Modern economics has become an influential scientific discipline, but its ability to explain, predict and provide solutions to socioeconomic problems has been questioned. The criticism of and debates about economics, including the philosophical discussions, ignore the role that computer technology has played in the development of economic research.

Moving debates in the philosophy of economics beyond the state of the art

AIAS Fellow Magdalena Małecka will place digital data and algorithms at the center of philosophical analyses of economics in her ERC Consolidator project entitled ‘Encoded Knowledge: Epistemology of Computer Technology in Modern Economics (ENCODED),’ awarded with a grant by the European Research Council.

“The starting point of my project is the fact that since the 1950s, all branches of economics - in micro- and macroeconomics, in theoretical and empirical work- have increasingly relied on computer technologies of various types, from computer simulations to AI. Despite the extensive use of computer technologies in economic research, we have not understood yet if and how deeply the computer has shaped economic knowledge,” Magdalena Małecka explains.

In this way, the project also seeks to bring about informed ways to understand the power relations in and critical perspectives on economics which is crucial in a time when AI and big data has entered economics.

“It should be noted, however, that computer technology does not enter economics with the current AI hype. It has been transforming economic research for decades. Hence, it is high time to understand the outcome, meaning, and consequences of this transformation,” Magdalena adds.

Investigating transformative epistemological consequences

The main hypothesis of the ENCODED ERC project is that computer technology in modern economics is not just a tool, but that it has transformative epistemological consequences. To investigate the hypothesis, Magdalena Małecka will put together an interdisciplinary team of researchers, employing three postdoctoral researchers for a 3-year period.

The tasks of the future ENCODED research team are to develop philosophical analyses of how and to which extent aspects of computer technology, such as digital data and algorithms, shape the subject matter, questions and methods of modern economics. The team will also examine the epistemological, societal and political implications of this influence.

Interdisciplinary approach to address fundamental challenges

“The ideas behind this new ERC project are a direct development of my AIAS fellowship project, and the time provided as a fellow allowed me to be explorative. The AIAS interdisciplinary and collegial environment, the supportive and encouraging staff, as well as the many conversations at AIAS with fellow colleagues have been crucial to think big and in novel directions,” says ERC grantee Magdalena Małecka.

The research team of ENCODED will provide an innovative interdisciplinary philosophical approach based on insights from the philosophy of science, history of economics, science and technology studies, philosophy of data and algorithms.

This will allow for the development of innovative analyses of case studies in decision theory, macroeconomics, financial economics and empirical research, to address fundamental challenges to the epistemological analysis of economics brought about by computer technology, as well as to examine moral, social and political values encoded in computer technology and their impact on knowledge production in modern economics.

Facts about the ERC Consolidator project ENCODED

Title: ‘Encoded Knowledge: Epistemology of Computer Technology in Modern Economics (ENCODED)’

Amount awarded: 1 999 968 EUR 

Project period: May 2025 – May 2030

About the ERC Consolidator Grant 

An ERC Consolidator Grant from the European Research Council (ERC) is awarded for an excellent research proposal to researchers with 7-12 years of postdoctoral research experience with a scientific track record showing great promise.

More via: https://erc.europa.eu/apply-grant/consolidator-grant

See this year’s grantees:  https://erc.europa.eu/news-events/news/erc-2024-consolidator-grants-results

Contact

Magdalena Małecka, AIAS-PIREAU Fellow, AIAS-COFUND MSCA Fellow 
Email: magdalena.malecka@aias.au.dk  

Aarhus Institute of Advanced Studies, AIAS
Høegh-Guldbergs Gade 6B 
DK-8000 Aarhus C
Denmark