August 5, 2015

Freshwater, saltwater, scientific dishwater

Comment on nanikore on ‘Macroeconomic ad hocery’

Blog-Reference

It is by and large a forgone conclusion to single out Lucas, Krugman, Romer, Woodford, Eggertsson, or Rogoff for not applying the scientific method correctly because all of Orthodoxy is a misapplication. This is not exactly breaking news.

“Suffice it to say that, in my opinion, what we presently possess by way of so-called pure economic theory is objectively indistinguishable from what the physicist Richard Feynman, in an unflattering sketch of nonsense ‘science,’ called ‘cargo cult science’.” (Clower, 1994, p. 809) *

Unfortunately, your idea of the scientific method is also squarely beside the point. You say. “But a scientific method ... achieves an explanation by meticulously piecing together the evidence.”

No, the sequence of evidence and theory is just the other way round. “Indeed, there is no such thing as an uninterpreted observation, an observation which is not theory-impregnated.” (Popper, 1994, p. 58) **

Economists should know this because already J. S. Mill told them that naive empiricism is bound to fail.

“Since, therefore, it is vain to hope that truth can be arrived at, either in Political Economy or in any other department of the social science, while we look at the facts in the concrete, clothed in all the complexity with which nature has surrounded them, and endeavour to elicit a general law by a process of induction from a comparison of details; there remains no other method than the à priori one, or that of ‘abstract speculation’.” (Mill, 1874, V.55)

With ‘abstract speculation’ Mill did, of course, not advocate the green cheese assumptionism that is characteristic of Orthodoxy. Think of all those nonentities like utility, equilibrium, well-behaved production functions, decreasing returns, rational expectations, supply/demand functions, etcetera. These items are not the object of abstract scientific speculation but of hallucination.

With regard to methodology, J. S. Mill understood already what neither the freshwater nor the saltwater cargo cult scientists understand to this very day.

Egmont Kakarot-Handtke


References
Clower, R. W. (1994). Economics as an Inductive Science. Southern Economic Journal, 60(4): 805–814.
Mill, J. S. (1874). Essays on Some Unsettled Questions of Political Economy. On the Definition of Political Economy; and on the Method of Investigation Proper To It. Library of Economics and Liberty. URL
Popper, K. R. (1994). The Myth of the Framework. In Defence of Science and Rationality., chapter Science: Problems, Aims, Responsibilities, pages 82–111. London, New York, NY: Routledge.

* The Farce That Is Economics: Richard Feynman On The Social Sciences
** Appearances and evidence see alternatively here