The whole of science is nothing more than a refinement of everyday thinking. [The physicist] cannot proceed without considering critically a much more difficult problem, the problem of analyzing the nature of everyday thinking. (Einstein, 1936, 349)

If an economist finds a procedure widely established in fact, he ought to regard it with more respect than he would be inclined to give in the light of his own analytic method. (Roy Harrod quoted in Fritz Machlup, 1946, 519)

1There is a considerable literature that demonstrates the gap between the beliefs of economists and laypeople (Frey, 1986; Blendon et al., 1997; Caplan, 2001; Blinder and Krueger, 2004; Dixon et al., 2014; Wobker et al., 2014; Facchini, 2017). In this literature, the gap is, almost without exception, problematized as a lack of knowledge on the side of the public about economic matters, or simply as “economic illiteracy.” Other economists have employed theories of bounded rationality to explain the knowledge gap between the public and economic experts or even our evolved psychology (Boyer and Petersen, 2018). Yet others have suggested that policy views reflect self- or group-interests, rather than disinterested beliefs about optimal policies (Michaelowa, 1998; Gerber and Huber, 2010). The findings in this literature tend to suggest that the public is ignorant or, at best, poorly informed about economics. Consequently, the argument goes, economic principles must be taught earlier, more extensively, or simply better. A complementary conclusion is that the public cannot be trusted in its role as citizens judging economic policies, which is better left to economic experts (Krugman, 1994; Caplan, 2011; Brennan, 2016). This view is shared by many economists and commentators across the political spectrum.

2It is seemingly paradoxical that the same discipline which has placed the individual with his or her stable preferences and rational capabilities at the center stage of market analysis is so distrustful of the public’s opinion when it comes to matters of economic literacy and public policy views. A curious exception to this discrepancy is George Stigler, who famously argued that economists need not try to convince the public of anything, since the public already knows, or has decided it is better not to know (Stigler, 1982).

3One might say that by now the disdain is mutual. As Andy Haldane, a former Chief Economist of the Bank of England, pointed out in his speech to high school students in Birmingham, there is a “trust deficit in economics”; this “lack of trust inhibits understanding, [and] a lack of understanding contaminates trust” (Haldane, 2017, 3). Economists were questioned for their failure to prevent or predict the major financial crisis of 2008, and the undemocratic nature of economic expertise embodied in organizations like the International Monetary Fund or in central banks would increasingly come under scrutiny (Tucker, 2019). Responding to the trust deficit, populist leaders have sought to distance themselves from technocratic elites (Swedberg, 2018). It is therefore of great relevance to see whether anything can be done to bridge the gap between economists and the public, in the hope that it might also facilitate more mutual respect for economic knowledge held by the public and by experts.

4We believe that the issue we raise is part of a broader discussion about the position of economic expertise in society (Fourcade et al., 2015; Dekker, 2021; Berman, 2022). Building on initial efforts in “Everyday Political Economy” (Kerkvliet, 2005; Elias and Stanley, 2014; Rethel, 2016; Stanley and Jackson, 2016; Yates, 2022), the elevated position of economic expertise has been challenged by various scholars who have criticized economists for marginalizing certain perspectives and viewpoints (Diversifying and Decolonizing Economics, 2021; Kuiper, 2022; Francis et al., 2022; Killick, 2022a; 2023). Some economic methodologists have started to explore how bottom-up perspectives can be incorporated into economic statistics and economic theorizing more broadly (Medvecky and Macknight, 2017; d’Ippoliti, 2020; van Bouwel, 2023). After all, in his speech, Haldane recognized the need to go beyond simply communicating economics better through improved education efforts and find a way to establish a conversation about economics with the lay public: “The voices of non-experts are rarely heard and are likely to convey different information than that available from experts, we potentially stand to learn a lot” (Haldane, 2017, 11).

5To better understand the relationship between economic experts and the public, and the type of knowledge each holds, it is indeed necessary to move the discussion on the public knowledge of economics beyond cognitive biases, self-interest, and rational ignorance. The knowledge gap, we contend, between economists and the public is itself the result of a deliberate break between everyday and scientific economic knowledge, pursued mainly in 20^th-century economics. For our purposes, we distinguish between a methodological and a historical component of this break between everyday knowledge and scientific economics. To the extent that such a break between discourses has succeeded in economics (and we believe it can only ever be partially achieved), it has resulted in a distinct language of economists and non-economists. This historical development has given rise to a particular (hierarchical) understanding of the relation between economic expertise and the economic knowledge of laypeople. In this view, experts have superior access to economic knowledge, and this legitimizes their position as policymakers or key advisers in economic policy (Koppl, 2018; Dekker, 2021).

6The methodological component of the knowledge gap relates to how we think about the relationship between economic expert knowledge and other bodies of knowledge with relevant economic content. In this article, we draw on methodological critiques of economics and rely on related discussions in sociology to suggest how convergence between different bodies of knowledge can be developed. In particular, we examine the work of two 20^th-century political economists, Philip Wicksteed and Elinor Ostrom, who attempted to resist this break and sought continuity between different bodies of economic knowledge. We draw recommendations as to what is missing in the current efforts to establish a conversation between experts and the public about economic matters. In doing so, we start from the premise that various “lay” communities as well as the expert community of economists hold valuable knowledge about the economy; this knowledge tends to be different in kind and in purpose. The challenge of bridging the gap is to create meaningful engagement between these diverse types of knowledge.

