Home > Uncategorized > Why economic models do not give us explanations

Why economic models do not give us explanations

from Lars Syll

Unicorn-2Economic models frequently invoke … entities that do not exist, such as perfectly rational agents, perfectly inelastic demand functions, and so on. As economists often defensively point out, other sciences too invoke non-existent entities, such as the frictionless planes of high-school physics. But there is a crucial difference: the false-ontology models of physics and other sciences are empirically constrained. If a physics model leads to successful predictions and interventions, its false ontology can be forgiven, at least for instrumental purposes — but such successful prediction and intervention is necessary for that forgiveness … The idealizations of economic models, by contrast, have not earned their keep in this way. So the problem is not the idealizations in themselves so much as the lack of empirical success they buy us in exchange. As long as this problem remains, claims of explanatory credit will be unwarranted.

A. Alexandrova & R. Northcott

  1. July 14, 2019 at 10:05 pm

    My reading of Keynes is that much business relies on confidence, and mainstream models might have ‘earnt their keep’ in some way by underpinning necessary confidence. My own view is that we have not yet sufficiently clarified what they are and are not fit for. (But we may be making progress.)

  2. Mike Ryan
    July 14, 2019 at 11:59 pm

    Economic models are a distraction from reality. While someone argues demand curves, someone else executes a leveraged buyout, lays off thousands of workers and moves production over seas. The “someone else” pockets hundreds of millions that can be easily measured without any models. Models are just a cover for how free markets actually work

  3. Ikonoclast
    July 15, 2019 at 2:17 am

    Conventional economics is a prescriptive discipline pretending to be a descriptive discipline. I find it useful, at a first principles level of thinking, to distinguish between “rules” and “laws”.

    (1) A “rule” is a prescribed guide for conduct or action by any agent (human or machine).

    (2) A “law” is a fundamental law of (physical) nature described by the hard sciences after extensive observation, experiment, deduction and mathematical analysis.

    A “rule” is made in a given way by culture, custom, convention, regulation or legal prescription and could be made in other ways. A fundamental law of nature is unchangeable by humans.

    A “rule” may be possible or impossible to obey or execute depending on its relation to natural laws. Rules may also be executable for a period of time until natural limits are reached. Executable rules tend to work better if they are consistently obeyed by agents, although this tendency can reverse when consistent obedience leads to trends which run up against natural law limits.

    Our entire political economy, at the formal level, is a rules-based system. Its rules are used to construct a combined culture and economy. Its rules, as a system affecting other systems, can be judged by two sets of standards. The first set of standards is that of moral philosophy. The second set of standards are those of hard science. Where the outcomes of economics rules are bad, by widely held moral philosophy standards and/or by scientifically measurable standards then the economics rules need to be modified. [1]

    From a pragmatic stance, the necessity to change the rules of the current economic system is quite obvious. It is leading to ever rising inequality (a clear violation of most religious and humanist ethics right across moral philosophy) and it is leading to environmental destruction, the 6th mass extinction and very likely human extinction.

    Consistent adherence to the current rule set of capitalism (and the emergent behaviors this adherence leads to) does not lead to a morally or environmentally supportable civilization. This is becoming clear from Piketty’s r > g tendency “law” concerning rise in inequality as growth slows and also from the limits to growth themselves which are playing an increasing role in slowing global growth. Rather than consider certain founding rules of this capitalist system “sacrosanct”, for example open-ended accumulation of private property by a few (it’s always a few), the founding rules themselves need to be changed. This is the only logical conclusion. The founding rules are now inconsistent morally and environmentally with a sustainable civilization.

    We have crossed a threshold are now in a different state space. Capitalism only considers formal “dimensions” (really parameters) and notional quantities. We are now at the point where real dimensions, real forcea and real quantities impose a new state space on what the economy can do and be. Persisting with old rules will not work. Rules cannot change fundamental natural laws. New rules consistent with natural laws must be developed.

