The issue of ontology concerns the existence and the facts of being. It is a method of enquiry into the existing things; the being of beings. Philosophical ontology seeks to answer questions regarding existence, what is considered to exist and in what categories, as well as understand the meaning of beings and the modes of being available. Some philosophers and scholars that were proponents of this school of thought are Martin Heidegger, Bertrand Russell, and Barry Smith among many others.[footnoteRef:1] [1: Roberto Poli and Johanna Seibt, Theory and Applications of Ontology, (Dordrecht: Springer, 2010), 21. ]
Economics, on the other hand, studies human action in the economic world concerning the way they acquire and utilize material resources. Being composed of objects such as commodities, banks, money, and markets, it also involves much knowledge in relation to the preferences of the human beings, expectations and, therefore, has a subjective part involved in it. Ontology is applied in the various fields of research, especially in economics. Ontology is used to explain what constitutes a domain and what features best describe the particular domain. It examines the domains regarding concepts and their hierarchies as well are their arbitrary relations. There are ontological economics. However, none of them significantly represents economics as a whole. Instead, it only covers sub-sections of economics.
Macroeconomics studies economics at a wide scale, reviewing the ways all the markets in a particular region interact with one another. Microeconomics, on the other hand, considers a single market and defines the dynamics of a single market, such as the supply and demand. Microeconomics is based on the agents that influence a consumer to buy a product. These agents help them to make decisions whether to buy or sell. It works on the assumption that these decisions will result in a situation of demand being equals to supply, namely perfect market clearing. It also examines human behavior in the market and the results of all aspects that may, either directly or indirectly, affect the consumer. These include minimum wages, monopoly of markets, taxes, etc. Macroeconomics considers the relationships between the big aggregates, such as the national income and the overall price behavior. Since these concepts differ in scale, they also overlap with each other. For example, the individual’s incomes are considered in microeconomics when examining the general pricing process, and earn the same income through the selling process.
A philosophical approach to this issue involves the normative concerns that influence the facts and the values. There is one argument connected with the distinction between these facts and values. Some economists believe that there should be a difference between what is and what ought to be in the economy. Another argument concerns the question of considering some economics as positive science that would help to accomplish needs, but does not affect the choices that lead to such outcomes. This would cause the economics first to define and articulate the constraints as well as provided goals and identify the exact values that govern economics.[footnoteRef:2] [2: Stephen Pratten, Social Ontology and Modern Economics, (Routledge, 2014). ]
This question causes the second argument, in which macroeconomics and microeconomics constitute. It uses ontological concerns to identify what exactly exists in macro or microeconomics. This raises the question of whether there is ontology of macroeconomics and, if so, how it should affect practical macroeconomics.
Macroeconomics is always subsequent to microeconomics. This means that the structures and features in microeconomics always generate into macroeconomics. This does not reduce these two science; it only shows that macroeconomics has an ontological connection without affecting the ontological independence of aggregates that interact independently. The ontic parts of microeconomics is not preserved when moving to macroeconomics. This conceptual shift clearly shows the units of measurement. For example, there is a physical unit for a real good; however, the real GDP has only a monetary unit. The aggregates in macroeconomics exists due to the underlying microeconomic agents, but are ontologically distinct. Therefore, the following questions arise, namely why should they be regarded as real when existing objectively and independently from the mind. Why could not this relationship be considered as a form of reduction?
An ontological chart is a graphical representation of a system or structure in a hierarchical manner. It is commonly represented by an acyclic graph that uses nodes and arrows to show the relationships of the components in a certain system. Ontology in systems concerns definitions, domains and establishes what constitutes a particular domain as well as the relationships between the concepts that comprise it. An ontological chart, therefore, would be a graphical representation showing the set of concepts, the relations that unite them and the instances associated to the concepts. Thus, the chart has the following features: the Ontology (O) structure has the Concepts (C), Types (T), Relations (R), Attributes (A), Instances (I), and Values (V).[footnoteRef:3] [3: Edward Fullbrook, Ontology and Economics: Tony Lawson and His Critics (New York: Routledge, 2009), 31. ]
When creating an ontological chart, the domain interests should be always considered. In this case, the domain is the economic concepts. An individual should understand these concepts in order to create successfully an ontological chart. Different economic researchers have different approaches to these concepts that make the chart sensitive due to the consequent inability to formalize them easily.
