Economics, critical realism and system dynamics

The main goal of this thesis is to provide a full account of the deficiencies of mainstream economics largely through different economists’ own criticisms, and to subsequently describe an alternative methodology that allows for their overcoming. The only caveat that is indissolubly associated with the adoption of the proposed alternative methodology however is that the ‘scientific method’, as commonly understood, needs be abandoned; or rather it needs redefinition.To meet this highly challenging task this thesis is effectively divided into two broad sections. In the first section, which expands from Chapter 1 to Chapter 3, a theoretical approach is taken highlighting the ultimate philosophical foundations upon which the two different methodologies rest. The different assumptions that are made about the nature of the social world are made explicit and it is shown how the ‘scientific method’ along with the mainstream economic paradigm collapse when contemplating with certain features of the social world. A number of particular problematic areas of mainstream economics are also explicitly analysed and their equivalent treatment within the alternative methodology maintained and hence their resolution are also explicated.The second part of this thesis includes Chapters 4 and 5 where two topics of major economic concern are tackled. Minimum wages and pension financing are analysed both under the conventional and the alternative methodological prism. It is shown how the alternative methodology put forward allows for a considerably more realistic representation of the actual economic world, while many novel, counter-intuitive findings with regard to these two topics emerge. Most importantly perhaps, many of the specifics of the new method that have been explicated theoretically in the first section of the thesis are now demonstrated in practice