    Note 1: Conventional economics makes the attempt to be entirely self-referential. That is to say, economic rationality (capitalisation and money calculations) is essentially specified as the ONLY valid rationality. Economics seeks to cut itself off from both consequentialist moral philosophy and from hard science and real systems; especially in the latter case from the needs of all real humans, as real physical and conscious systems, and from the operations of the biosphere as a compound complex real system, physically and biologically.

  4. July 15, 2019 at 4:29 am

    Very interesting discussion of laws vs rules. Where would you put the “Declaration of Independence” in this context? Reason I ask is there is in the second paragraph assertions that things are self evident, and have inalienable rights. For me, and I assume in general, the validity of a government depends on being seen to observe these statements. In other words it is not acceptable to have the poor living on the street and sleeping rough, high unemployment and expensive healthcare etc. By this measure wealthy nations are not fit to govern, but we ignore it.

    • Robert Locke
      July 15, 2019 at 6:49 am

      That’s why monarchists consider monarchies superior to republics, kings and privileged orders (aristocracies) do a better job defending liberty than democracies.

      • July 15, 2019 at 1:47 pm

        So your “founding fathers” were closet monarchists? They certainly were ex the wealthy landowners class, slave owners too. But I doubt they were monarchists, given they opposed the king.

      • Robert Locke
        July 15, 2019 at 3:38 pm

        1/3 for, 1/3 (the united empire loyalists) neutral, and 1/3 against independence.

      • Robert Locke
        July 15, 2019 at 3:59 pm

        Sorry, that’s 1/3 for, 1/3 against (united empire loyalists, many of whom moved to Canada, and 1/3 neutral.

    • Ikonoclast
      July 15, 2019 at 11:24 am

      The Declaration of Independence is, in the greater proportion, a charge sheet against the King of England. Thence, it is a declaration of a right to separate from said tyrant and abuser. In this sense, it is a quasi-legal document invoking doctrines of natural law. That’s the tenor of the document. The pragmatic intent is unilateral secession and independence from England.

      “Natural law is a philosophy asserting that certain rights are inherent by virtue of human nature, endowed by nature—traditionally by God or a transcendent source—and that these can be understood universally through human reason.” – Wikipedia

      It commences as a piece of political and metaphysical rhetoric in paragraph 1 and most of paragraph 2 (the introductory paragraphs). Indeed, the politics and the metaphysics get rather scrambled together, in my view, but this “scrambling” seemed natural and self-evident to people of that era.

      The document obviously says nothing about the laws I talk about (fundamental laws arrived at in the hard sciences) and it would be patently anachronistic to expect that. It sets up certain proto-rules about claimed human rights, again employing legalese to express them: “full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do”.

      In theory and in summary, the Declaration of Independence seeks to justify and then establish a few broad rules, almost at proto-rule level, and to derive these from deontological “natural law” moral philosophy. In practice, a war was fought to establish these rules.

      It’s instructive that when rules or new rules are highly contentious and the prize at stake is glittering then raw force is often resorted to in order to establish or dis-establish the new rules. In the use of force, we see real forces used (obeying the real natural laws of physics, chemistry and biology, namely missiles, gunpowder and foot soldiers). Big rules typically become set in place (or abolished) after great outbreaks of violent force. That doesn’t mean physical force is the only way. Threat of force is another. Finally, negotiation and compromise are also possible. But if I were to continue to analyze this my post would get far too long.

      • July 15, 2019 at 2:04 pm

        I see you have gone in another direction from my contention. What I am saying is the the D of I sets up a duty and an obligation to abide by the laws and rules to validate the government. Where these laws and rules are broken or ignored then the government can legally be suspended and put out of power. They have a duty, for example, to not permit homeless people to exist, to not allow for unemployment [over 2%] free healthcare and education K-16 for example. It can be used as a counter to neo liberal policies and to remind politicians of their responsibilities and duties.

