Critical rationalism
from Lars Syll
For realists, the name of the scientific game is explaining phenomena, not just saving them. Realists typically invoke ‘inference to the best explanation’ [IBE] …
What exactly is the inference in IBE, what are the premises, and what the conclusion?
The intellectual ancestor of IBE is Peirce’s abduction:
The surprising fact, C, is observed.
But if A were true, C would be a matter of course.
Hence, … A is true.Here the second premise is a fancy way of saying “A explains C”. Notice that the explanatory hypothesis A figures in this second premise as well as in the conclusion. The argument as a whole does not generate the explanans out of the explanandum. Rather, it seeks to justify the explanatory hypothesis …
Abduction is deductively invalid … [but] there is a way to rescue abduction and IBE … What results, with the missing premise spelled out, is:
It is reasonable to believe that the best available explanation of any fact is true.
F is a fact.
Hypothesis H explains F.
No available competing hypothesis explains F as well as H does.
Therefore, it is reasonable to believe that H is true.This scheme is valid and instances of it might well be sound. Inferences of this kind are employed in the common affairs of life, in detective stories, and in the sciences …
People object that the best available explanation might be false. Quite so – and so what? It goes without saying that any explanation might be false, in the sense that it is not necessarily true. It is absurd to suppose that the only things we can reasonably believe are necessary truths …
People object that being the best available explanation of a fact does not prove something to be true or even probable. Quite so – and again, so what? The explanationist principle – “It is reasonable to believe that the best available explanation of any fact is true” – means that it is reasonable to believe or think true things that have not been shown to be true or probable, more likely true than not.
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Real-World Economics Review Blog 
I would argue that it is not reasonable to believe that the best (currently) available explanation for a so-called “fact” is true. Particularly so, since some economnists (not fully dialed in with the real world) seem to think that “It’s reasonable for me to believe this” is the same as “This is true.” People’s ideas of what is reasonable vary all over the map so in general when someone says it’s reasonable to believe something all they are really saying is that for one reason or another (often unstated) they prefer to believe it so they can treat it as if it were true. Much – perhaps most – of what economists believe to be true is, in fact, not true. There’s a lot hidden behind that formulation “the. best available explanation”. Who says what’s available? Who says one explanation is the best? And doesn’t ‘best available” suggest that another better explanation may be just around the corner? Of course it does!
Even if there are at present neither proven alternative explanations nor better unproven ones, simply because something appears ‘reasonable’ (whatever that is), is not a basis for concluding that it is true or “more likely true than not”.
Naturally, we are better off with proven explanations. And, if we have nothing better than unproven ones then, of course, we have no choice but to play the cards we were dealt. But that doesn’t make something true that isn’t.
More importantly, in this situation it’s not so much what’s true as what’s helpful. My background is medicine. The explanation for the action of many medications is unknown. But nonetheless good use is made of them. Instead of getting hung up over truth or explanations, focus on milking the benefit of what you have, irrespective of whether or not you can explain it. I see no reason why this can’t apply as well in economics.
So the best explanation for the factual non-neutrality of money Keynesians can come up with is that something created out of nothing is a physical store of value? Money is what money does? Please correct me if I’m wrong. But in the absence of the latter it seems to me that the best explanation for money’s non-neutrality is because established institutions make it a fact. Popper’s quote is indeed apt.
It appears to me that most Economists are so obsessed with useless theories and making them into acronyms to play with (prove v disprove, etc.) that they lose the main points of it all. I suggest they do learn from medicinal knowledge which is based on thousands of years of experimentation to improve life quality. Perhaps we can write a new book entitled “When Will Seeing Be Equal To Believing – A New Handbook On Basic Economics”. Because as far as I can see, they are throughly oblivious to the importance of seeing what surrounds humanity. At the cost of repeating the broken record again: unprecedented polarisation on all fronts….
I don’t think it’s fair to say that real Keynesian, as opposed to the bastard variety or Mainstream (which indeed would be most), economists are ”throughly oblivious” to the reality that surrounds humanity, Helen. I think they’re at least trying hard to make a difference with the toolbox they’ve got. Unfortunately, regardless of the considerable skill necessary to apply them, both their methods are unconvincing and their tools are highly inadequate to get the job done. The end result being no more than a petty discourse, I’m afraid, of the Keynesian pot calling the Mainstream kettle black.
Economics is far from being as complicated as medical knowledge. Science is a study of the physical and natural world using theoretical models and data from experiments or observations. But, as a human-made system of accounts, there is nothing physical nor natural about an economy; and experimentation is just as unnecessary as it would be for accountants to endlessly experiment as to how to best apply the principles of their profession. Economists ought to be no more than macro-accountants; which is a sentiment that the MMT economist Wray, apparently supports as well.
“That’s all very well in fact, but, does it work in theory?”
steve keen is fond of this old joke about an incredulous economist.
“H” above is what is called a working hypothesis. another way of sneaking in badly drawn working hypothesis’ is the Precautionary principle, beloved of Climate change alarmists everywhere and exponents of the war on terror.
Pierce is credited with this Dadaesque quote by Louise Hack in we pragmatists.
´´In order to reason well …. it is absolutely necessary to possess … such virtues as intellectual honesty and sincerity and a real love of truth (2.82). The cause [of the success of scientificinquirers] has been that the motive which has carried them to the laboratory and the field has been a craving to know how things really were … (1-34).[Genuine inquiry consists I in diligent inquiry into truth for truth’s sake(1.44), … in actually drawing the bow upon truth with intentness in the eye, with energy in the arm (1.235). [When] it is no longer the reasoning which determines what the conclusion shall be, but … the conclusion which determines what the reasoning shall be … this is sham reasoning…. The effect of this shamming is that men come to look upon reasoning as mainly decorative…´´.
