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My philosophy of economics

from Lars Syll

A critique yours truly sometimes encounters is that as long as I cannot come up with some own alternative to the failing mainstream theory, I shouldn’t expect people to pay attention.

This is, however, to totally and utterly misunderstand the role of philosophy and methodology of economics!

As John Locke wrote in An Essay Concerning Human Understanding:

19557-004-21162361The Commonwealth of Learning is not at this time without Master-Builders, whose mighty Designs, in advancing the Sciences, will leave lasting Monuments to the Admiration of Posterity; But every one​e must not hope to be a Boyle, or a Sydenham; and in an Age that produces such Masters, as the Great-Huygenius, and the incomparable Mr. Newton, with some other of that Strain; ’tis Ambition enough to be employed as an Under-Labourer in clearing Ground a little, and removing some of the Rubbish, that lies in the way to Knowledge.

That’s what philosophy and methodology can contribute to economics — clearing obstacles to science by clarifying limits and consequences of choosing specific modelling strategies, assumptions, and ontologies.

respectEvery now and then I also get some upset comments from people wondering why I’m not always ‘respectful’ of people like Eugene Fama, Robert Lucas, Greg Mankiw, Paul Krugman, Simon Wren-Lewis, and others of the same ilk.

But sometimes it might actually, from a Lockean perspective, be quite appropriate to be disrespectful.

New Classical and ‘New Keynesian’ macroeconomics is rubbish that ‘lies in the way to Knowledge.’

And when New Classical and ‘New Keynesian’ economists resurrect fallacious ideas and theories that were proven wrong already in the 1930s, then I think a less respectful and more colourful language is called for.

  1. Econoclast
    June 18, 2019 at 9:53 pm

    I completely agree with Lars here. I add that, in any field, I don’t believe that critics have any responsibility to offer replacements for what they criticize. Although criticism can be abused, the abuse is not inherent, and criticism alone can serve a useful function.

    Further, one place where a critic is well-advised to be prepared to offer a replacement is sometimes in politics. I worked my entire career opposing bad development. When I worked for or closely with politicians (including two governors), I found that I could get them to “no” more effectively if I was prepared to at least present the alternative idea. By this method, Portland, Oregon’s lauded MAX light rail system was launched.

    “I help to stop bad thing so good things have a chance.”

    • June 20, 2019 at 4:54 pm

      The curious thing is that Locke himself did offer a world changing philosophy in opposition to the one then recently created by Rene Descartes. Neither was science; they proposed different philosophies: points of view with corresponding methodologies, both limited by the understandings and instrumentation of the time.

  2. deshoebox
    June 18, 2019 at 10:16 pm

    Thank you, Mr. Syll. I also think it is entirely appropriate to be disrespectful of Greg Mankiw and other people who think the way he does. I have a recommendation for an alternative to the failed (not just failing) mainstream “theory” of economics. This would be an entirely new construct based on a clear statement of what an economy is and what its fundamental purposes are. At the very least, an economy is an evolving set of traditions, relationships, practices, skills, knowledge, and laws, complex but not impossible to delineate. Every part of it helps determine how it actually works and must be carefully considered. The fundamental purpose of an economy is to provide every person with everything necessary for a dignified and productive life, in such a way that future generations are able to do the same. These ideas may sound rather extreme, given the political climate of the day, but I think most people, once they understood them, would agree that these are good building blocks for a humane and useful theory of economics. Part of the point of starting this way is that the policies, practices, and laws that flow out of these foundational elements would tend toward good public policy, which is the practical face of economics. In case this isn’t clear, tax policy that leads to increasing inequality, for example, is bad public policy, and economic theories that don’t clearly explain why are bad economic theories. Based on the two notions described above – about what the economy is and what its basic purpose is – it is not difficult to prove that tax policy that tends toward greater equality of income and wealth is good. The real world benefits of greater equality are now well-established. If you think economics should not concern itself with what is good and what is bad, you may be in the Mankiw camp and might therefore want to rethink your position.

  3. Ikonoclast
    June 19, 2019 at 1:31 am

    I furiously agree… which might get me criticized here. One of the philosophers we should NOT respect AT ALL on socioeconomic matters is John Locke. If Ayn Rand is to be critiqued as a psychopath (more likely a sociopath) then John Locke ought to be critiqued similarly in my view.