      • Rob
        July 16, 2019 at 1:18 am

        The individual whose thinking illustrates most vividly both the aspirations and the limitations of the American Enlightenment was Thomas Jefferson. He concerns us, therefore, not only because of the actual influence he exerted as a powerful statesman, but even more as representative man. At its most sublime, Jefferson’s vision of his country’s future is truly inspirational: economically and psychologically secure individuals, their rational and affective faculties appropriately balanced, liberated from superstition and fear, working at healthful occupations on their own property, repaying with public-spirited involvement the commonwealth that has educated them, freely choosing the wisest and most virtuous as their leaders. Yet, despite his assurance in the Declaration of Independence that natural rights belonged to “all men,” in practice the human nature Jefferson trusted and wanted to develop to its fullest potential was that of white males only. Other human beings he assumed existed for the benefit of that group, and he accordingly regarded them as means, not as ends in themselves. Women he valued as men always had, as mothers and wives. Native Americans, for all his interest in their languages and ethnography, he valued primarily for their lands, the expropriation of which by the whites was a goal of the highest priority. And while he admitted that African-Americans had natural rights, Jefferson actually valued them only as slave labor, and since he did not consider that labor on balance worth having, he hoped to get rid of them through a giant colonization program.
        .
        In calling attention to the limitations on Jefferson’s vision, we should not forget to contextualize it historically: in its time, the vision was much more notable for its sweeping inclusiveness than for its exclusions. Indeed, the exclusions were manifestly anomalous, and this proved a lever of critical importance to excluded groups later, when they were struggling for full participation. The generation after the death of Jefferson would prove a time for the implementation of parts of his vision of self-determination, most rapidly by white males, with much greater difficulty by others. Of course, the utopian aspects of the Jeffersonian vision never came close to realization; Jefferson had been overly optimistic about both human nature and the American future, as he himself began to fear in old age. But the ideal of the autonomous and balanced, that is, self-governing, character spread throughout the society. And Jefferson’s vision of the American nation as the example par excellence of a country where individuals were free to make themselves persisted, to be reinvigorated by Lincoln. (Howe, Daniel Walker. Making the American Self: Jonathan Edwards to Abraham Lincoln (pp. 261-262). Oxford University Press. Kindle Edition. Read)

        .
        The idea of grounding the legitimacy of government in so-called “nartural rights” was an evolution in political philosophy meant to replace the divine right of kings. They were thinking about these issues using he best englightenment science of the time — faculty psychology. They knew nothing of the fact of evolution and its implications for such concepts as “natural rights.” Hume, for example, rejected the notion of natural rights opting for a thorough going positivism.
        .
        If one considers the thought experiment of what would happen if an unarmed man met a hungry tiger face to face in the primitive forest (kill of being killed), it becomes clear nature confers no rights on man — only life and a world in which to live it. Nature does not even confer the right to live, as the primitive man being most likely eaten by the tiger proves (they have even uncoverd archeologically skulls of our early ancestors with saber tooth tiger puncture wounds in their skull).
        .
        Society’s (i.e., culture’s) prime gift to man is security.
        .
        I suspect that when rights are old beyond knowledge of origin, they are often called natural rights. But human rights are not really natural; they are entirely social. They are relative and ever changing, being no more than the rules of the game—recognized adjustments of relations governing the ever-changing phenomena of human competition.
        .
        What may be regarded as right in one age may not be so regarded in another. Natural justice is a man-made theory; it is not a reality. In nature, justice is purely theoretic, wholly a fiction. Nature provides but one kind of justice—inevitable conformity of results to causes.
        .
        Justice, as conceived by man, means getting one’s rights and has, therefore, been a matter of progressive evolution.

    • Ikonoclast
      July 15, 2019 at 10:30 pm

      To go in a direction more related to your contention and a few other comments above. The founding fathers were indeed wealthy landowners and slave owners. They were Whigs, or a new form of Whigs in the Whig-Tory contest. They claimed “all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.” But where was the equality for Native Americans and Black slaves? In the Whig construction of these unalienable Rights, on the ground where it counts, only rich white men had those rights. This interpretation and construction passes down to the current day. Many Native Americans are penned on reservations. Many African Americans are penned in prisons doing prison labor, one modern form of slavery. Homeless and unemployed people are another feature consistent with this system.

