Developing theoretical knowledge is not just discovering correlations among properties that are already understood. An absolutely crucial part of the scientific enterprise – a part that was underemphasized by the logical positivists – is the construction of new concepts, of new ways of classifying phenomena. Even extremely simple models, such as the model of rationality provide such concepts. The fact that theoretical economics is devoted to the exploration of models does not distinguish economics from other sciences. In theoretical work, all scientists attempt to exclude the complications of reality. Insofar as one has any hopes for economic theory at all, there will always be some need to divorce conceptual development and empirical application. “Unrealistic” model-making is unavoidable for theoretically inclined economists. However, the special importance of models in economics points to the empirical difficulties of the discipline. The shift in economists’ vocabulary, nowadays emphasizing “models” over “theories,” indicates an increasing uneasiness about the empirical validity of economic claims and an increasing appreciation of the specificity of the objects of economic theorizing.
