Page 41 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.80, # 1, 2023, pp. 35-53

The political economics in its integrated approach combining the economic processes
with the dominant socio-political environment is not new as it was there in classical
days too; Lowe’s political economics explicitly recognises its instrumental character
and combines that in its method called instrumental-deductive method or instrumental
inference in contrast to traditional hypothetico-deductive method of economics.

INSTRUMENTAL INFERENCE
A primary task of political economics in the era of modern capitalism is instrumental
inference (or instrumentalism) (Murray, 2022). Lowe’s methodological framework of
instrumental inference calls for the collaboration of other social sciences with
economics to devise a controlled path of economic development. In the instrumental
approach, we first determine organizational rules amenable to reaching the macro-goal
which is known. This is the instrumental part of the method of political economics
which is based on regressive inference. It starts from a known goal and reaches the
initial state discovering the behavioural, motivational, and organisational patterns
needed to achieve the macro-goal. In the next step, which is the deductive part of the
method, the configurations and operational principles discovered serve as premises
and the instrumental analyst goes from cause to effect using progressive inference.

Instrumental inference inverts the mode of inquiry in traditional positive analysis (Murray,
2022). In traditional analysis, behavioural, motivational, and organisational patterns are
given and based on these given premises economists try to achieve the economy-wide goal
or predict the future path. In the instrumental analysis, the motives and patterns first become
objects of inquiry and once these patterns are discovered a progressive inference is used to
chalk out a path to achieve the macro-goal and thereafter suitable controls are established.
The process provides realistic premises for deductive analysis to be based on.

The instrumental approach to economic policy incorporates heuristic reasoning from the
works of George Polya, Charles Sanders Pierce, and Michael Polanyi. Adolph Lowe's
political economics combines analysis and synthesis methods from George Polya's "How
to Solve It; a new aspect of mathematical method" where analysis involves regressive
reasoning and synthesis involves progressive reasoning (Polya 1988, p. 142).

Abductive reasoning, also called retroductive reasoning that involves provisional
adoption of hypotheses based on instinctive guess and experience of facts (Peirce
1935, p. 151-75). Applying abductive reasoning, we can guess the preconditions from
the consequents, that is what we attempt in the instrumental part of political
economics. Once premises are formed based on motives and behaviours, deductive
inference is used to move towards the terminal goal. This approach differs from
hypothetico-deductive reasoning, as retroductive reasoning can be better in choosing
hypotheses and discovering goal-adequate requirements.

41