      If only people used the vote, and voted for their own enlightened self-interest all this could be changed. But this doesn’t seem to happen. The topic of why it doesn’t happen needs a book not a blog post, I guess.

      • Rob
        July 16, 2019 at 12:51 am

        If only people used the vote, and voted for their own enlightened self-interest… ~ Ikonoclast

        .
        The history of the term “enlightened self-interest” has evolved over time. The Founders were children of the Scottish Enlightenment. In their search for a new political philosophy to found the new form of self-government they aspired to create they drew upon many streams of thought current in their times.
        .
        Their idea of “enlightened self-interest” was very different from the term “self-interest” as used in modern day economics and the average person today has little idea what the “enlightened” part of “enlightened self-interest” means and drop it altogether leaving them with only “self-interest” (devoid of its moral underpinnings) and then project that back (erroneously) upon the Founders.
        .
        They thought about personal, public, and political issues through the lens of what at the time was considered the leading progressive scientific description of human nature — Faculty Psychology:
        .

        Reason should govern Passion, but instead of that, you see, it is often subservient to it.” So ran the conventional wisdom of the eighteenth century, in this case stated by Sir Richard Steele in The Spectator. Throughout the eighteenth century, the Western world typically thought of human nature in terms of a model of faculties or powers. The “active powers,” which collectively composed the “will,” supplied the motives prompting human action. The most common version of eighteenth-century faculty psychology arranged these powers in a hierarchical sequence. First in order of precedence came the rational faculties of the will: conscience (or the moral sense) and prudence (or self-interest). Below them were the emotional springs of action, called either by the approving term “affections” or the more derogatory word “passions,” as the context might dictate. Still further down were mechanical impulses like reflexes, not subject to conscious control at all. The hierarchical structure of human nature, explained a later number of The Spectator, corresponded to humanity’s intermediate position in the great chain of being, partly divine, partly animal.
        .
        The model just described provided the basis for much of the philosophy, psychology, and literature of the eighteenth century. It was treated as the common sense of the matter by an age that idealized common sense. Embodied early in the century in such authoritative literary works as The Spectator and Alexander Pope’s poetic Essay on Man, it was codified late in the century by the Scottish moral philosopher Thomas Reid. John Locke had worked within it, for the most part, in his writings on human understanding and education; Francis Hutcheson and David Hume challenged it by proposing to treat conscience as an emotional, rather than a rational, faculty.
        .
        Eighteenth-century faculty psychology was both descriptive and normative; that is, it was not only a psychology but also an ethic. By right, conscience should govern the commonwealth of the mind, but in practice, the passions were often too strong for it. As we have indicated, passion was considered the strongest faculty of the will, conscience the weakest, with prudential reason somewhere in between. The psychological fact, countless writers warned, was that the motivating power of the faculties varied in inverse proportion to their rightful precedence. This discrepancy between psychological fact and ethical imperative may be termed the problem of human nature. It is no exaggeration to call it the central problem of eighteenth-century moral philosophy. (Howe, Daniel Walker. Making the American Self: Jonathan Edwards to Abraham Lincoln (p. 21-22). Oxford University Press. Kindle Edition.)
        .
        Faculty psychology provided a language for the discussion of public issues that was fully comparable in importance to the language of the covenant or the language of classical republicanism….
        .
        This paradigm of human faculties, together with its moral imperative for self-control and its analogy for the body politic, was maintained by a wide range of contemporary cultural supports, including classical learning, Renaissance humanism, Christian theology, Enlightenment science, and Scottish-American moral philosophy.
        .
        In the development of Western political thought, the control of passion by reason has been an issue of critical importance. Stephen Holmes’s Passions and Constraint shows how the creation of free political institutions required that people control such strong passions as tribal hatred or the resentment of social slights by the exercise of sober rationality. As Holmes demonstrates, early liberal thinkers—from Adam Smith to John Stuart Mill—did not imagine that people were governed by calculated self-interest; on the contrary, they complained that people were enslaved by their passions, from which bondage only a combination of conscience, prudence, and wise institutions could deliver them. “Most human behavior was understood to spring from unthinking habit or irrational passions. Rational choice of action was exceptional.” From this point of view, to bring people to a rational appreciation of their long-term interest would be a substantial achievement, a precondition for modernity. “The principal aim of [early] liberals who wrote favorably of self-interest was to bridle destructive and self-destructive passions, to reduce the social prestige of mindless male violence, to induce people, so far as possible, to act rationally, instead of hot-bloodedly or deferentially.” Modern political thought developed out of the assumptions of faculty psychology and its imperative to subordinate passion to reason. Writing as a political scientist and legal philosopher, Holmes argues that this imperative was well justified. (Howe, Daniel Walker. Making the American Self: Jonathan Edwards to Abraham Lincoln (pp. 6-8). Oxford University Press. Kindle Edition.)

