March 24, 2016

Economics between truth and blather

Comment on Lars Syll on ‘Science and truth’


“In order to tell the politicians and practitioners something about causes and best means, the economist needs the true theory or else he has not much more to offer than educated common sense or his personal opinion.” (Stigum, 1991, p. 30)

Economists who are well aware that they, unfortunately, have missed the true theory, like Robert Aumann and other representatives of Orthodoxy, have not many alternatives — short of simply admitting failure — than to argue that there is no such thing as truth. These people then become histrionic and pose Pilate’s famous question ‘What is truth’.

What these pseudo-philosophers overlook is that scientific truth is well-defined as formal and material consistency (Klant, 1994, p. 31). “So the idea of truth (of an ‘absolute’ truth) ... is our main regulative idea.” (Popper, 1994, p. 161)

Genuine scientists have no problem with the concept of scientific truth but it has always been a big issue in the so-called social sciences, which Feynman famously characterized as cargo cult sciences.

It is pretty obvious that neither orthodox nor heterodox economists have developed the true economic theory. Economics is still at the proto-scientific stage: “Within the whole of his [the economist’s] science, or what he insists on calling science, no generally recognised result is to be found, as is also the case for theology and for roughly the same reasons; there is no single doctrine taken to be a scientific truth without the diametrically opposed view being similarly upheld by authors of high repute.” (Wicksell, in Deane, 1983, p. 8)

One possible reaction to this embarrassment is to give up the idea of objective truth in economics. This attitude is rather popular among heterodox economists — and it is self-defeating. “If economics cannot aspire to any substantive knowledge of economic relationships, it cannot speak with authority about questions of economic policy.” (Blaug, 1990, p. 111). Without this aspiration, economics degenerates to mere opinion, pluralism of false theories, and in the last consequence to brain-dead political blather.

The idea of truth has an implication for scientific debate that no blatherer can ever accept: if you do not have the true theory you better shut up. Blatherers, therefore, resort to questioning what NO genuine scientist ever questions because it defines his mission.

For economists the mission is clear since J. S. Mill: “Science is a collection of truths; art, a body of rules, or directions for conduct. The language of science is, This is, or, This is not; This does, or does not, happen. The language of art is, Do this; Avoid that. Science takes cognizance of a phenomenon, and endeavours to discover its law; art proposes to itself an end, and looks out for means to effect it.” (1874, V.8)

Egmont Kakarot-Handtke

Blaug, M. (1990). Economic Theories, True or False? Aldershot, Brookfield, VT: Edward Elgar.
Deane, P. (1983). The Scope and Method of Economic Science. Economic Journal, 93(369): 1–12. URL
Klant, J. J. (1994). The Nature of Economic Thought. Aldershot, Brookfield, VT: Edward Elgar.
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 Models, Instruments, and Truth, pp. 154–184. London, New York, NY: Routledge.
Stigum, B. P. (1991). Toward a Formal Science of Economics: The Axiomatic Method in Economics and Econometrics. Cambridge, MA: MIT Press.