closure) becomes synonymous with abstraction (for closure).

8. Phrases like ‘Epistemology cannot be conceived of as an open system in the same pure sense as social ontology’ (Dow, 2004, p. 309), are confusing. It is hard to know what it means to conceive of epistemology or ontology as an open system.

9. There are, of course, many events and states of affairs that cannot be meaningfully quantified, counted, measured or approximated, although they never appear in economic models.

10. M, u and v denote job matches, unemployment and vacancies.

11. h denotes hours of work and w the wage rate.

12. Lawson (1997, pp. 206, 207) gives a list of examples.

13. Probabilistic or statistical laws are, of course, well known and appear in I-S and D-S models – e.g. the Law of Radioactive Decay: N_t = N₀ exp(−λ t), where N is number of nuclei; λ is the decay constant and t is time. It describes not the behaviour of any particular nuclide, but how nuclei behave on average. The number of nuclei in a sample of radioactive material will decay exponentially with time, depending upon the value of the decay constant.

14. In CR circles this is sometimes put in terms of ‘regularity stochasticism’, as opposed to ‘regularity determinism’. See Lawson (2003, p. 5) and Lewis and Runde (1999, p. 38).

15. This is often referred to via the question: ‘Does God play dice’. The jury is out.

16. Or conditional expectation, conditional expected value or conditional distribution. The approach is consequently often referred to as the ‘average economic regression’ approach (Downward, 2015, 211).

17. Olsen and Morgan (2005) reflect on this matter.

18. Some refer to nomological machines, others to data-generation processes, to ‘explain’ where this probability distribution function comes from. If truth be told, however, there is nothing in the social world like a die, which can generate such a function.

19. The term ‘tendency’ was introduced to economics by Marx and later J.S. Mill, and has been used (and abused) ever since Hausman (1992) mentions laws and tendencies, but in his case, only in discussing the work of J.S. Mill. Cartwright (2007) deals explicitly with conceptions of law, but also mentions tendencies. It is not entirely clear if Cartwright’s concept of tendency, which appears to derive from J.S. Mill, is similar to the one used by CRs. Sutton (2000) book entitled Marshall’s Tendencies, unfortunately, does not define the term.

20. Lawson (2009a, pp. 151, 152) explains why he sticks with the term.

21. See similarities with terminology used by Chick and Dow in Section 3.3.

22. Chick and Dow think Lawson has a problem with the concept of a boundary. Lawson would not deny that, for example, an organisation has some kind of a boundary. His concern about boundaries ‘distorting reality’ is a concern with constructing theoretical boundaries in order to model an open system as if it were closed.

23. As if anticipating this demand for elaboration, Bhaskar noted: ‘Nor need such a system be “closed” in any more picturesque sense of the word’ (1978, p. 14).

24. These could be interpreted as references to the strength or weakness of notions and definitions. I will not interpret them this way.

25. I have inserted this unstated and not particularly contentious presumption because Mohun and Veneziani’s argument needs it.

26. Lawson (2009b, pp. 177, 206, 207) comments on some of Nash’s ideas, but not those I discuss here.

27. We can ignore the case of a totally chaotic flux of events.

28. These shifts can be interpreted as caused by structural breaks, time-varying parameters, or changes in the ‘institutional environment’.

29. Recall (Section 2.6) my comments on the ‘laws’ of labour supply and labour matching.

30. Hindriks does not state which type of economics he has in mind but it seems to be orthodox or mainstream economics.