        .
        The idea of Natural Rights also has a history rooted in similar traditions. They were trying to evolve a new political philosophy to replace the divine right of kings with a government rooted in popular consent:
        .

        A superb example of the synthesis of liberalism with classical republicanism through faculty psychology is Cato’s Letters, a seminal text of eighteenth-century Anglo-American political thought written by John Trenchard and Thomas Gordon, which appeared in England weekly from 1720 to 1723 and was later published in book form. Cato (the collective pseudonymous author) brilliantly denounces the financial scandals and political corruption of Sir Robert Walpole’s government from a Radical Whig point of view. Especially in the early letters, Cato makes extensive use of classical allusions and defends such classical republican principles as balanced government. Much of Cato’s satire takes the form of relating examples from ancient history which contemporaries could recognize as his code for discussing the events and personalities of his own time. Cato repeatedly quotes Machiavelli favorably and endorses his Renaissance neoclassical humanist principle that free institutions require a vigilant and engaged public opinion, which Cato calls “public virtue.” He sees this popular virtue as threatened by corruption within the government, brought about by venal favor-seekers and speculators typified by the men responsible for the disastrous South Sea Bubble. Like others in the Radical Whig tradition, Cato warns against the dangers of a standing army, preferring to entrust the protection of a free people to a militia of armed and virtuous citizenry. His invocation of the authority of the seventeenth-century patriot Algernon Sidney requires a subsequent disclaimer that he does not share Sidney’s notoriously antimonarchical, prorepublican views.
        .
        Yet, as the letters continue, it becomes clear that Cato’s classical and neoclassical vocabulary, for all its rhetorical usefulness, has been put to Lockean liberal purposes. Cato considers that the only legitimate basis of government is popular consent; the divine right of kings he dismisses with contempt. Governments rightfully possess only delegated powers “conveyed by the society to their public representative.” Free governments are characterized by “checks and restraints appointed and expressed in the constitution itself.” When a magistrate “exceeds his commission,” his acts are “void.” Besides citing Locke explicitly, Cato also makes use of his ideas of the state of nature, natural rights, and government as existing for the protection of natural rights. The right of revolution is defended by invoking the law of nature. Cato is not troubled by any logical contradiction between liberal individualism and republican communitarianism. “What is the public, but the collective body of private men, as every private man is a member of the public? And as the whole ought to be concerned for every private individual, it is the duty of every individual to be concerned for the whole, in which he himself is included. (Howe, Daniel Walker. Making the American Self: Jonathan Edwards to Abraham Lincoln (pp. 13-14). Oxford University Press. Kindle Edition.)

        .

        Much of this historical context is absent in the minds of Americans today. I believe that bringing this historical context to light can bette help us understand the past — how we got to where we are today — and therefore allow a more aware careful consideration of where we are (present) and where we want to go (future).
        .
        I think the concept of “natural rights” should also be viewed in such historical context.

  5. July 15, 2019 at 10:30 am

    The difference is that physicists understand that a frictionless plane does not exist in reality, they know the circumstances under which the approximation will fail, and how to factor in friction when needs be.