7In Section 1, we demonstrate that many of the surveys designed to assess the economic knowledge of the public fail to achieve their objectives because they equate economic knowledge with academic economic knowledge. Section 2 draws on work in economic methodology to understand how this knowledge gap, which is evident in these surveys, came about. In Section 3, we examine the work of two political economists, Philip Wicksteed and Elinor Ostrom, who aimed to bridge the gap between everyday knowledge and scientific understanding. Finally, in Section 4, we draw on recent methodological advances in sociology and surveys of the public to address the knowledge gap to suggest ways to develop an economics without a sharp break between everyday and expert economic knowledge.

1. Measuring the Knowledge Gap?

8There is now a substantial empirical literature that documents the knowledge gap between experts and the public. This “deficiency” is crucial because, as Walstad and Rebeck (2002, 922) suggested, “the economic knowledge factor is a critical variable that explains public opinion” (see also Rodrik, 2014). Speaking of the public’s understanding of economics, Lee Hansen (1986, 152) wrote that “everyone judges it to be low.” Discussing the arguments for free international trade, Paul Krugman (1993, 362) boldly stated that “economists are basically right and the general public basically wrong.” Bryan Caplan (2002, 433) generalized this claim and suggested that “laypeople and experts systematically disagree in their positive views on the economy.”

9Economists, generally, do not have doubts about who is right and who is wrong about how the economy works: “Economists need to do a better job educating the public about economic matters and spend more time communicating the implications of their research to the public” (Blendon et al., 1997, 117). In fact, Krugman (1993, 23) added, “our primary mission should be to vaccinate the minds” of people to eradicate “the misconceptions that are so predominant in what passes for educated discussion about international trade.”

10How do economists arrive at such conclusions? Most often, they are based on casual observations, but there are also more systematic surveys of economic literacy. Below, we examine two major surveys from Germany and the United States. There are, of course, other tests and surveys that examine the policy views of the public and economists, but since our interest is primarily focused on the knowledge gap, we rely on these tests of economic literacy.

11The Minimal Economic Knowledge survey (MEK) is conducted to assess the economic knowledge of German consumers (Wobker et al., 2014). The MEK survey consists of twenty-four questions. Ten questions focus on factual knowledge of economic statistics or current regulations. Another eight questions assess knowledge of definitions. Four questions pertain to financial literacy, particularly regarding investments, while one explicitly examines macroeconomic reasoning (the effect of a change in the exchange rate). With a sample size of 1,314 German adults and an average score of 59.4 out of 100, the study concludes that there is “a considerable lack of economic knowledge” (ibid., 1).

12In the United States, the most important test is the Standards in Economics Survey (SES), conducted on behalf of the National Council on Economic Education (NCEE), first in 1999 and then again in 2005. Here, we examine the 2005 version for which extensive results are available (Markow and Bagnaschi, 2005). This survey aimed to test economic literacy and, compared to other surveys, focused on assessing economic understanding rather than knowledge of economic theory. A total of 3,512 U.S. adults took the test, along with 2,242 U.S. students in grades 9-12. The twenty-four questions they answered covered topics such as Economics and the Consumer, Factors Pertaining to Production, Money, Interest Rates, Inflation, and Personal Finance. While adults achieved a passing score of 70 out of 100, students’ average score was 53 out of 100. Let us examine some of the questions from these surveys.

13The first question of the German MEK asks the following: “The price reduction of a product is called… (a) cash back (b) discount (c) rate (d) inflation (e) bonus.” 89% of the respondents give the correct answer “discount,” with most of the other respondents opting for what is a particular type of discount, the “cash back.” The respondents performed well on the other practical questions in the survey: 80% of respondents knew the reduced VAT percentage on food, with an additional 14% choosing the standard VAT rate, and about 70% were able to identify the current minister of economic affairs and technology. The results of one question even suggest that the practical knowledge of the respondents is greater than that of the economists: The question is about return policies for products. The correct answer according to the survey is that there is no such right, which might be a legal truth, but not a practical truth. Most stores do offer a return policy, and if the respondents are any guide, the average period is about two weeks.

14The results on more theoretical questions are not nearly as good. Question 6 asks: “What do you call the knowledge that people gain by training, experience, and further education? (a) knowledge capital (b) corporate capital (c) human capital (d) educational capital (e) working capital.” Only 15% of the respondents give the correct answer, which the researchers interpret, following their own methodology, as a sign of economic ignorance. However, the incorrect answers the respondents provide suggest that they are primarily ignorant about economic jargon, rather than the general idea that additional schooling pays off (25% opt for knowledge capital, 57% for educational capital). Factual questions about national averages also generate many incorrect answers. Only 3% of respondents correctly identify the average monthly net income of a household in Germany.

15But how realistic is it to expect individuals to know national averages? More recent surveys on public understanding (Runge and Hudson, 2020; Killick, 2022b; Runge, 2023), for instance, suggest that while the United Kingdom public has a very good understanding of their “personal economy,” which includes knowledge of their personal finances, as well as the earnings of friends, family, or people in their community or peer group at work, knowledge of national averages—referred to as the “national economy”—is far less relevant to the layperson and is further complicated by the highly skewed income distribution and considerable regional differences (as seen between the former East and West regions in Germany, or North and South of England, for example).

