Why philosophy and methodology matter for 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:
The 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 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.
Every 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.
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From practicable persons perspective in the real world, I have to agree with all Lars states in the above. Especially the last paragraph where he emphatically rejects rubbish that has already been proven wrong in the 1930s. AGAIN FROM EXPERIENCE I have always found that continually rehashing old ideas that have already been proven wrong, simply draws attention away from the very issues we are trying to solve. This is not to say that i don’t think there has not been many useful conversations on reforming economics. However from my simple observation almost every time the conversation gets started on a useful conversation it tends to get hijacked by someone pushing their barrow, it reminds me of the fact that a good debate requires a good adjudicator to keep the conversations on the track of the intended aims of the debate. Instead of literally running around in endless circles like a rat on a treadmill. Ted
My experience in studying Economics is that economics which works is entirely consistent with sound principles, such as accounting conventions and has to resolve its questions free of political interference. This interference is where the whole discipline is become marshmallow. It starts with the Constitutions of the sovereign nations. They have clauses which permit the national government to “coin its money” etc. Currency Acts take more steps we have to follow. It is entirely logical to assume that the right to coin its currency g=has repercussions like saying the nation cannot go bankrupt with its own money .It never needs to borrow or save its own money. It creates its money in response to debt/s. It cannot also use tax as its revenue source. Once again impeccable logic makes it so. The Budget is not functional if revenue comes from tax as well as deficit spending, so tax is a cost. Etc Etc
It’s surprising how much of this if not understood by economists not to mention the public!
John, on “accounting principles” and “impeccable logic”, you seem to be talking about economic theory working in the sense of being self-consistent. Otherwise I need to ask, “Works for whom”? If money is simply a banker’s IOU, the numbers in accounts may in theory add up, but is it logical to charge interest on and demand repayment of this “nothing” which has been “manufactured out of thin air”? With regard to modern “representative agent” theories, are you familiar with “logical quantification?” What is true of all is true of some, but what is true of some is not necessarily true of all.
Dave, I’m not a theorist but just an observer. What I understand today is that the mainstream has distorted economics so profoundly that it’s starting to seem nonsensical. Like having a budget with spending on both sides of the equation, obviously not an accounting convention. That’s why I believe it is consistent in theory and reality. I don’t assume history is error free. But it has been abandoned by academia because it makes the academic economics more likely to fail when historical data is there to be seen alongside it.
John, thank you for your response on accounting principles. I too am an observer (a “perpetual apprentice”), but I seem to lack the courage to commit to doing something until I can see how it works. (Came from completing my training just as crystal sets were giving way to transistors, and how these worked in terms of flows, given the physics, was becoming clearer – but still not obvious – from testing and comparison of two and three dimensional ways of making them). Anyway, I agree with you here. I also find your comment shrewd on the academic economists’ dislike of history. “Spending on both sides of the equation” has come up recently in discussion of GDP, which accounts only for money, so counts expenditure on righting wrongs as if it were growing the real economy.
Thanks, Dave. The budget example is a demonstration that the mainstream cannot even get accounting correct. It is a “proof” that Taxes [Federal] cannot be revenue I haven’t see how they justified it. I remember crystal radios as well, We needed a big antenna I recall, taller than the house. Anyway I’m not afraid to stick my neck out and so far no one has demonstrated i’m wrong, apart from straw man arguments, the chief strategy in opposing MMT. Some commentators say MMT is coming and then proceed to damn it as money printing waste., Chris Martenson in this case. talking about the fed directly monetising debt, except the Federal government hardly has any debts. and “government Debt” is other people;s money. ETC
The methodology which has NOT been embraced by economists is simply the scientific method. Until they do so the same nonsense will be reiterated for ever. It is really very simple. So why do economists fail to apply this methodology?
Hi, by the way I sent you a post for the Blog at pae-con, did you receive it?
All the best, Arturo
Lars, I learned over sixty years ago that most folk want to know how to do what they can get paid for, with very little interest in why – other than it is not what others tell them is damaging (like religion?). John Locke is fascinating in that he tells us to under-labour yet he himself became a famous theorist of ownership politics, his “empty slate” theory of knowledge simply denying that of Descartes (equivalent to Chomsky saying and computers demonstrating that one must have a bootstrap program built in so as to be able to read programs in whatever language). Twenty years ago I found common ground in Tony Lawson’s under-labouring in “Economics and Reality”, but in 1690 (two years after Britain’s “glorious revolution” was paid for on credit from Dutch reserve banking), Locke’s “Essay” goes from dismissing innate ideas, on to ideas, words, knowledge and opinion. This might easily be interpreted as diverting attention from what was happening in the real world, i.e. the Bank of England pensioning off the king. Likewise fifty years on, when Adam Smith’s tutor David Hume used incoherent philosophy of science to reduce Christian ethics to personal morality and policy to convenient expert opinion. What with these and Henry VIII, disrespect has been earned in economics since a lot earlier than the 1930’s.
