Comment on Lars Syll/Alan Musgrave on ‘The logical fallacy that good science builds on’

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The scientific method is well-defined: “Research is in fact a continuous discussion of the consistency of theories: formal consistency insofar as the discussion relates to the logical cohesion of what is asserted in joint theories; material consistency insofar as the agreement of observations with theories is concerned.” (Klant)

Logical consistency is secured by applying the axiomatic-deductive method and empirical consistency is secured by applying state-of-art testing.

Both, orthodox and heterodox economists claim to do science but obviously lack any deeper understanding. Feynman put it thus: “They’re doing everything right. The form is perfect. ... But it doesn’t work. ... So I call these things cargo cult science, because they follow all the apparent precepts and forms of scientific investigation, but they’re missing something essential.”

What is missing is a proper understanding of what science is all about. Lars Syll, the heterodox chief methodologist, puts up this straw man: “Scientific arguments are not analytical arguments, where validity is solely a question of formal properties. Scientific arguments are substantial arguments. If Robert Lucas is a Keynesian or not, is nothing we can decide on formal properties of statements/propositions. We have to check out what the guy has actually been writing and saying to check if the hypothesis that he is a Keynesian is true or not.”

This is as sylly as one can get. Science has NEVER been formal logic alone, that is, drawing conclusions from premises without regard to the empirical content of the premises: “In the most fruitful applications of mathematics to the physical world, some nonmathematical axioms also enter. The Newtonian system of mathematical mechanics depends as much on the Newtonian laws of motion and gravitation as it does on the axioms of mathematics.” (Kline)

Both, material and logical consistency have to be established by proof. This, of course, is the hard part of science. The most impressive kind of proof is to derive a logical conclusion from the theory about a hitherto UNKNOWN fact and then to look specifically for it and actually find it. This is the triumph of the perfect hand-in-glove-fitting of material and formal consistency.

“Thirty years after Laplace wrote this apotheosis of mechanics, something happened that tended to prove that mechanics has the power over existence as he described it. In 1846 a French astronomer, Urbain Leverrier, at the end of some calculations in which he confronted the astronomical observations of the known planets with the results of an appropriate mechanical system, was led to proclaim that there existed a still unknown planet, which, moreover, must be visible in a certain region of the sky. Direct observation of that region soon confirmed the existence of that planet, now called Neptune. Neptune, therefore, was discovered not by scanning the firmament with telescope, but ‘at the tip of a pencil’.” (Georgescu-Roegen)

The deduction of hitherto unknown facts is the very opposite of the realists’ flat-earth methodology: “In inference to the best explanation we start with a body of (purported) data/facts/evidence and search for explanations that can account for these data/facts/evidence. Having the best explanation means that you, given the context-dependent background assumptions, have a satisfactory explanation that can explain the fact/evidence better than any other competing explanation — and so it is reasonable to consider/believe the hypothesis to be true.” (See intro)

Not much has been achieved with this methodology. Indeed, it is the very characteristic of Heterodoxy that it talks much about methodology and ontology and philosophy instead of presenting a spectacular new insight as the direct result of their purportedly superior approach.

Heterodoxy simply conflates the axiomatic-deductive method with mathematics: “Deductive logic may work well — given that it is used in deterministic closed models! In mathematics, the deductive-axiomatic method has worked just fine. But science is not mathematics.” (See intro)

No, it is not and never was. It has always been empirical: “But the axioms Science is the attempt to make the chaotic diversity of our sense-experience correspond to a logically uniform system of thought.” (Einstein)

More precisely: “The basic concepts and laws which are not logically further reducible constitute the indispensable and not rationally deducible part of the theory. It can scarcely be denied that the supreme goal of all theory is to make the irreducible basic elements as simple and as few as possible without having to surrender the adequate representation of a single datum of experience.” (Einstein)

In marked contrast to Heterodoxy, Orthodoxy never had any qualms with axiomatics: “In particular, it is supposed, in the main, that there is perfect competition and that the choices of economic agents can be deduced from certain axioms of rationality.” (Arrow, Hahn)

The cargo cultist failure of Orthodoxy is the inability to see that a behavioral assumption like rationality is inadmissible as an axiom because its reality content is zero. Therefore, the whole of Walrasian economics from utility maximization to DSGE/RBC is indeed ― as Heterodoxy always criticized ― an empirically vacuous logical exercise. This, though, is NOT the fault of the axiomatic-deductive method but a misapplication by methodologically incompetent economists.

The characteristic of science is to start with a consistent set of elementary concepts, e.g. mass, force, energy, velocity, acceleration etcetera, because: “The only way to arrive at coherent languages is to set up axiomatic systems implicitly defining the basic concepts.” (Schmiechen)

As Hilbert put it: “The axiomatic method is indeed and remains the one suitable and indispensable aid to the spirit of every exact investigation no matter in what domain; ... To proceed axiomatically means in this sense nothing else than to think with knowledge of what one is about.”

Until this very day, neither Orthodoxy nor Heterodoxy got the basic economic concepts profit and income right. And this is why economics is still on the proto-scientific level of incoherent blathering with NO idea ‘of what one is about’.#2

Egmont Kakarot-Handtke

#1 Heterodoxy and the re-invention of science

#2 If it isn’t macro-axiomatized, it isn’t economics

Related 'The end of traditional Heterodoxy in the Malmö coal pit' and 'The scientific self-elimination of Heterodoxy' and 'Pants kicking is over, let’s do serious economics now'. For details of the big picture see cross-references Axiomatization and cross-references Paradigm Shift.