January 1, 2015

Where is Sam L. Savage at home?

Addendum to Peter Dorman’s/Lars Syll’s comment on 'Lies that economics is built on'


“Remember that a model is not the truth. It is a lie to help you get your point across. And in the case of modeling economic risk, your model is a lie about others, who are probably lying themselves.” (Sam L. Savage, see Blog-Reference)

A model is a mental construct that touches reality at crucial points. It has correctly been pointed out that a model is like a map and that, trivially, the map is not the landscape.

While there is a consensus that the map is different from the landscape, the question is to what degree.

“Can any model be true? I do not think so. Any model, whether in physics or in the social sciences, must be an over-simplification. ... I think we have to admit that most successful scientific theories are lucky over-simplifications.” (Popper, 1994, pp. 172-173)

Physicists can be proud of many lucky over-simplifications that come reasonably close to the ideal of truth.

In economics things are different. Here we have first to discriminate between political economics and theoretical economics. In political economics, it may happen quite often that a model “is a lie to help you get your point across.” Theoretical economics, on the other hand, complies with scientific standards.

To recall, it was the ancient Greeks who first introduced the distinction between doxa and episteme, opinion and knowledge. And then they drew the line of demarcation between non-science and science. Any doubts where they would have situated political economics? And where they would have situated Sam L. Savage's rhetorical shell game?

Egmont Kakarot-Handtke

Popper, K. R. (1994). The Myth of the Framework. In Defence of Science and
Rationality. London, New York, NY: Routledge.