I put it to you that to make a positive contribution to economics, philosophy and methodology have to end in commitment to fundamental axioms and methods of detection, evaluation and representation. From Tony Lawson and Roy Bhaskar I got C S Peirce’s method “retroduction” for what I had previously thought of as “reverse engineering”. Following library scientist S R Ranganathan’s PMEST method of emptying the world as we know it to leave only its initial condition in space and time, one has a choice between assuming the prior existence of energy, or energy being a characteristic of pre-existing matter. Deductively, to put it simply, the former (given today’s electromagnetic radiation) can explain evolution, the latter merely describes it. The minimal formal conditions for evolution remain the same as new capabilities emerge, much as higher level units emerge (tens from 1’s, hundreds from tens etc) in the construction of an arabic number format. From four types of life emerged intelligent human economies, and now the monetary control of that has recently given way to chrematism.
So don’t just keep telling us that philosophy and methodology are valuable, Lars. Commit yourself to listening to those who agree with, so you can help them articulate the Why?
I wonder why Lars Syll continues to ignore many strands of heterodox economics. They are all against mainstream economics and are trying to build a new theory which may replace it.
All those economists in heterodox economics strands know where the mainstream economics is wrong or ill formulated (their reasons may be different). Even though, we can say that heterodox economists have many difficulties and are wondering how to proceed in their research. If philosophy and methodology (of economics) are to be useful, they must help heterodox economists in their work. They do not expect any concrete concrete research programs from Lars. Only a general suggestion may be helpful for heterodox economists in finding a new direction of their research. Why does Lars continue to repeat again and again rather trivial objections to mainstream economics? Why does he not try to play a more positive role in the rebuilding of economics?
Let me add one more point. Lars Syll’s present stance of arguments has very bad side-effects for young students of economics. To know the flaws of neoclassical economics is necessary but it is only necessary to find a more correct way to do economics. Lars’s arguments lead many hopeful students out of economics. We are in a state in which we need a true economics because of tremendous troubles that are related to economy.
Just concentrate first up on the structure of economics. As I said above it is a totally consistent endeavour. Political interference is a side issue, still important, after getting the basics attended to. The history of economics has to be brought back into the curriculum as well.
John, I like the bit about “history,” to learn the specifics about economics in a particular time and place. I do not understand the pretension that we need for economics to be a monotheistic science. There are lots of tradition of skill and intellect that are not sciences; history is one.
Robert, I’m also with you on history. However, John’s wanting us to concentrate on the structure of economics is not, as I understand it, an argument for economics to be a monotheistic science but for its variations to be grounded in a science of structures.
It is as if our interests are in the content of different telephone conversations, yet understanding how telephone circuits work is necessary if we are to understand common problems like noise, interruptions, crossed wires and wrong connections. There may well be evidence of such problems in historic data.
Robert,
Pleas read my comment Yoshinori Shiozawa November 25, 2019 at 2:02 am Reply
in Lars Syll’s post
Economics — enslaved by the wrong theory
https://rwer.wordpress.com/2019/11/24/economics-enslaved-by-the-wrong-theory/
Hpw do you think of may vision of economcis? Does it seem too monolitic? or has it a reasonable extentions of problems as economics?
Economics, philosophy, and the crapification of science
Comment on Lars Syll on ‘Why philosophy and methodology matter for economics’
Tom Hickey, the philosopher of the econoblogosphere recently draw the sum of his insights: “All of us have a world view. World views differ, perhaps slightly but perhaps a great deal. We affiliate based on shared world views. If one beings to groups that don’t share a common world view. this creates some double binds and cognitive dissonance, or role-playing, These world views are ‘programed’ into the brain functioning. At the social level this results in group think and conflict within and among groups.”