Click to access Peirce-Rorty-Haack.pdf
Pierces seminal essay How to make our ideas clear is also a great starting off point for embracing such truth as we might be fortunate enough to encounter in our allotted time on this blue marble suspended in eternity.
http://www.peirce.org/writings/p119.html
It is necessary to judge not merely by rhetoric but by quantitative theories being aligned with empirical facts.
Science does NOT seek to establish some form of absolute truth. It seeks to discover what remains when hypotheses are tested against empirical evidence and rejected if they do not conform to that evidence. So what remains is not-falsified by the empirical evidence. If economists practised this methodology, they would discover only a handful of theories remained in place. BUT then they would have to accept their previous errors — a consummation devoutly NOT to be wished!
In reply to Frank Salter January 28,2019 at 8:29 am
Although ii have had limited formal education, but along life of practical experience where I have gained a considerable amount of practical empirical evidence, I firmly believe that has to be evaluated against scientific theory. In the same way I believe from experience that your explanation of the necessity to test hypotheses against empirical evidence in order to find the truth hits the nail on the head. Failure to adapt this attitude in my opinion reduces puffed up economists and academics to perpetrator’s of false assumptions.
On basis I congratulate you for your short but clear explanation of the importance of testing a hypotheses against empirical evidence. Then as you state the challenge for those so called scientists is to be humble enough to admit that they have made mistakes in the past. Here in my opinion admitting one has made a mistake, is part of the process of improving ones knowledge. Ted
I forgot to add Lars Syll’s post January 27,2019 True ignorance is not the absence of knowledge, but the refusal to acquire it. Karl Popper Thus it is up to the individual to prove they are not ignorant and balance with empirical evidence. Ted
With respect John, the main difference between economic and medicinal knowledge is the refusal of the former to grow up! It might be waiting for some kind of sign from some Kingdom.
I remain sceptical.
I apologise for any techno problems…This may or may not be a double comment.
Writing a blog is also about curation especially when one changes hosting site.
I have diligently made sure all the links work in this post and the links in the posts to which it links have also been updated.
This post is around the work I have done over the past two years on Energy Metrics for Monetary units of account. The abstract basis of money renders it an apotheosical tool of circular inductive reasoning.
It helps to have access to original sources, so thank you Roger for the link to Peirce’s writings, and its reference back to Aristotle. That was quite early (1878) so I wondered if he came closer to Lars’ Syll’s explanation of abduction. The wording of that reminded me of N R Hanson’s “Patterns of Discovery” (1958, Cambridge), in which (it having been a long time since I read it) I was surprised to find this whole discussion (and the way I have interpreted the logic labels myself since 2003) spelled out in part B of Hanson’s chapter on “Theories”: p.84 ff. Contra Frank here,
“Perceiving the pattern in phenomena is central to their being ‘explicable as a matter of course’. This the significance of any blob or line in earlier diagrams eludes one until the organisation of the whole is grasped; then this spot, or that patch, becomes understood as a matter of course. … Pattern statements are different from detail statements. They are not inductive summaries of details statements. [I call this ‘reduction’, since Peirce rightly explains ‘induction’ as quality control: “it measures the degree of concordance of theory with fact”]. … I can show you your error if you say ‘four feathers’. But I cannot thus disclose your ‘error’ in saying of the bird-antelope that it is a bird (instead of an antelope). … Still, the statement ‘It’s a bird’ is truly empirical”. This is all about scientific gestalts being logical.
Via Roger’s link, Peirce says one type of reality is outside our mind, another inside it. Here, “If the detail statements are empirical, the pattern statements which give them sense are also empirical – though not in the same way”. Hanson draws what seems to me an important distinction between ‘contiguous’ and Whewell’s word ‘colligation’.
I will have to leave it at that, but I commend Hanson as a fascinating read.
Hanson’s book is a classic well worth reading!
Apologies dear Lars, you are amongst us. It is heartwarming.
I cant resit the Taboo of Frederick Soddy
https://web.archive.org/web/20180413050101/http://www.pballew.net:80/soddy.html
The Kiss Precise
by Frederick Soddy
For pairs of lips to kiss maybe
Involves no trigonometry.
‘Tis not so when four circles kiss
Each one the other three.
To bring this off the four must be
As three in one or one in three.
If one in three, beyond a doubt
Each gets three kisses from without.
If three in one, then is that one
Thrice kissed internally.
Four circles to the kissing come.
The smaller are the benter.
The bend is just the inverse of
The distance from the center.
Though their intrigue left Euclid dumb
There’s now no need for rule of thumb.
Since zero bend’s a dead straight line
And concave bends have minus sign,
The sum of the squares of all four bends
Is half the square of their sum.
To spy out spherical affairs
An oscular surveyor
Might find the task laborious,
The sphere is much the gayer,
And now besides the pair of pairs
A fifth sphere in the kissing shares.
Yet, signs and zero as before,
For each to kiss the other four
The square of the sum of all five bends
Is thrice the sum of their squares.
In _Nature_, June 20, 1936
https://archive.org/details/roleofmoney032861mbp/page/n4
Roger, thank you so much for this! Carmen had helped me appreciate Frederick Soddy, but here you have him anticipating the spherical mathematics of my economic theory before I was born! (The very ontological theory, incidentally, that Yoshinori seems to have despised).
Your first link has got itself attached to another. It was well worth extracting and following, for it gives a nice appreciation of the significance of Soddy as well as taking the mathematics back to Descartes, the inventor of orthogonal coordinates. Absolutely fundamental stuff, though Keynes’ non-Euclidian geometry doesn’t look like economics to economists.
One little caution, Roger. See the Guideliness for Comments below the book adverts on the right: “Try not to flood discussion threads with only your comments”.
Helen, yes! I too am delighted to find Lars is still alive!