July 7, 2015

In science, NO is the answer

Comment on Paul Schächterle on ‘In Greece, NO is the answer’


OK then, here is my final comment.

You say: “The collection of knowledge about particular facts *is* part of science. On what basis could you otherwise come up with theory?”

Yes, this is an essential part of science and I never characterized science as a fact-free armchair phantasy. I agree with you that utility theory is a fact-free armchair phantasy, and general equilibrium theory too, DSGE, and so on. That is why Orthodoxy is not a science.

But a scientific fact is not what you get by simply looking out of the window or into the newspaper. The physicists never saw a quant but arrived at this ultimate reality by a long, long chain of theoretical reasoning. So you need a theory to get hold of reality. You cannot ‘see’ the economy without a theory.

This is what J. S. Mill told economists. “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)

And this is what Popper said. “Indeed, there is no such thing as an uninterpreted observation, an observation which is not theory-impregnated.” (Popper, 1994, p. 58)

And this is what Marx already knew: "That in their appearance things often represent themselves in inverted form is pretty well known in every science except political economy.” (Marx, 1906, VI.XIX.7)

So, what we can agree upon about Orthodoxy and Heterodoxy and political economics is this: “If one takes seriously what Popper says about falsifiability and the critical attitude, then the methodological practice of economics is not only mistaken, it is stupid and intellectually reprehensible.” (Hausman, 1992, p. 275)

Is this acceptable to an economist with a scientific conscience? NO is the answer!

Egmont Kakarot-Handtke

Hausman, D. M. (1992). The Inexact and Separate Science of Economics. Cambridge: Cambridge University Press.
Marx, K. (1906). Capital: A Critique of Political Economy, Vol. I. The Process of Capitalist Production. Library of Economics and Liberty. URL
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, 82–111. London, New York: Routledge.

Regarding politics see also here and here