16Similar patterns can be found in the United States NCEE survey which begins with five questions about consumers and the economy. Both students (grades 9-12) and adults perform very well on these questions. The wording of the questions in this section of the survey closely reflects the real-life experiences of economic actors, which we believe explains these positive results. However, there is an exception with a question about the mutually beneficial nature of exchange: “When a person rents an apartment, who benefits from the transaction?” A considerable proportion of respondents answered that only the landlord benefits. Perhaps the choice of the landlord as an example is ill-fitting because the housing market is one of the more distorted markets in the economy. Due to various regulations such as price ceilings, housing subsidies, and zoning regulations, many economists have pointed out that mutually beneficial exchanges are not guaranteed (Glaeser and Gyourko, 2018).

17In the second section on production and the economy, both the adults and the students again performed fairly well, but both groups struggled with the following problem: “Since the resources used in the production of goods and services are limited, society must (a) Make choices about how to use resources, (b) Try to obtain additional resources, (c) Reduce their use of resources.” We have no wish to quarrel with the correct answer (a) as it relates to textbook economics, but it seems clear that both alternative answers are equally prudent ways of behaving, and thus practically right even if theoretically “wrong.” Arguably, environmental concerns have made answer (c) most salient in recent discussions.

18Students score relatively poorly on questions in the section covering Money, Interest Rates, and Inflation, but it seems likely that they do so because young people in general have little to no practical experience with business loans, loans with fixed interest rates, or the stock market. In the remaining two sections, the results are bad for both groups and indicative of economic ignorance according to the researchers’ conclusions. These two sections, each with five questions, most clearly demonstrate the extent to which the survey does not measure the knowledge gap but rather exemplifies it.

19The following question, in which respondents are asked what economists think, stands out: “Which of the following methods for reducing pollution would most economists support? (a) Increase regulation on all industries that create pollution in their production process or all products that pollute, (b) Eliminate all pollution since clean air and water are so important, (c) Reduce pollution until the additional cost of further reduction is greater than the additional benefit.” Both the adult and the student cohorts agree that option (b) is unlikely to represent what most economists think (only 5% of adults and 8% of students thought this was the correct answer). However, while only a slim majority of adult respondents (45%) agree with the authors of the survey that the correct answer is (c), most students (34%) in fact disagree with the survey authors and the adult respondents, suggesting instead that (a) increasing regulation on polluting industries is the way to go. Curiously, 32% of students (as opposed to only 12% of adults) admitted that they do not know which methods most economists would support. It seems to us that since both (a) and (c) demonstrate economic reasoning, we interpret this response as proof of economic literacy rather than ignorance. What this answer does suggest is that laypeople do not necessarily know how economists think. It is, however, a leap in interpretation to suggest it is also proof of economic illiteracy.

21However, laypeople and expert economists tend to learn about the economy from different sources, and because the former may not pay a great deal of attention to official economic statistics (Runge and Hudson, 2020, 189), lay economic actors tend to be far less optimistic about the economic future than economists (Blendon et al., 1997; Caplan, 2002). This is especially the case with low-income participants of public-understanding surveys (Killick, 2022b; 2023). While economists tend to assume that the relevant “economy” for citizens is the national economy, that assumption is questionable. People are usually locked into career paths, tied to regions, or constrained in other ways. Their personal mobility and flexibility are anything but unrestricted, so they might well be right based on their own economic prospects, although these are not representative of the overall economic outlook. Yet economists are quick to fault the layperson for this frame, rather than engaging to understand why perspectives differ, let alone which perspective is the most relevant.

22These differences in perspective are highly relevant for contemporary policy discussions. While it may be easy to demonstrate that globalization is beneficial on average, or that it benefits certain industries or migrants, industrial workers in the United States might accurately perceive negative effects of globalization for themselves. Even if their personal income has increased, they may have experienced subjective losses in terms of identity. Again, we should not expect individual perspectives to necessarily align with national averages (Swedberg, 2018).

23The presumed economic illiteracy of many citizens could stem from two potential causes. It might be due to a genuine lack of economic knowledge among economic actors, or it could result from a disconnect between what economists who designed the studies considered relevant knowledge and the type of knowledge subjects actually possessed. Our discussion here suggests that the latter factor is likely responsible for a good deal of the outcomes observed in the studies. This implies that we should analyze how to explain and overcome the disconnect between economic expert knowledge and everyday knowledge.

2. What are the Origins of the Knowledge Gap in Economics?

24Deirdre McCloskey and Arjo Klamer have attempted to capture the knowledge gap in perspective by comparing the view of economists and that of the crowd to the difference in view from the street and the eighth (or tenth) floor. McCloskey writes:

If you want to understand what it is like to be a member of a crowd you had better be down in the crowd. But if you want to make generalizations about the behavior of the crowd as a whole you had better be looking from the eighth floor. (McCloskey, 2002, 60)

25As Klamer puts it: “The street requires phronesis, practical knowledge; the tenth floor provides theoria, abstract and usually general knowledge” (Klamer, 2007, 159). Klamer argues that both types of knowledge have their use and value. The distinction between practical and abstract or general knowledge is not restricted to economics. One does not have to understand the laws of physics to know that one should be careful with heavy objects. And few cyclists ever bother about the finer details of the balancing act they engage in. For most day-to-day dealings, including economic decision-making, no knowledge of generalities is required. In fact, the personal knowledge of the particulars of time and place might be much more important (Hayek, 1937; 1945; Polanyi, 1958; 1966; Özveren and Gürpinar, 2023).