Well, this is known since time immemorial: “There are always many different opinions and conventions concerning any one problem or subject-matter (such as the gods). This shows that they are not all true. For if they conflict, then at best only one of them can be true. Thus it appears that Parmenides … was the first to distinguish clearly between truth or reality on the one hand, and convention or conventional opinion (hearsay, plausible myth) on the other …” (Popper)
Most people are satisfied with the pluralism of opinions and only want tolerance for their own. The ambition of the genuine scientist/philosopher, though, is to advance from doxa = opinion to episteme = knowledge: “That the settlement of opinion is the sole end of inquiry is a very important proposition.” (Peirce)
The guiding principle for establishing knowledge is the distinction between true and false. Scientific truth is well-defined: “Research is, in fact, a continuous discussion of the consistency of theories: formal consistency insofar as the discussion relates to the logical cohesion of what is asserted in joint theories; material consistency insofar as the agreement of observations with theories is concerned.” (Klant)
The problem with economics is that it is NOT a science to this day. The major approaches — Walrasianism, Keynesianism, Marxianism, Austrianism, MMT — are mutually contradictory, axiomatically false, materially/formally inconsistent and all got the foundational economic concept profit wrong.
Economics is what Feynman called cargo cult science: “They’re doing everything right. The form is perfect. … But it doesn’t work. … So I call these things cargo cult science because they follow all the apparent precepts and forms of scientific investigation, but they’re missing something essential.”
Some economists frankly admit that economics does not satisfy scientific standards but that it is influential nonetheless: “… the great economists pursued an inquiry as exciting — and as dangerous — as any the world has ever known. The ideas they dealt with, unlike the ideas of the great philosophers, did not make little difference to our daily working lives; the experiments they urged could not, like the scientists’, be carried out in the isolation of a laboratory. The notions of the great economists were world-shaking, and their mistakes nothing short of calamitous. ‘The ideas of economists and political philosophers,’ wrote Lord Keynes, himself a great economist, ‘both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas.’” (Heilbroner)
See part 2
Glad to see we are on the same page, that economics is profoundly influential and can lead to dreadful societal disruption, because it is profoundly flawed. It really needs deleting from all the academies around the world, the fake “Nobel” Prizes deleted from the record, andan education campaign undertaken to set the record straight. MMT is controversial but only because it is viscerally opposed by those who have lost all credibility with the classical mainstream models.
Part 2
All this is true, of course, but entirely beside the point. To recall, the criterion of science is true/false and NOT influential/ineffective. The latter is the chief criterion of propaganda. Propaganda, though, has NOTHING to do with episteme = knowledge. What we know from history and the content of so-called holy books is that people accept/believe/defend any intellectual/moral perversion. The history of ideas is the history of scientifically worthless follower-generating opinions.
This holds also for the history of economic thought. There is political economics and theoretical economics. The main differences are: (i) The goal of political economics is to successfully push an agenda, the goal of theoretical economics is to successfully explain how the actual economy works. (ii) In political economics anything goes; in theoretical economics, the scientific standards of material and formal consistency are observed.
The fact is that theoretical economics (= science) had been hijacked from the very beginning by political economists (= agenda pushers). Political economics has produced NOTHING of scientific value in the last 200+ years. Economics is fake science. Worse, economics is political fraud.
True: “All of us have a world view”. True, this “world view” informs our actions. True, “world views” count in the political realm. However, “world views” count for NOTHING in the scientific realm.
To call economists worldly philosophers is a silly euphemism. Economics is neither science nor philosophy but political agenda-pushing. Economists are neither scientists nor worldly philosophers but clowns and useful idiots in the political Circus Maximus.
There is no such thing as an economist who works for the welfare or enlightenment of humanity. According to their own behavioral axiom, economists maximize their individual utility, which means — more often than not — that they are directly or indirectly on the payroll of the incumbent Oligarchy.
Economists have corrupted science and therefore to be expelled from the scientific community.#1-#14
Egmont Kakarot-Handtke
#1 Economics: Poor philosophy, poor psychology, poor science
https://axecorg.blogspot.com/2017/01/economics-poor-philosophy-poor.html
#2 Economics, philosophy, and mathematics
https://axecorg.blogspot.com/2017/08/economics-philosophy-and-mathematics.html
#3 Economics is NOT about Happiness but about Profit
https://axecorg.blogspot.com/2018/04/economics-is-not-about-happiness-but.html
#4 Economists: scientists or political clowns?