    I’ll quote an Australian economist below on the topic of Locke.

    “A few years ago, I wrote a series of articles in Jacobin showing how Locke’s theory of property, on which most modern propertarianism is based, was entirely consistent with his personal involvement in American slavery and the expropriation of indigenous Americans. Historian Holly Brewer has come to Locke’s defence, pointing to more evidence about Locke’s involvement in American affairs, of which I was previously unaware. I’ve responded, arguing that, far from exonerating Locke, the new evidence shows that Locke was deeply enmeshed in American slavery throughout his life, yet never took a stand against it.” – John Quiggin.

    The excessive possession of private property, along with the integrally included theft, genocide, slavery and colonialism, are part of the intellectual tradition stemming in part from, or legitimated by Locke and running down through the Tories, the propertarians and the neoliberals. We must completely reject these ideas and we also must completely reject Locke as a social and economic thinker. I make no comment here on Locke’s claims or otherwise to be considered a philosopher of empiricism per se.

  4. Yoshinori Shiozawa
    June 19, 2019 at 2:01 am

    Dear Lars Syll

    you have a respectable recognition about your capability. We must admit that it is your virtue.

    You may be right in assuming that we are in the period of the Commonwealth of Learning without Master-Builders. Even though, your mode of thinking may be changed a bit, because even in this period of Economics without master-builders there are always many sincere economists who seek to find some piece of truth. My frustration with your posts is that you are ignoring those economists and that you are discouraging young economists to engage in sincere work trying to find an alternative to mainstream economics. In my impression, you are only producing those pseudo-methodologists who are only idle thinkers and do not try to prepare what is necessary for the advancement of economics.

    To be a humble philosopher-methodologist is good. But that humbleness should not hinder next generation to open a new age of master-builders. What you should do is to prepare a good map for their explorations, encourage them to acquire the necessary equipment and if possible show them a right direction for their explorations.

  5. Econoclast
    June 19, 2019 at 5:41 am

    Completely agree, Ikonoclast.
    In my view a fundamental problem with the power of capital in this culture is Locke’s view on property. It infects today’s racism, sexism, clearcutting forests, fossil fuels, health care, nearly everything.

  6. Frank Salter
    June 19, 2019 at 7:20 am

    It may be simple to criticise but it appears to be impossible to recognise the simple truth. I have presented an analysis of abstract production theory which meets every test of theoretical and empirical validity in my paper, Transient Development. It passes all of Popper and Lakatos’ requirements. It should be accepted However, there appears to be enormous difficulty in the significance of those facts registering with economists. Why?

  7. Robert Locke
    June 19, 2019 at 9:03 am

    “That’s what philosophy and methodology can contribute to economics — clearing obstacles to science by clarifying limits and consequences of choosing specific modelling strategies, assumptions, and ontologies.”

    I disagree entirely with this view. We all live in a specific time and place; the best we can do is to help deal with specificities of our time and place; that’s it, because of the unknown and unknowable. Clausewitz, who wrote on War, about the same time the classical economists wrote, could talk about war as a science of preparation, but he never, because of the unknowable, in terms of human character, social preparation, and just plain luck, thought outcomes could be made predictable or even imaginable, through science. I wrote about this in an article published in the rwer, 2012, economics from smith to von clausewitz. Social science is the erroneous presumption of our age.

  8. June 19, 2019 at 10:29 am

    I too disagree entirely with this view. Taken literally, John Locke is not trying to justify excessive holding of property, rather he is trying to restrict it to what one may work himself, with the primitive technology of his age, and that right of holding dies with him, although it can be passed down to his children. What he didn’t envisage was the doctrine of corporate personhood, and powered machinery capable of working in minutes what would then have taken hours if not years to accomplish. The man was writing about the year 1600, for goodness sake. He seems to have been a thinker rather than a fortune-seeker. Perhaps those who write in these columns should remind themselves of the fallacy of ad hominem.

    • June 20, 2019 at 4:46 pm

      Aopologies for an ambiguity. The “this view ” I was disagreeing with was Ikonoclast’s view of Locke, not Lars’s. I agree with Yoshinori both above and below.