28Smith’s famous phrase the “invisible hand” would appear in his writings two more times, always pointing to the effects of human action that are not anyone’s design but that nevertheless tend to result in orderly patterns of interactions. This might give the impression that someone must be responsible for designing them. Both in the Theory of Moral Sentiments and in the Wealth of Nations, Smith points out that the pursuit of self-interest—whether by wealthy landlords or enterprising merchants—may, perhaps contrary to our common sense, under certain conditions produce results that contribute to wider benefits but do not, and in fact cannot, result from a grand master plan of an omniscient “man of the system.”

29As Sam Fleischacker (2004, 26) argued, Smith knew that “common life beliefs, the beliefs of ordinary people, can go wrong,” he was well “aware of the ability of a few well-spoken people to ‘lead and direct,’ and sometimes to mislead and misdirect, the common sense of many other people,” but he

tries by his own work to provide facts and clear explanations that will correct for that influence. What Smith does not do, in response to prejudices or other errors, is constructing a mathematical model to show that ordinary people’s intuitions are wrong, nor does he develop abstract moral principles on which to base proofs of counterintuitive moral conclusions, as Benthamites and Kantians would do over the ensuing two centuries. Smith is a critic of our ordinary beliefs, but he is an immanent critic, not a transcendental one, bringing out the rationality already inherent in ordinary life, mapping it from within and correcting it, where necessary, with its own tools, rather than trying either to justify or to criticize it from a “higher” standpoint. (ibid.)

30Smith tried to develop social science as an extension of ordinary conversation, in which the distinction between expert and layperson is downplayed. This motivated the common-sense writing style of Smith and matched his adopted ethos of the public philosopher (Schliesser, 2017). It is clear that Smith’s work was intimately connected with the lifeworld of economic actors. And for all the self-interest theorizing economists later read into Smith, his actual discussions tended to focus on particulars, such as the self-interest of the baker, butcher, and brewer (Smith, [1776] 1981), as, for instance, Emma Rothschild (1994) recognized.

31During the late 19^th and early 20^th century, the language, tools, and models of economics became increasingly distant from the language, tools, and concepts that economic actors employ. Some have associated this with modernism in economics, in which representation is problematized, and “appearances deceive.” Thus, the economist has to develop a language that is devoid of these appearances (Klamer, 1993; Fullbrook, 1997; Emmett, 1999; Leonard, 2020). This has resulted in the common contrast between scientific economics and the supposedly misguided “ersatz economics” or “folk economics” of laypeople (Garnett, 1999; Diessner, 2023). As Don Lavoie wrote:

Whether understanding the meanings operative in everyday life is taken to be below them (and best left to undergraduates) or above them (and best left to angels), economists seem to agree that their scientific discourse of economics should dissociate itself from the everyday discourse of the economy. (Lavoie, 1990, 170)

33The methodological critiques by Klamer and McCloskey challenged the widely held belief that economic science was somehow radically different from everyday discourse. They contested the idea that economics could or should ever break fundamentally from everyday discourse. McCloskey’s work focuses on demonstrating the importance of rhetoric in economic discourse, to show that economists, like all of us, are humans with a purpose (McCloskey, 2023; see also Klamer and Leonard, 1994). In Klamer’s work, economics is approached as one conversation among many, different in orientation but not different in nature from other discourses about the economy or society.

35The awareness of the impossibility of a sharp break, however, does not yet suggest what the alternative should be. Obviously, a simple dichotomy between the knowledge of laypeople and that of economists will not suffice. The global division of labor has given rise to a parallel division of knowledge. Put differently, in a complex knowledge economy, there will be many knowledge communities with specialized concepts, cognitive tools (such as models), as well as implicit theories of how they believe processes relevant to them work (Andre et al., 2022). Within this complex knowledge economy, economists have specialized in the production of a specific type of knowledge, and economics itself is increasingly organized into specialized subfields (Ambrosino et al., 2021).

36The remainder of this article will explore what an alternative economics would look like, one which recognizes the multiplicity of knowledge communities in the modern world. This itself is not intended to be a radical break with the past, but rather a reorientation grounded in existing work within economics. Therefore, in the next section, we will discuss the work of two political economists who have aspired to develop a methodology consistent with everyday knowledge and practices before we return to this methodological discussion in section four.

3. Bridging the Gap: Wicksteed and Ostrom

37Even though the dominant trend has been toward a sharp break between economics and everyday language, there have been historical examples of political economists who resisted this trend and sought to create continuity between everyday knowledge and discourse and scientific economics. Besides Adam Smith, whose respect for common sense public knowledge we outlined above, in this section, we discuss two more recent exemplars: First, Philip Wicksteed, who sought continuity between marginalism and economic decisions within the household, and second, Elinor Ostrom, who analyzed and worked with communities trying to solve collective action problems.

