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Why Labour Economics is Inadequate for Theorizing Industrial Relations

This article challenges the assumed superiority of neo-classical labour economics as a means of theorizing labour unions by applying a critical realist critique to methodologies typically applied in the field. For this purpose, the critique draws on the work of Roy Bhaskar and other critical realists by first situating critical realism within two broad philosophical traditions: classical empiricism and transcendental idealism. It points out the failure of these traditions to acknowledge the possible existence of autonomous structures and objects which are beyond empirically based calculation and conceptualization, arguing instead that such structures and objects can only truly be revealed through research methodologies that make reference to a layered ontology. The discussion then advances on this by outlining the main features of critical realism’s three-way ontology, before providing an example of how this ontological reasoning diminishes the validity of research of labour unions based solely on the type of deductivist methodologies commonly used in labour economics. JEL: B4, J5