    We can send an Apollo spaceship to the moon and back without invoking relativity, because the masses and speeds involved are too low to require it. OTOH in order to make GPS accurate enough, the position of the satellite relative to the earth must be corrected using both special and general relativity. And this was not the result of trial and error. The calculations were done before the first GPS satellite was even built.

  6. Gerald Holtham
    July 15, 2019 at 11:22 am

    “The idealizations of economics have not earned their keep…” What? None of them? Many haven’t but Syll himself pointed to the predictive success of Hotelling’s spatial model despite its unrealistic assumptions. No-one is more critical than me of the methodological extremism and naivety of a great deal of conventional economics and a lot of it is infected with ideological prejudice. Nonetheless we’ve learned a few things in the past several hundred years. Even demand curves have their uses. If you put the price of a commodity up sales will usually go down. There’s something about this exchange that reminds me of babies and bathwater.

    • Ikonoclast
      July 15, 2019 at 12:00 pm

      Gerald,

      I think people are trying to correct a great distortion which has occurred. Speaking of babies and bathwater, what could we regard as the great advances of the modern era? I mean the era running from 1500 to the present day. I would take them to be the rise of technology, science, democracy and economics. What do we hear about most today? We hear about (conventional) economics ad nauseum. It’s almost as if technology, science and democracy have been treated as bathwater and thrown out.

      Democracy is seen mainly as a hindrance to economics. Technology and science are funded (or not funded) mainly at the behest of economics. Production science which assists corporate capitalism gets massive subsidies. Impact science (ecology, climate science etc.) gets pitiful funding by comparison. It is not so much the unintended consequences of technology and science which are causing climate change (for example) but the ignored consequences of technology and science mustered at the behest of and in the manner specified by capital which are causing climate change. This is a crucial distinction.

      We could have used technology, science and democracy in much better ways but crude economism took over our society and specified and controlled the ways we could and could not utilize technology, science and democracy. This is our central problem.

  7. Craig
    July 18, 2019 at 2:19 am

    Models do not give us explanations because they do not go to the essence of what the models are trying to elucidate. Epistemologically they’re not designed to do that. They’re designed to model NOT to express the essence of that model…..which is its paradigm/pattern.

    Zeitgeists/ethics of an age are even more mentally and ethically integrative than paradigms. Finance capitalism’s zeitgeist is the overt power of debt only. Social Democracy’s zeitgeist is the covert power of extractive re-distributive taxation. The zeitgeist of Direct and Reciprocal Monetary Gifting is grace as in universal monetary, economic and financial abundance and grace as in REDEEMED power.

  8. Ken Zimmerman
    July 21, 2019 at 1:07 pm

    It’s incorrect to say models don’t provide explanations. They provide dozens of explanations. Models used in economics explain recessions, changes in prices, the demand for jobs and products, etc. The concern you’re voicing is that the explanations provided by these models often don’t comport with the results of observations on economics actions and actors you and others have made, or the theories widely accepted outside the profession of economics about actions and actors. Many of the models assume a balancing of prices and demand, of the distribution of wealth and income, and the efficiency and fairness of market (self-regulating) economics. Which many contend does not square with the inefficiency, lack of balance, and unequal (some say very unequal) results of current market (self-regulating) capitalism. This is a problem so ancient in human cultures that comedians make their living with it. “Who are you going to believe, me or your own eyes?” ~Groucho Marx. You are correct that force (the gun, the knife, the bomb) can settle it, at least temporarily. But it always returns. It’s inherent in humans’ creation of culture, of desires and expectations, of naming superior and inferior, of having wealth and social power or not, of loving and hating, of being rationally irrational. Humans are catch-as-catch-can creatures. Building what they are, what they believe and want, what’s important and unimportant, what’s knowledge and what’s ignorance, what’s social and what’s the person alone, what’s scientific and what’s unscientific, etc. as they go. No blueprints and no rules or laws beforehand.