  9. June 19, 2019 at 12:00 pm

    Note that there is a bit of a shell game here, since when an alternative is offered to the mainstream, it will be criticized for not meeting this or that standard is elaboration or precision, with the mainstream held up as the standard of elaboration and precision that must be met. It is therefore quite useful to know that some areas of work in the mainstream, such as dynamic stochastic general equilibrium macroeconomic models, are of no use as macroeconomic models of real world economies, so that it is know that the bar to clear is much lower than the defenders of the mainstream may be pretending.

  10. Ikonoclast
    June 20, 2019 at 12:44 am

    To clarify, I don’t disagree with the particular passage quoted from John Locke. There is a need for the “under-laborer”. I disagree with that part of Lockean philosophy which (still) justifies ownership in the whole Lockean-Tory-propertarian-neoliberal tradition. We are dealing with a pathology very deeply embedded in civilization itself. Indeed, it may go right back to the beginnings of civilization. It was identified in modern times as the “Iron Law of Oligarchy” (Robert Michels) but I will leave that aside for now.

    In turn, I don’t thing Lars Syll is a mere “Under-Labourer” in matters related to “clearing obstacles to science by clarifying limits and consequences of choosing specific modelling strategies, assumptions, and ontologies”. I think he is a more important thinker than that. I am hastening to add this as my first post might look like an undue criticism of Lars Syll. Instead, my target was the John Locke of “An Essay Concerning the True Original, Extent and End of Civil Government”.

    It is always easier, in my view, to be orthodox in any social science field. It is much more exacting to be heterodox if one does one’s work properly. The orthodox take a settled ontology for granted and speak in the same ideational echo chamber as the received and effective authorities. The heterodox have a much harder task and most return to ontology, epistemology and first principles in general (including empiricism). Their reward for all this extra effort is usually to be ignored or pilloried, at least in their own lifetimes.

    There is something I call “extantism”. Unfortunately, this term has already been appropriated in International Law. I won’t give their usage. You can look it up. I would prefer that the term had been retained for philosophical use with a very different definition.

    Extantism (philosophy) – A view that what arises and becomes extant was always the only real possibility inherent in historical emergence and remains the only real possibility. Thus extantism postulates both determinism in previous ages and the end of history in the current age. See “TINA”.

    Orthodoxy in neoliberal political economy is extantism writ large.

  11. Ikonoclast
    June 20, 2019 at 7:05 am

    The case against John Locke is very strong. See;

    “Leave John Locke in the Dustbin of History” – By John Quiggin

    https://jacobinmag.com/2019/03/john-locke-freedom-slavery-united-states/

    This article starts with;

    “The discovery, in the mid-twentieth century, that John Locke had invested in the slave-trading Royal African Company seemed at first like an embarrassing piece of personal hypocrisy for a figure long regarded as the principal theorist of liberalism, particularly that espoused by the Founding Fathers. But the more complete the historical picture we have of Locke, the worse he looks.

    In a series of articles in Jacobin, I’ve summed up the evidence to make the case that, far from being an English political philosopher for whom America provided some convenient theoretical examples, Locke was deeply enmeshed in American affairs. And while in the British context Locke presented himself as a defender of liberty against the (metaphorical) “slavery” involved in submission to Stuart absolute monarchy, in the US he was a consistent theorist of enslavement and expropriation.”

    It’s worth reading the whole article.

    • Robert Locke
      June 20, 2019 at 8:02 am

      Is it impossible for us to judge people in their own times, or is this rule of the historian to be ignored by so-called social scientists constantly. I have a portrait of a negress, a, copy from the Louvre, painted by Madame Benoist, hanging on my wall, painted in 1800, the negress was a slave of the owner, who lived in Nantes. Her husband was a rich entrepreneur, who pioneered ironmaking and finance in France. If I, son of a worker, had appear at his chateau in 1850, I would have been shown the back door for entry. But Benoist d’Azy, who owned slaves, was a pioneer of social catholicism, and established pension rights and health care benefits for his workers at the forges and foundries of Alais. Should I judge him as a slave holder, anti-democrat, that he was, or as he merges, from his correspondence, one of the enlightened of his time. Get serious.