Creating ontology of economics requires to follow some steps. The first step is k-clustering. This involves making a list of all concepts and the sub-concepts of the particular domain. The sub-concepts are clustered together several times until they are placed in a reasonable group. The next step is to inquire for a particular concept by offering a set of keywords that describe the required concept. The next step is to create the visual-based assignment of concepts. Then, manually assigning the documents to concepts is the last step in the process of creating an economic ontology.[footnoteRef:4] [4: Clive Lawson, John Latsis and Nuno Martins, Contributions to Social Ontology (London: Routledge, 2007), 35. ]
Ontologies and ontological arguments have deficiencies in their entirety. Firstly, they are insufficient in solving or seeking solutions to resolve unstructured knowledge. Formal ontology is structured in such a manner that it represents knowledge in a particular domain. However, this makes the ontology subjective due to the lack of rules that define the ways the ontologies should be made. The ontology without its complementing parts is insufficient. For example, ontology is useful in the initial stages of a project, but cannot exceed this and give an analysis of what the customer wants to extract from the knowledge contained in the ontology. This makes the creation of an ontology very complex and requires much review and experience define a synthesis as well as a compromise to provide an accurate and high quality concept.
There are various standpoints and arguments regarding the question of whether economics is a science. The proponents of the view have very strong and valid arguments to support their claim. Economics is a social science concerned with studying human behavior and the society as psychology or criminology. This science studies the interaction of markets and the relationship between the buyers and the sellers. It also studies the social behavior towards the consumer as well as producer activities and agents that influence this.[footnoteRef:5] [5: Edward Fullbrook, Ontology and Economics: Tony Lawson and His Critics (New York: Routledge, 2009), 56. ]
Economics also uses mathematics in its theoretical framework incorporating differential calculus to explain human economic behavior. The use of mathematics makes economics a branch that involves quantitative analysis in the optimization, and the qualitative one while examining social interaction. In addition, economics is a science due to the use of a scientific approach when testing hypotheses. When examining economic questions, economists formulate hypotheses and test them in a very precise scientific method. Therefore, the economists face problems to understand the full picture of the general factors that cause certain reactions, as well as what factors cause other types of reactions in the market, similarly to many other scientists in physics or biology.
Moreover, some scholars believe that economics is not a science. Some feel that economics uses mathematics and scientific models for show and not as a real aspect. In the strict sense, it does not really follow the scientific method in its deliberations. The scientific method includes experimenting and testing repeatedly with a lot of room for error and falsities. However, when studying the economy of a country, economists do not have the luxury of constantly changing the economy of a nation with an aim to control and change the interest rates. There is no possibility for repeated and controlled experiments.
Economics is not a science in the same sense as physics or biology. The reason is that it does not have the right models to predict the effects of a particular phenomenon in the market. Economics has consistently failed to accurately predict the financial fluctuations in the market and when a financial crisis may happen. The economic and market sphere is very unpredictable, and this feature of economics is unchangeable. The most suitable classification of the economics method is a pseudo-science.[footnoteRef:6] It tries to become a science, but it fails. I agree that economics has a long way to go before it can be referred to as a science in the same category as already established ones, such as physics, chemistry or any other. [6: Wolfgang Huemer and Beatrice Centi, Values and Ontology: Problems and Perspectives (Berlin: De Gruyter, 2009), 14. ]
In any nation, the political governments tend to control the economic system. Therefore, the economy of a country appears as though it was controlled by the government. The reason is that politics is possible by the authority due to the economic resources of the people. However, these two are different, especially concerning their power and goals. The political system seeks to control and establish power in governance through appointing or electing leaders. Consequently, there are different types of political systems based on the manner through which this goal is attained. There are dictatorial systems, monarchical systems, etc. It is also concerned with enforcing and implementing laws in their jurisdictions for the social order. The economic systems, on the other hand, control the production and distribution goods and services in the market. It determines the way the resources will be utilized to produce goods. The laws of supply and demand determine the success or failure of the products and services. It also controls the circulation and supply of money in the market.
Formal ontology seeks to provide a view on reality that is independent of domain and application using axioms and formal language. This enables any individual intention to create an ontology that is domain-specific in order to avoid errors in their ontological assumptions. This is common when modeling or creating very large-scale ontologies. In my own opinion, the field of formal ontology and its applications in the various fields needs to be approached with caution and deliberated considerations to achieve accurate and sufficient results.