    Ikonoclast, you say, a rule is a “prescribed guide for conduct or action by any agent (human or machine).” While a law is a “fundamental law of (physical) nature described by the hard sciences after extensive observation, experiment, deduction and mathematical analysis.” “A ‘rule’ is made in a given way by culture, custom, convention, regulation or legal prescription and could be made in other ways. A fundamental law of nature is unchangeable by humans.” A stylish recitation of modern western culture. Rules and laws are both made by humans via culture (custom, convention, regulation, legality). In the current western culture, both are checked against observation. Otherwise there would be no need for judges and lawyers, “wisemen,” scientists, or codes of ethics. So, what’s the difference between them? That too is cultural. Rules are as you say taken to be requirements for conduct for members of a culture. Our culture. Laws, on the other hand describe physical things, forces, time, and space. Based on strict and objective observations. There’s a long history of how humans came to divide the two. Some reading recommendations.

    SCIENCE AS IT COULD HAVE BEEN Discussing the Contingency/Inevitability Problem EDITED BY Léna Soler, Emiliano Trizio, and Andrew Pickering.
    FABULOUS SCIENCE: Fact and fiction in the history of scientific discovery Waller, John. OUP Oxford.
    Science for the Citizen, A Self-Educator based on the Social Background of Scientific Discovery LANCELOT HOGBEN.
    Making Up People. IAN HACKING.
    SCIENCE AS PRACTICE AND CULTURE, EDITED BY ANDREW PICKERING.

    • Robert Locke
      July 22, 2019 at 11:21 am

      The distinction between rules and laws is not the problem. The problem is the mapping of the laws of physical science onto social science, i.e., they are not prescriptive. Lars Syll’s demonstrates the non prescriptive value of monotheistic science in almost every post he makes. That leaves us with culturally determined rules; does a study of them lead to a better understanding of economics as a prescriptive discipline? My own work shows it does in the institutionalization of business studies in various cultures.

      • Ken Zimmerman
        July 22, 2019 at 2:34 pm

        Robert, in current western society the “laws of science” are considered more durable and more certain (however one defines that) than the “rules” of politics, economics, sex, etc. That difference has been culturally established over the last 500 years. Also established over that period is the notion that scientists only describe what is. Providing empirical evidence to support those conclusions that is open to testing and reevaluation. This framework leaves out much of how scientists do their work and reach their conclusions. Actions and decisions often of which scientists are not aware or push to tacit level during the research process. This is what’s called the tacit level of science. It’s not difficult to spot by observing scientists at their work. Even many scientists now take it into account in after research understanding of their actions and decisions. Scientists attempt to describe how things work. For example, how do bacteria grow and infect living things? What effects the speed of light and how? Is interstellar navigation possible? Some scientists asked bigger questions, e.g., how’d the universe begin? Some ask very specific questions. What chemicals, physical things, etc. effect Earth’s atmosphere and how? Their process is simple and would bore most businesspersons. They observe (in dozens or more ways), collate observations, reach tentative conclusions, then repeat the process with those conclusions. They never claim to find truth, or the “reality” of what they study. They try to make conclusions fit observations. No reason I can see this process would not work in the social sciences. Although the objects of social science study are not as mathematical as those of physical science. Sometimes not mathematical at all. And social science objects are not just changeable, but often changeable in unexpected ways with multiple, sometimes contradictory results. Which leads me to conclude that the “laws of physical sciences” cannot be mapped onto social objects. That would be a mess. With the proviso, of course that social objects include physical (chemical, biological, genetic, etc.) processes in addition to social. These are often entangled. One of the reasons there are social-cultural anthropologists and physical anthropologists. Since economics is a social science, in today’s vocabulary, then yes, any study of the rules of economic actions and decisions would be at the heart of that science. Although that is clearly not how many economists today envision their job.

  9. Craig
    July 22, 2019 at 5:59 pm

    Models are descriptive, but they do not capture the essence/nature of the entire pattern they represent. Paradigms of course are the exception to this in that they are pattern models.

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