    • June 22, 2019 at 12:19 pm

      Thank you, Robert. That’s what I was saying about John Locke. Ikonoclast, the Essay you refer to is better known here as the secoond of the “Two Treatises of Government”, which as i’ve said is open to your arguments only of you don’t allow for the context of his time. It is said history is written by the victors. After the Reformation, feudalism was despised as virtual slavery, but before it, the right of serfs to their own allotments in exchange for supplying their masters with labour and the duty of the masters to provide community (church) facilities for them was a distinct advance on slaves being property at the disposal of their masters. A great pity the old Roman practices crept back in because of an argument that these strange coloured people being discovered by untutored sailors were not human. Locke however was tutored and so far as I know there is no evidence that he himself was inhuman. His land allocation would have left at least as much to the existing inhabitants.

  12. Yoshinori Shiozawa
    June 20, 2019 at 10:04 am

    Ikonoclast (June 19, 2019 at 1:31 am, June 20, 2019 at 12:44 am, June 20, 2019 at 7:05 am), Econoclast (June 19, 2019 at 5:41 am), and Robert Locke (June 20, 2019 at 8:02 am Reply)

    You are discussing Locke’s theory or philosophy on property. But what Lars Syll posed is a totally different problem. He has cited Locke’s paragraph to show an epistemological point of argument. Please do your arguments when and where they are opportune.

  13. Helen Sakho
    June 21, 2019 at 2:25 am

    Well, a piece of extremely valuable art work got stolen today! We also learned this week that in actual reality the wonderful Notre Dome, which was a true creation of a mastermind and got denotations from all over the world, did not get a Franc or a Euro for its repair from the rich people in France!

    I do not know what value lies in any theory or philosophy that does not reflect today’s dire realities. I will deserve to be criticised heavily if I repeat myself. Therefore, I shall not.

  14. Ken Zimmerman
    June 21, 2019 at 11:51 am

    In his book, The Idea of a Social Science, Peter Winch critiques the social sciences as practiced in the mid- and late-20th century. His criticisms remain relevant today. It is Winch’s view that social scientists’ misconceived aspiration to model their methods of inquiry on the natural sciences is the concern. That aspiration was partly a function of the deserved prestige that their successes had brought to the natural sciences. More fundamentally, however, it was a function of assumptions about what deserved to be called knowledge. In the case of human behavior, as studied by psychology or the social sciences, an important assumption was that we achieve knowledge of human behavior only when we understand its causes as they are revealed in generalizations that cover behavior re-described in suitably theoretical terms. According to Winch, the main trouble with that assumption is not that human behavior is not quantifiable or that generalizations of it cannot be found to support the kind of predictions science demands but that it is symptomatic of a deeper difficulty, which is the failure on the part of the type of social science he criticizes to understand the nature of meaningful behavior. Human behavior is mostly explained by reasons, and reasons, he argues, are not causes of the behavior they explain. To re-describe human actions in ways that makes them plausible candidates for causal generalizations of a kind that might one day achieve the status of causal laws, is not to deepen understanding of the subject matter with which one began, but to lose it altogether. He argues that attention to Wittgenstein’s remarks in Philosophical Investigations, on what it is for speakers of a language to follow the rules of that language, offer a better route to understanding social phenomena.

    Imagine a social scientist who wants to understand the discipline procedures in schools. She thinks that because discipline is a response to behavioral problems it is best seen as a form of ‘behavior modification’. The teachers she is studying, however, do not speak of behavior modification. They are discussing whether they should punish children or encourage better conduct by methods that one of their number is inclined to call ‘bribery.’ Another teacher suggests that they should encourage the peers of offending students to ostracize the student until their behavior improves. Each of these descriptions of what the teachers are contemplating refers not merely to an instrument they might use to modify the behavior of their students, but to actions and what they can mean—‘mean’ in the sense in which we intend it when we say: ‘Don’t you understand what it means to be humiliated in the way children would be if you encouraged their fellow students to disapprove of them?’, or, as one of the teachers might intend it when she says: ‘You call that punishment, but its limits are not set by justice. You don’t know what punishment means. Don’t you see that this encourages children to despise their teachers as hypocrites?’ And so on. It looks as though the understanding the teachers seek of the proposals before them proceeds in the direction of distinguishing the meaning of this action from another in ways that require a sensibility refined by literature as least as much as an intelligence refined by theory, either philosophical or scientific. When it carries the connotations it possesses in ordinary English, the expression ‘behavior modification’ implies manipulation, which is almost always unjust. Obviously, one must have an ear for those connotations. It will not do to be tone deaf. When the phrase tries to slough off those connotations, hoping to become a neutral term in a science of behavior and thereby to find in generality the deepened understanding that generality delivers in the hard sciences, then it impedes rather than advances understanding.