3.1 Wicksteed’s Economics Without the Gap

38Philip Wicksteed connected scientific and everyday understandings in his appropriately titled work, The Common Sense of Political Economy (1933). Wicksteed, a contemporary of Alfred Marshall, was a Unitarian theologian and clergyman, but also a second-generation marginalist who learned much from William Stanley Jevons. His main point of departure was the analysis of “personal and domestic administration,” a realm with which “we are most familiar” (ibid., 17).

This task of home administration is not of uniform difficulty. Materfamilias will not mind who gets hold of the bread though she will exercise a general watchfulness against its being wasted, but when she has begun her first purchases of new potatoes for the year, she will be very careful to keep the dish under her own direct control and not let one of the children determine, at his own discretion, what is his proper share; for if she did there would be disproportionate gratification and disproportionate privation. (ibid., 20, our emphasis)

40He uses this illustration as an example of efficient allocation: “She is trying to make everything go as far as it will, or, in other words, serve the most important purpose that it can” (ibid., 20). However, Wicksteed also invoked other principles in the passage, principles of appropriate distribution and proper relations within the family. What Wicksteed offered was a kind of phenomenology of everyday decision-making; he treated the actions and justifications given by laypeople seriously. The method examines the way individuals make their choices and justify them. From these justifications, substantive principles emerge, which are very close to prudence or phronesis (see also McCloskey, 2006). This is not the rationality of transitivity and completeness of preferences, but the prudent virtue of getting one’s money’s worth.

41Wicksteed’s aim in The Common Sense was to help individuals understand the “grammar” of their decisions, a grammar to which they could reflexively agree. Hence, he frequently appealed to popular sayings and everyday language. He explicitly sought a “common ground” with his readers and took care to avoid using terminology that conflicted with common usage: “Terminology … at war with the usage of language” (Wicksteed, 1933, 366). In cases of disagreement, it wasn’t the expert economist who was deemed correct, but rather the ultimate arbiter was the “general experience or observation” of individuals. In this process, Wicksteed acted as a kind of translator, mediating between the knowledge of the housewife and that of the economist. He wanted to show that common-sense knowledge is congruent with economic principles:

“Spend,” “afford,” “waste,” “worth,” “price,” are terms universally applicable to all kinds of material and immaterial resources and objects of desire or aversion, whether milk, money, time, pain, or vital energies. “It is not worth the money,” our housekeeper may say when she determines not to buy a cabbage; “I cannot afford the time.” (ibid., 27)

42When Wicksteed identified a violation of the principles of prudence, his response was not to attempt to correct it or prescribe how it could be avoided, but rather to attempt to understand how it might arise. In fact, chapter three of The Common Sense is devoted to the difficulties of economic administration: Not to demonstrate violations of some principle, but rather to explain why applying that principle is difficult in practice.

43Wicksteed’s attentiveness to writing in a language that was continuous rather than discontinuous with everyday speech was part of his goal to seek recognition and acquiescence for the new principles and theory. He sought convergence, although he recognized differences. As Comim (2004) pointed out, Wicksteed clearly attempted to do away with the break. However, what he did not develop were the implications for the position of the economist or the resulting methodology. One might even plausibly suggest that Wicksteed makes insufficiently clear what economics has to offer beyond common sense. This was different for Elinor Ostrom, who worked in a period in which economists had already established their position as public policy experts.

3.2 Elinor Ostrom’s Problem-Oriented Perspective

44Elinor Ostrom’s Governing the Commons (1990) made an explicit argument against the a priori use of theoretical models such as the prisoner’s dilemma and the tragedy of the commons in analyzing collective action problems in the real world. If we rely solely on these models, Ostrom argued, we would never expect successful resource management by communities to be a possibility. Yet, when she went out to study community governance, such solutions were often a reality.

46Ostrom’s methodology consisted of the search for substantive principles, which consider the nature of the resource and the local circumstances, as well as the goals of a particular community (McGinnis, 2011, especially points 7-10). The crucial role for the analyst is to figure out how individuals understand the problem in their action situation and what they seek to achieve. Such a methodological approach emphasizes a particular form of democratic decision-making and is in part inspired by James Buchanan, who argued that the role of the social scientist is to “explain and to understand how people do, in fact, govern themselves” (Buchanan, 1979, 145).

47Buchanan distinguished between approaches characterized by analytical egalitarianism and a technocratic method of “social engineering.” A social engineer, he argued, independently sets up “certain criteria or goals for achievement … to examine existing and potential institutions in the light of their performance or expected performance in meeting these criteria” (Buchanan cited in Levy and Peart, 2017, 46). Analytical egalitarianism avoids independently establishing criteria of success for social organization (such as “efficiency,” “rapid growth,” etc.). Instead, it “examines the behavior of private individuals as they engage in continuing search for institutional arrangements upon which they can reach substantial consensus or agreement” (ibid., 65).

