Home > Uncategorized > Keynes’ critique of scientific atomism

Keynes’ critique of scientific atomism

from Lars Syll

The kind of fundamental assumption about the character of material laws, on which scientists appear commonly to act, seems to me to be much less simple than the bare principle of uniformity. They appear to assume something much more like what mathematicians call the principle of the superposition of small effects, or, as I prefer to call it, in this connection, the atomic character of natural law. 3The system of the material universe must consist, if this kind of assumption is warranted, of bodies which we may term (without any implication as to their size being conveyed thereby) legal atoms, such that each of them exercises its own separate, independent, and invariable effect, a change of the total state being compounded of a number of separate changes each of which is solely due to a separate portion of the preceding state. We do not have an invariable relation between particular bodies, but nevertheless each has on the others its own separate and invariable effect, which does not change with changing circumstances, although, of course, the total effect may be changed to almost any extent if all the other accompanying causes are different. Each atom can, according to this theory, be treated as a separate cause and does not enter into different organic combinations in each of which it is regulated by different laws …

The scientist wishes, in fact, to assume that the occurrence of a phenomenon which has appeared as part of a more complex phenomenon, may be some reason for expecting it to be associated on another occasion with part of the same complex. Yet if different wholes were subject to laws qua wholes and not simply on account of and in proportion to the differences of their parts, knowledge of a part could not lead, it would seem, even to presumptive or probable knowledge as to its association with other parts. Given, on the other hand, a number of legally atomic units and the laws connecting them, it would be possible to deduce their effects pro tanto without an exhaustive knowledge of all the coexisting circumstances.

Keynes’ incisive critique is of course of interest in general for all sciences, but I think it is also of special interest in economics as a background to much of Keynes’ doubts about inferential statistics and econometrics.

Since econometrics doesn’t content itself with only making ‘optimal predictions’ but also aspires to explain things in terms of causes and effects, econometricians need loads of assumptions. Most important of these are the ‘atomistic’ assumptions of additivity and linearity.

overconfidenceThese assumptions — as underlined by Keynes — are of paramount importance and ought to be much more argued for — on both epistemological and ontological grounds — if at all being used.

Limiting model assumptions in economic science always have to be closely examined since if we are going to be able to show that the mechanisms or causes that we isolate and handle in our models are stable in the sense that they do not change when we ‘export’ them to our ‘target systems,’ we have to be able to show that they do not only hold under ceteris paribus conditions and a fortiori only are of limited value to our understanding, explanations or predictions of real economic systems.

Econometrics may be an informative tool for research. But if its practitioners do not investigate and make an effort of providing a justification for the credibility of the assumptions on which they erect their building, it will not fulfill its tasks. There is a gap between its aspirations and its accomplishments, and without more supportive evidence to substantiate its claims, critics like Keynes — and yours truly — will continue to consider its ultimate argument as a mixture of rather unhelpful metaphors and metaphysics.

The marginal return on its ever higher technical sophistication in no way makes up for the lack of serious under-labouring of its deeper philosophical and methodological foundations that already Keynes complained about. Firmly stuck in an empiricist tradition, econometrics is only concerned with the measurable aspects of reality, and a rigorous application of econometric methods in economics really presupposes that the phenomena of our real world economies are ruled by stable causal relations.

But — real world social systems are not governed by stable causal mechanisms or capacities. The kinds of ‘laws’ and relations that econometrics has established, are laws and relations about entities in models that presuppose causal mechanisms being atomistic and additive. As Keynes argued, when causal mechanisms operate in the real world they only do it in ever-changing and unstable combinations where the whole is more than a mechanical sum of parts. If economic regularities obtain they do it as a rule only because we engineered them for that purpose. Outside man-made ‘nomological machines’ they are rare, or even non-existant.

  1. April 8, 2016 at 8:39 pm

    Have you heard of Schrodinger’s cat? It was a gedanken experiment that propelled quantum physics to the forefront. Economists are in a similar quandary. A simpler example from physical science might be if a scientist tried to explain why a particular half of a radioactive substance transformed itself in the period of time called the half life and the other half didn’t. What was it with some of those atoms that caused therm to change while the others did not change. Perhaps economists should study some quantum physics. And by the way, I enjoy reading your material and thank you for posting it here.

  2. David Chester
    April 9, 2016 at 3:09 pm

    That’s right, we need to cover the big picture as a whole without creating seams between its various parts and without assuming that when one is being studied all the others are fixed.

  3. David Chester
    April 9, 2016 at 3:11 pm

    However Schrodinger’s cat has no connection–its all about the possible change in one variable and fails to consider the whole shebang. Sorry Charles!

    • April 11, 2016 at 9:41 pm

      David, classical physics was based on the principle that knowing the initial conditions of a system one could predict the system parameters at any later time. Schrodinger’s cat experiment proved that was not true. You must look to see the result. You cannot predict the outcome knowing everything about the initial conditions. I think that is very much like the status of economics modeling.

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