    For a social scientist observing the teachers in the example to achieve a re-description of their actions that would begin to approach causal generalizations of the kind sought in science, a degree of distancing from the language these participants use to describe their actions would be required, a distancing that appears inconsistent with the sensibility necessary to understand what is seriously at issue for the teachers. And this is another point of departure from ‘ordinary language’ philosophy—mastering the concepts of ordinary language, appealing to ‘what we ordinarily say’ is not enough. It is not enough because it will not of itself enable one to understand what is deep and shallow in the teachers’ discussion about justice, about what constitutes bribery, about humiliation and hypocrisy, for example. The subject matter about which the teachers in the example are thinking is of a kind whose description and reflective assessment must admit as indispensable, as intrinsic to its content, judgements that this or that is sentimental, or overtaken by pathos, or banal and, perhaps, in ways partly defined by those concepts, shallow. That means that if our subject matter is what the Europeans call Philosophical Anthropology, then, inescapably, we think in natural languages, rich in historical resonance and allusion, shaped by and shaping the lives of peoples. In philosophy and anthropology, the concepts the teachers use in their discussion are often called ‘thick concepts’. Most of them require one to distinguish, under pain of superficiality, between the real and the counterfeit forms of the actions or feelings that fall under them—between real courage and recklessness, real love and infatuation, for example. Such a distinction between the real and the counterfeit is implied when the teacher in the example exclaims: ‘You call that justice? You call that encouragement?’. Exploration of this way of distinguishing appearance from reality seldom appeals to science. More often it appeals, even if indirectly, to art; not to ordinary language but to extraordinary language, as one finds in poetry, for example, or at any rate, to language ‘used at full stretch’, as Cora Diamond puts it. Or, in the ethnographies of anthropologists.

  15. Ikonoclast
    June 22, 2019 at 1:47 am

    The title of the original post is “My philosophy of economics”. That leaves a very wide field for response as Ken Zimmerman has well illustrated. I agree with Lars Syll that philosophy and methodology can contribute to economics. Political economy is properly a branch of moral philosophy. Our problems arose, in many senses, when political economy was bowderlized into mere economics. It was the attempt to scientize a single ideology of political economy, which attempt inevitably turned into scientism; defined as “the cosmetic application of science in unwarranted situations not amenable to application of the scientific method or similar scientific standards” [- Wikipedia].

    Conventional economics most typically claims to be the discipline of “utilizing scarce resources to meet unlimited wants.” This may be termed the founding postulate of conventional economics. There are probably a hundred ways to unpack this absurdity but one has to limit oneself in a short blog. If unlimited wants are to be met this immediately posits endless growth. Endless growth on a finite planet is impossible. Thus, the founding postulate of economics is easily refuted empirically. Anyone of a scientific or philosophical mind would then immediately throw out the entire discipline. The founding postulate is scientifically refutable. Every deduction from a false founding postulate must be false in turn (except for those relatively rare cases where two or more deductive errors directly cancel out). In practice, under this form of economics, we see how the unlimited wants of a minority are prioritized over the reasonable needs of the many.

    If we put aside the issue of limits, by deluding ourselves that the limits are not near, we can then consider the issue of the allocation of (intrinsically) scarce resources. The sole meaning of conventional economics is thus reduced to quantity surveying. Sic! Such I said and intended to say! Economics becomes a mere quantity surveying discipline sans ethics other than the ethic to “meet unlimited wants”. In turn “unlimited wants” means “greed”. As Ken Zimmerman points out above, language matters. Sometimes ordinary language matters more, is more direct and honest, than the glozing lies of academic language in false disciplines like conventional economics.