48In “The Danger of Self-Evident Truths”, Ostrom (2000) cautioned against the unreflective use of theoretical knowledge to address applied questions. She not only emphasized her work on the commons but also her earlier research on policing in metropolitan areas, where theoretical models all suggested that consolidation and centralization of such services would lead to lower costs due to economies of scale, and superior service through standardization. This work, conducted through surveys of citizens as well as participatory observation with policemen, what she referred to as “riding in cars with boys” (Boettke et al., 2013), clearly illustrates her awareness that each of the relevant groups held vital knowledge. Both citizens and policemen possessed insights into the production and provision of public safety that the analyst did not possess. However, as her research aimed to integrate these different bodies of knowledge, Ostrom and her team encountered strong pushback due to skepticism about surveying their subjects:

Many scholars and public officials are uneasy about any reliance upon data collected from a survey of citizens about public agency performance. Citizens are thought by some to be uninformed and unable to give reliable perceptions and/or evaluations of service levels. (Ostrom, 1976, 52-53)

49This methodology has two sides. On the one hand, the Buchanan-inspired approach provides an operational alternative to social engineering approaches by imposing discipline on the analyst, who must examine the way actors understand the situation they are in and identify the implicit mental models used by these actors (“empirical analysis”). On the other hand, given their theoretical understanding of the situation (“theoretical analysis”), the analyst relates to the participants not in a relationship of superiority and inferiority but rather as partners, both possessing essential knowledge to arrive at a solution. The analyst is not able to dictate or design; instead, she is co-creating improvement with the individuals involved. This perspective was already evident when Vincent Ostrom helped draft the constitution of Alaska in the 1950s in conversation with constituents (Herzberg, 2015, 103-104) and can be illustrated by the internal structure of an action situation (see Figure 1 below) as conceptualized by Elinor Ostrom (2005, 33).

50In Figure 1, we can see the internal structure of an action situation, which is the “focal unit” of institutional analysis according to the Bloomington School of Political Economy. The structure of an action situation suggests that whenever we examine social interactions among, say, buyers and sellers who exchange goods in a market, or among users of resource systems appropriating resource units (such as fish or timber), we are observing participants who enter into specific positions enabling them to take certain actions. These actions, depending on their knowledge (which is influenced by available information and their subjective understanding) and the level of control they have, generate certain outcomes to which costs and benefits are assigned.

51Ostrom noted: “In addition to using the elements of an action situation to analyze a formal game, the elements can also be used to describe the structure of more complex action situations in a nonmathematical form” (Ostrom, 2005, 34). What this diagram clarifies, and what relatively simple mathematical models of formal games often overlook, is that the understanding of the action situation held by the actors (as determined by the implicit mental models they use) and the analyst (as determined by the theory they employ) may not coincide. If this is the case, intellectual humility—exemplified by the likes of Smith and Wicksteed—imposes discipline on the institutionalist who cannot simply dismiss the former and choose to privilege the latter.

52The implications of this vision of knowledge for the methodology of social science are explored in the appropriately titled methodological book, Working Together (2010), by Elinor Ostrom and co-authors. The book serves as a defense of a multiple-method approach and emphasizes throughout that due to the limitations of expert knowledge, analysts must draw on the knowledge embedded within communities. The proposed methodologies are characterized by attentiveness to how communities understand their own environment, perceive relevant problems, and accept potential solutions. In this approach, the scientist does not simply “uncover” principles unknown or unrecognizable by the subjects. Instead, it involves seeking consent from communities regarding proposed solutions, contrasting with the dominant public policy approach in which economists are believed to “intervene.”

4. Toward an Economic Methodology Mindful of the Gap

53Now it is time to return to our methodological discussion about the possibility of an economics that recognizes multiple bodies of relevant knowledge and maintains continuity between them. The work of Wicksteed and Ostrom suggests that we should address at least three aspects of economics. First, it should be made clear how economic principles are related to the actions and interactions of relevant actors and how they understand their own situation (cf. Wicksteed). Second, it requires a methodological reorientation that allows economists to draw upon the knowledge of these economic actors (cf. Ostrom) and, by implication, reconsider the relationship between economists and ordinary people (cf. Smith, Ostrom). This might not be an exhaustive list, but we believe it is a good starting point for exploring an economics mindful of the gap.

54There is a long tradition in economic methodology that looks into the relationship between economic theory, its underlying assumptions, and the relation of economic models to the social world (Friedman, 1953; Hausman, 1992; Mäki, 2009; Morgan, 2012), including why expertise based on this knowledge might lead to failure (Koppl, 2018). However, this literature typically ignores the question of how to think about the knowledge held by economic actors. There is, however, an emerging literature that studies how particular types of knowledge came to be prioritized, and other types of knowledge marginalized, for instance, around poverty (O’Connor, 2009; Krumer-Nevo and Benjamin, 2010; Forget, 2011). There are also several recent surveys of public understanding of economics conducted with an “ethnographic sensibility” that rely on open-ended questions and aim at surveying what people actually know about the economy rather than whether they know about specific economic concepts and aggregate statistics chosen by economists (Cramer, 2016; ING and The Economics Network, 2017; 2019; Killick, 2020; Runge and Hudson, 2020). In these surveys, the “researcher approaches questioning with an open mind about what constitutes ‘knowledge’” (Killick 2023, 30). In this section, we build on these developments and draw upon a related literature in sociology with the aim of deriving specific recommendations on how economists can better engage in conversation with economic subjects.

55In his book On Justification (2006), co-authored with Laurent Thévenot, Luc Boltanski proposed studying denunciations by which actors criticize the actions of others. Denunciations emerge in disputes; actors criticized by others often feel the need to justify their actions accordingly. The most visible forum for justification is the courtroom, but it can also occur in board meetings or conversations between individuals, in which one feels wronged by the other and demands an explanation. It is in such instances that routine activities and decisions must be justified, revealing the rationale behind actions.

