March 30, 2016

There is no truth in political economics

Comment on Asad Zaman on ‘On the Truth of Scientific Theories’


It is, first of all, of utmost importance to distinguish between political and theoretical economics. The main differences are:
(i) The goal of political economics is to push an agenda, the goal of theoretical economics is to explain how the actual economy works.
(ii) In political economics anything goes; in theoretical economics, scientific standards are observed.

Theoretical economics has to be judged according to the criteria true/false and nothing else. Political economists who are dimly aware that they have no true theory — among them many heterodox economists — tend to argue that there is no such thing as truth. What these people overlook is that scientific truth is well-defined as formal and material consistency (Klant, 1994, p. 31). Logical consistency is secured by applying the axiomatic-deductive method and empirical consistency is secured by applying state-of-the-art testing. “So the idea of truth (of an ‘absolute’ truth) ... is our main regulative idea.” (Popper, 1994, p. 161)

The regulative idea of truth has an implication for scientific debate that no blatherer can ever accept: if you do not have some idea of true theory you better shut up: “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 and the commitment to scientific truth economics cannot rise above the actual level of mere opinion, storytelling, pluralism of false theories, and brain-dead political blather.

Egmont Kakarot-Handtke

Blaug, M. (1990). Economic Theories, True or False? Aldershot, Brookfield: Edward Elgar.
Klant, J. J. (1994). The Nature of Economic Thought. Aldershot, Brookfield: Edward Elgar.
Popper, K. R. (1994). The Myth of the Framework. In Defence of Science and Rationality, Chapter Models, Instruments, and Truth, 154–184. London, New York: Routledge.

Immediately following Show first your economic axioms or get out of the discussion.