    Conventional economics manages to be both faux-scientific and faux-moral at the same time. The faux-moral aspect arrives in the conceit that morality can be subjected to precise nominal calculations. All calculation of what must be done in every sphere of society, or what is deemed possible or or possible, is arrived at via calculations running through the cash nexus. Rewards arrived at by the economic algebra are deemed ipso facto to be just rewards. In the unfettered market, every wage is just, every return on investment is just and the destruction of the natural world is just. If the word “inevitable” were substituted for the word “just” I would agree. Yes, the outcomes are inevitable under the current juridical construction of property and reward (an algorithmic system) and the invariable algebra (accounting rules) of constructing society seemingly by quantity surveying and nothing more.

    Of course, there is still more than capitalist quantity surveying left in the world. Capitalism is not free standing. It stands on the natural world. It stands on the human world, including the human ideational world of cultures, morals, science, art, philosophy and language. Capitalism seeks to convert all of these into itself. But in seeking to convert all its supports to itself it removes these very supports. Capitalism of the present form must totalize or collapse. The process allows of no middle ground.

    • Ken Zimmerman
      June 22, 2019 at 9:22 am

      Ikonoclast, as my excursion into Winch shows, economics can be scientific. How to do it is the question. So far, few have even examined that question. Much less formulated answers that can be debated. Also, if economics is made scientific how useful is it? The science of economics may be unable to provide potential answers to the questions people want answered, or possible solutions for the problems that people see confronting them. Cultural and historical study is necessary to find this out, and to grasp when and how people speak and take action about such problems.

      Second, sciences such as economics are not lying. They simply create different facts using a language not useful or even comprehensible for many non-scientists or even scientists who are not economists. Again, the criterion is usefulness. Is economics the science useful and for whom? Currently, data seems to indicate economic science creates theories and facts useful for only a small, but well positioned minority in most western societies, particularly the USA. This shows up in some peculiar particulars of economic science. First, for economic scientists no empirical data is ever ambiguous. Second, and similar, for the economic scientist theory flows directly onto the pages of every piece of research. Finally, as in the words of the Fiji Water commercial, “never touched by human hands,” according to economic scientists their analysis is never touched by human judgments. Yet, all who’ve studied the practice of science agree that its results are drawn from a complicated blend of judgments about ambiguous empirical evidence, normative judgments, and sensibilities that may be framed, but are not determined, by scientific theory. Economic science is at best delusional, and at worst a deliberate effort to deceive.

      Third, wants may be unlimited, but that is not necessarily a directing criterion in making decisions about allocations of resources. In our world today political power, status, and prestige are more important factors in such allocations. We need to understand what people in this certain time and this certain culture consider important and why. This will be more useful in helping us figure out how decisions are made. For example, till just a few years ago more scientific research funding went to erectile dysfunction than Alzheimer’s disease. Why? To answer this question, we can again follow Winch. People think and act in thick languages, natural languages, rich in historical resonance and allusion, shaped by and shaping the lives of peoples. Not viewable or reachable from the outside. To know what’s being said and about actions taken you must be on the inside of these languages.

      Fourth, some limits always exist and some of these get a lot of attention (e.g., electricity use) and some very little (atmospheric pollutants). Why? Limits are always culturally established. So, how is the culture in question created? By whom, for whom, over what period, in what place, involving what history, and how strong or weak is the culture?

      In western culture today, capitalism is free standing. There are externalities, e.g., preferences, natural inputs, unexpected and/or wanted outputs (e.g., pollution, death), but in western culture today these are not part of capitalism. That’s why it’s difficult to change these non-capitalist events by going through capitalism. We’ve been systematically taught (socialized) not to see or consider any such links. Capitalism makes us rich. Some of us, anyway. These other events are separate problem areas that sometimes can be addressed by applying capitalism, sometimes not, but are not in themselves part of the being of capitalism. Over the period of 300 years capitalists and economists representing capitalism have created thick and high walls to protect capitalism and capitalists. A wall that over the last 50 years has been corrupted significantly, but is not yet crumbling.

      • Ikonoclast
        June 22, 2019 at 11:08 am

        Definitions are always important. When I use the term science, I strictly mean hard science only. Thus, in my lexicon, the social sciences should rather be termed the humanities. They are not, strictly speaking, sciences.

        Karl Popper referred to three kinds of facts;

        (1) Natural or objective facts;
        (2) Formal facts;
        (3) Conventional facts.