57Boltanski therefore finds it curious (to say the least) when critical sociology claims a monopoly on these “critical [and justifying] operations” that constitute the basic competence to make judgments about economic matters, as “this competence is not the privilege of the philosopher or the sociologist. It is constantly put to work by actors themselves” (Boltanski, 2012, 27). We find this to be the case again and again when confronting participants in surveys of public understanding of economics with official unemployment or inflation statistics.

58For instance, when informing the participants of a survey that the British Office for National Statistics figures “for May to July 2020 show that the United Kingdem unemployment rate is 4.1%, equivalent to 1.4 million people,” the reactions were typically somewhat skeptical:

I think that’s bullshit. There is absolutely no way only 4.1% of this population is unemployed right now, that is absolutely ludicrous … I know so many people who have been made redundant. I am on the brink of it myself. WOMAN, 29, COMPLAINTS HANDLER … 1.4m, no chance! It’s got to be higher than that, a lot higher! Whoever made this up is having a laugh. I don’t agree with that at all. … WOMAN, 55, MYSTERY SHOPPER (Runge, 2021, 13, our emphasis).

59The disbelief and consequent contestation seem to stem from the fact that most respondents lack knowledge about how the rate of unemployment is measured. Respondents typically tend to assume that the unemployment rate is calculated as a proportion of all working-age adults without a job (rather than as a share of those who are “economically active” or part of the “labour force”), in which case the rate would be much higher and close to 25% (one in four people). As Runge and Hudson (2021) suggest, it is clear that survey respondents typically describe the term “economically inactive” as a “smoke screen” and a “loophole,” which leads to distrust of these statistics because of “how different types of employed workers and unemployed people were categorized in official data” and “whether people believed these classifications to be justifiable” (Runge and Hudson, 2021, 87, our emphasis).

60Focus group participants criticised these classifications, highlighting that “job quality” and “suitability” mattered to how people perceived labour market performance. As such, it was commonly argued that “low-quality jobs,” often perceived in terms of hours, pay and job conditions, should not be counted fully towards official employment statistics (Runge and Hudson, 2021, 86). Such jobs are involuntary low-quality unemployment, a notion which could very well be made compatible with existing ideas about frictions in the labor market developed by as economists.

61We believe that this focus on contestation and the way ordinary people justify the perceived inadequacy of official classification provides a crucial insight, for it allows us to move beyond the mere study of everyday discourse. Just like Ostrom was not quite content to study the supposedly given structure of action situations that individuals faced, Boltanski is aware that actors are continuously working toward solutions and critiques. Conflicts are moments during which actors engage in the first step of the task of clarification: Formulating a more systematic account of their personal (and often tacit) knowledge.

62This also opens the possibility of mutual criticism. For instance, when the focus group respondents learned that the contested “distinction between employment, unemployment, and economic inactivity meets internationally agreed definitions, specified by the International Labour Organization,” they would, as Runge points out, often say something like this: “Well, the internationally agreed definitions are rubbish and need to be changed, then!” (Runge, 2023, 2, our emphasis). In principle, we believe that to bridge the knowledge gap economists must not privilege any type of knowledge. Furthermore, the analyst must be willing to accept criticisms as they come:

The illusion I [the analyst] had to give up presupposed a space with two levels, that of the actor’s beliefs and that of the underlying reality to which the sociologist alone could have access. Now that space is no longer mine, and I can no longer rely on the form of asymmetry on which it was based. (Boltanski, 2012, 80)

63Boltanski argued that neither party can claim a priori superiority in knowledge. But this is precisely what the economic literacy surveys tend to do. On the other hand, more recent “bottom-up approaches,” employing interpretive methodologies, attempt to avoid such biases.

64An additional reason to favor this more symmetrical approach is that it takes consent more seriously than asymmetrical approaches. In mainstream economics, it is widely accepted that the superior knowledge of economists as experts justifies proposing interventions and corrections. This belief is evident in traditional macroeconomic interventions as well as modern behavioral interventions (Rizzo and Whitman, 2020). This decisive step is what made the work of Elinor Ostrom and the Ostrom Workshop so distinct. When they believed they could offer advice or improve the management of common-pool resources, they submitted their proposals and reports to the actors, opening up their accounts to criticism in an approach they called community-driven development (Dongier et al., 2002).

65Our proposal for economics without a break is primarily a call for a change in methodology, not necessarily in the content of economics. The researcher does not have to question the postulate of rationality in the sense that actors seek the best way of managing their affairs given situational constraints. As Killick tentatively proposed, the apparent “disengagement from the economy [observed among the low-income respondents] is reasonable and calculated rather than inexorable and emotional” (Killick, 2022b, 184, our emphasis). In fact, as Boltanski (in agreement with Ostrom) suggests, a basic assumption of rationality—that people try to do the best they can, given their understanding of circumstances—is essential for this methodology. If we don’t assume a rational and critical capacity on the side of the social actors, such a methodology cannot work (Boltanski, 2012, 33).

67The first sketch of this alternative position of economists is thus that they exist as one knowledge community among many. Within this ecology of knowledge communities, it is important that there are individuals or even groups with interactional expertise who can facilitate communication between these communities and bring different types of knowledge together. The relevant question would shift from the current interest in what the public knows about economics to what different knowledge communities have to offer to other groups, and to what extent their perspectives can be made to converge through translation efforts. Discontinuities between knowledge communities would be a significant issue because they would suggest that different types of knowledge cannot be made compatible with each other. However, such discontinuities should not lead us to infer that one group is illiterate, ignorant, or misguided. Rather, boundary work is necessary in what Collins and co-authors call “trading zones” (Collins et al., 2007).

