The philosophical notion of realism has its sharp roots in ontology, i.e., with inquiry into the nature of being, of what is or exists, together with the nature of the objects of study. Realism is part and parcel of economic methodology or policy.
There are different ways in which realism may be understood to operate in economics. Through these ways we can recognize a series of economists who can be said to be realists. There is also a philosophical approach to realism viz. critical or transcendental in nature expressing beyond event symmetries which are generated by empirical science.
It focuses on fundamental structures as the suitable piece of economic study. Transcendental or critical realism offers an outlook on science (logic), economy, and society that has a tendency to understand the political economy (distribution of political and economic powers in a society) of the countries. Moreover, it is also able to withstand the perception that there is rationality behind the origin of civilizations and human social history.
We often doubt the most diversities of realism that are relevant to economics and its various branches especially microeconomics (economic behaviour and aspects at micro level) and macroeconomics (economic behaviour and aspects at macro or country level) on the grounds that economics (social science) does not hypothesize unnoticeable in the manner that natural science (physical science) does.
We must not forget that there is a very high probability for being realist about cause and effect relationships or causality thereby pointing to the fact that we can greatly apply realist reasoning to causality for they are the best solutions to the economic problems.
The economic problems cannot be detached with the problem of choice, scarcity, and subsistence. According to Samuelsson (Economics, 11th ed, 1980) the economic problem is the struggle for subsistence, always has been up till now primary, most demanding problem of the human race- not only of the human race, but of the whole of the biological kingdom from the beginnings of life in its most primitive forms.
Many realist economists including Jochen Runde appreciate causal explanations as responses to questions (why questions in particular) giving additional information about outlooks, capabilities and propensities. Realistic economic theories are experiencing revitalization mode within the subject of economics.
Critical studies of the particular nature of the subject matter of economics together with the type of methodology used that can reasonably be validated for the scientific study of economic objects and economic problems (especially central problems of an economy: What to produce? How to produce? How much to produce? For whom to produce?) are making a comeback. Realistic Economists are yet again speaking about such problems as the relationship between economy and the rest of society including environment.
There is transformed awareness and attention in explaining elementary groupings such as causation, money, competition, utility, culture, norms, stratification, diversity, need, power, reality, rationality, technology, globalization, time, and risks, etc. In contemporary economics, to dream of more realistic economic ideas and theories, there is a need of understanding all the above mentioned elementary groupings. Above all there is great need to understand the logic behind every economic reality for logic or science is concerned with recognizing and enlightening mechanisms and economic systems.
COVID-19 is the biggest economic and social reality in the contemporary world. It is not only a global pandemic and public health emergency, but the most contemporary realistic economic problem.
It has also rigorously impacted the global economy. The basic realistic economic consequences of this pandemic are substantial declines in income, a rise in unemployment (educated unemployment in particular) and troubles in the means of transportation service, etc.
The most unfortunate part about this reality is that most economies in the world undervalued the risks and jeopardies of rapid rise in COVID-19 cases and were typically volatile or oversensitive in their reaction to this crisis.
As COVID-19 does not seem to vanish in the near future, we must understand the realism behind the economics of COVID-19. For that matter there must be positive global actions for not only mitigating the COVID-19 shocks and saving lives but also safeguard economic wellbeing.
Dr. Binish Qadri is Assistant Professor, Department of Economics, University of Kashmir