        This means;

        (1) Facts from nature which are quantifiable in the seven SI Base units or their direct derivatives, to a given degree of certainty, verifiable (strictly speaking not yet refuted) through repeatable experiment. The certainty required formally is the 5-sigma standard (99.999% certainty, rounded to four decimal places.)

        (2) Formal facts are facts true in a given formal or axiomatic system . Humans create a formal or axiomatic system and then derive “in-system” facts from it. Legal Law and Economics fall into this “genre” of knowledge if I may use that term.

        (3) Conventional facts are those made conventionally true by social definition and agreement.

        Of course, matters are not so clear cut. As soon as we get into the “philosophy of” anything, like the philosophy of science, or the philosophy of complex systems, we realize this.

        However, it is clear that a proportion of economic behavior only occurs because a formal or axiomatic system is in place to generate certain economic facts. Income (or loss) from property is generated by the combined formal juridical and accounting systems of property ownership and income allocation in our current economic system. They are not natural facts.

      • Ken Zimmerman
        June 23, 2019 at 11:49 am

        Very interesting, Ikonoclast. Of course, no science or scientist looks or performs this way. But I guess it’s interesting discussion for philosophers. To explain I’ll use examples.

        A few days ago, AT&T announced it would be closing several call-centers operating for decades in the same location. It announced that all employees at these centers could retain their jobs so long as they moved to the new location of call centers in the southern US. For AT&T this was simply a “rational” decision good for the company and its shareholders. Laid off employees expressed different understandings. For many moving was difficult or impossible due to family commitments, children in school, church ties, uprooting their lives, etc. They expressed concern they were given no notice of the move or an opportunity to complain and provide input. Before plans were finalized. AT&T saw no need or obligation on its part to provide either notice, allow input, or even discuss the decision with employees. This is the kind of major disconnect that happens when languages and the cultures language carries don’t understand or actively misunderstand one another. Employees were cut out of the process because they have no “right” under the laws to be involved. After all they are not investors, but only employees. But employees are investors in that they invested much of their lives in improving the situation (financial, customer service, sales, planning) for AT&T. Same word, investor, but with different results in terms of legal rights, consultation, earnings, and above all respect. All languages, even mathematical one’s rest on cultural givens. When the givens are in conflict, how can this be resolved? Regarding situations like this with AT&T some possible solutions are. Corporate boards to include full, voting employee, customer, and community members. No vote of the board can be final without concurrence from these members. The final suggestion is more difficult to implement. Using the board as focal point, design a process allowing the board, management, community members, customers, and employees to meet regularly for communications and mutual aid in getting better at understanding one another’s language.

        These are not technical or philosophical differences. Rather these are differences in the basic structure of life and language. These could be called axiomatic, if that term refers to experiential axioms that are different from one culture and time to another. This includes philosophy and mathematics. These are special only because many societal elites treat them as such. Economists are certainly one of these elites. They use both philosophy and mathematics to serve their purposes. If we can’t learn how people build these, how they help and hinder communications and understanding among people, and how they sometimes lead to conflict, even war, then our days as a viable species are numbered. This is the job of history, anthropology, and if they’re up to it, the social sciences. The study of management and “business administration” are of no use here. So far, social science has failed, history and anthropology have generally done some good and less harm. This is the problem humans must solve if they’re to survive. After all, humans have all the weapons they need now to wipe out their species. If that happens at least humans won’t have to wait for climate change to kill the species. None of this will be easy. Many of these conflicts have been around for decades and have become fixed as benefiting some at the expense of others. Tribal politics has always been complicated.

        And lest you conclude these small differences between people are in the big picture unimportant and that surely, they couldn’t have any major effects, or at least only easily correctable ones, I give you this from Jules Henri Poincaré’s Science and Method:

        “A very small cause which escapes our notice determines a considerable effect that we cannot fail to see, and then we say that the effect is due to chance. If we knew exactly the laws of nature and the situation of the universe at the initial moment, we could predict exactly the situation of that same universe at a succeeding moment. But even if it were the case that the natural laws had no longer any secret for us, we could still know the situation approximately. If that enabled us to predict the succeeding situation with the same approximation, that is all we require, and we should say that the phenomenon had been predicted, that it is governed by the laws. But it is not always so; it may happen that small differences in the initial conditions produce very great ones in the final phenomena. A small error in the former will produce an enormous error in the latter. Prediction becomes impossible….”

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