68Contemporary critiques that economics is sealed off, or even autistic, or that economic statistics are unreflective of underlying economic realities or inequalities, or that economists are too detached from the world, should be understood as complaints about persistent discontinuities. These problems might be partly solved by a more inclusive discipline as some suggest, but our argument here contends that this will never quite address the issue of different bodies of knowledge, only some of which are academic in nature. Elsewhere, we have suggested that this means thinking seriously about the moral perspectives of diverse social groups (Dekker and Kuchař, 2020). Others have explored what citizen science might contribute (Pamuk, 2021; Van Bouwel, 2023). Diverse initiatives are certainly necessary, including methodologies that are more interpretive in nature and that seriously explore “folk economics,” rather than condemn it.

Conclusion

69Alfred Marshall defined economics as the “study of mankind in the ordinary business of life” (Marshall, 1890, 1). Today, substantial parts of economics are completely disconnected from ordinary life and language. We have argued that modern economists consciously sought this break, resulting in a disconnect between everyday and scientific discourses about the economy. We advocate for an approach that seeks convergence between such accounts. This should be an interactive process in which one type of knowledge is not a priori privileged. An economic methodology without a hard break between everyday and expert knowledge requires two major changes. First, economists should give up privileging one particular type of knowledge—scientific and general—over all other types of economic knowledge of the world, such as tacit and particular knowledge, as the only relevant type of economic knowledge. Second, the analysis of the reflexive and critical capacities of economic actors provides an untapped resource for the development of economic knowledge and for a kind of economics that is continuous, but not identical, with understandings of the economy by communities of practitioners. We believe that economics without the break has the potential to make important contributions to public discussions about the economy, economic policy, and economics education.

70We have shown that there are important precedents in the history of economics for such an approach. These precedents are not at odds with mainstream principles but have the potential to enrich economic principles. Wicksteed’s contribution was to demonstrate how the principles of marginal analysis were continuous with everyday decision-making and reasoning. Elinor Ostrom went several steps further. She showed that problem identification, as well as solution implementation, require input and cooperation from those facing the (supposed) problem. More importantly, perhaps, she demonstrated that practitioners have frequently found institutional solutions to collective-action problems, which were not obvious or even inexplicable with the theoretical models of economic experts.

71An approach that is closer to the language and lifeworld of economic actors, and which seeks to draw upon their knowledge, is largely unexplored territory within economics. What actors say is typically considered to be irrelevant, or even worse, dismissed as cheap talk. Fortunately, there is a growing number of efforts to give marginalized groups a voice within the discipline, to recognize the role of narratives and meaning in the economy, and to acknowledge that the mutual distrust between economists and the public is unhealthy. We believe that recognizing the various types of knowledge about the economy as valid can help economics bridge some of the gaps we have discussed in this article.

72The development of an economics mindful of the gap will have two additional benefits quite separate from the fact that it allows us to better assess the economic knowledge and understanding of “the public.” The most common occurrence of the confrontation between economists and “the public” is in the classroom. Economic textbooks are a clear instance where everyday understandings meet the understanding of economists. In these books, it is still common to “unlearn” everyday understandings in favor of the “correct” understanding of concepts such as self-interest, demand, and public goods. Illustrative cases typically serve the purpose of demonstrating fundamental economic principles rather than the complexity of economic decision-making. The hermeneutical approach built around the clarification of substantive principles that actors often tacitly follow has, we believe, great potential to improve economics education.

73Finally, economics without the break will make it easier for economists to connect and relate to the views of the public, helping to close some of the misunderstanding and distrust that currently exists between economic experts and the public. It will require giving up some of the epistemological privileges of the economist and necessitate a more active engagement with the knowledge of various publics. In the medium run, it might also help improve the impact of economists in the public debate and, more generally, enhance the reputation of economists. We should end with a note of humility. Not every individual economist will need to change, probably not even most of them. If our argument here is valid, then it is primarily an argument for the importance of what Collins and Evans called interactional expertise. These knowledge brokers should not be confused with economic communicators but should engage in boundary work as a two-way street in which different knowledge communities contest and enrich each other.

Pavel Kuchař gratefully acknowledges the support of the Czech Science Foundation, grant n°22-28539 S. We also wish to express our gratitude to the participants of the 2019 International Network for Economic Method (INEM) Conference at the University of Helsinki, the 2019 conference “The Soul of Economics” at the University of Zurich, as well as the 2019 Developments in Economics Education Conference at the University of Warwick where Kuchař presented an earlier version of the article (under the title “The Epistemological Break in Economics: What Does the Public Know About the Economy and What Do Economists Know About the Public?”) for sharing their comments and insights with us. We are especially thankful for the discussions at the 2023 Symposium on “Markets, Power, and the Cultural Production of Knowledge” held at the Centre for the Study of Governance and Society (CSGC) at King’s College London. We also extend our appreciation to the two referees and the editor of Œconomia for providing valuable feedback that greatly contributed to improving the clarity of our argument. Needless to say, any remaining errors and omissions are our responsibility.