https://axecorg.blogspot.com/2017/06/economists-scientists-or-political.html
#5 Overreach: Economists have their fingers in every pie except real economics
https://axecorg.blogspot.com/2018/04/overreach-economists-have-their-fingers.html
#6 The irrelevance of economics
https://axecorg.blogspot.com/2015/10/the-irrelevance-of-economics.html
#7 Economics is NOT a social science
https://axecorg.blogspot.com/2016/08/economics-is-not-social-science.html
#8 Economics as storytelling and entertainment for the masses
https://axecorg.blogspot.com/2019/01/economics-as-storytelling-and.html
#9 What is so great about cargo cult science? or, How economists learned to stop worrying about failure
https://axecorg.blogspot.com/2017/05/what-is-so-great-about-cargo-cult.html
#10 The economist as storyteller
https://axecorg.blogspot.com/2019/06/the-economist-as-storyteller.html
#11 Circus Maximus: Economics as entertainment, personality gossip, virtue signaling, and lifestyle promotion
https://axecorg.blogspot.com/2019/07/circus-maximus-economics-as.html
#12 Econogenics: economists pose a hazard to their fellow citizens
https://axecorg.blogspot.com/2019/11/econogenics-economists-pose-hazard-to.html
#13 Macroeconomics and the fake History of Economic Thought
https://axecorg.blogspot.com/2019/11/macroeconomics-and-fake-history-of.html
#14 What it takes to become a great economist
https://axecorg.blogspot.com/2019/02/what-it-takes-to-become-great-economist.html
Egmont, as I’ve said before, on economics I agree it is “time too scrap the lot and start again”. I’ve therefore looked very carefully through what you are saying here, and it seems to me we differ most profoundly in your second paragraph under (i): ” the goal of theoretical economics is to successfully explain how the actual economy works”.
My point is, economies have varied and do vary considerably, so the singular phrase “the actual economy”, doesn’t work. I see the goal as defining what an economy is, and explaining the possible as well as actual variations in it. That leaves open the need for it, and the possibility of improvement.
Is it too much to hope that you might, on reflection, agree with me?
Philosophy is about ideas, concepts in other words. Paradigms are single concepts that define and create entirely new patterns. Methods/policies which are simply the actions of systems need to logically align with the philosophy if they are to be consistent.
Please focus on the monetary and financial paradigm. It’s the real problem and the new paradigm its solution.
Lars Syll is correct. Philosophy and methodology (the study of methods) do matter for economics. The key problem for conventional economics inheres in its globally false ontology. Conventional economics is not clear about what is real and in which senses each real “thing”, process or system is real and how these categories of the real relate to each other.
At the outset, we have to restate the seemingly clear distinction between the real and the nominal or the real and the formal. Also, in a process philosophy and complex systems science manner we must understand that we are always dealing with systems of interacting things, forces, fields and processes which cross-generate each other’s existent properties. These forces, fields and processes are not existence-discrete. They do not have a pure or essential existence independent of their interrelations in time and space. This is the picture given to us by modern physics. We need some basic definitions with which to proceed.
System: A regularly interacting or interdependent group of items forming an integrated whole. Every system is delineated by its spatial and temporal boundaries, surrounded and influenced by its environment, described by its structure and purpose and expressed in its functioning.
Real System: Any system which obeys the discovered fundamental Laws of the hard sciences namely physics, chemistry, biology and ecology.
Formal System: Any system of signs based on or forming a language, including mathematics.
The core problem of economics lies in reconciling its real and formal aspects or alternatively expunging its formal aspects altogether. I would favor the former approach. I will explain why and how. From a priority monist (the whole precedes the parts) a priori philosophical position one can resolve the cosmos (philosophically of course) as one system. A number of (hopefully testable) hypotheses stem from that position. However, first we must examine the logical consequences of the a priori supposition.
1. The cosmos is the whole real system (and characterized in part by the phenomena of emergence and evolution). (A priori).
2. Any sub-system of a real system is a real system. (Logical deduction).
3. Formal systems exist in the monistic cosmos, hence following 1 and 2 above a formal system is a real system.
This appears to be a contradiction violating the principle of non-contradiction in formal logic. However, utilizing information theory we can resolve the apparent contradiction and discuss how the formal and the real interact. In the process we find that a formal system is simply a special kind of real system. This requires another definition. In the context of this discussion the best definition is;
Information: Any type of pattern that influences the formation or transformation of other patterns.
Formal Systems are a sub-set of real systems. They are a special subset of real systems where information as patterns is encoded, transmitted, received and interpreted in and via real system media comprised of matter and energy (including brains and books for example). Each formal system is instantiated or coded (embodied concretely and detectably) in real system media (brains, books, computers etc.).
Matter, energy and information can be passed between real systems. For many open systems, the transfers of all three are important. In the case of human formal systems (instantiated in real systems), the transfer of information is usually the most important component. The transfers of matter and energy are often minimal and even deliberately minimized to achieve a high information transfer rate to energy use and/or matter “use”. These matter and energy savings are a key reason that all models, especially but not only explicit models (say computer virtual models or crafted models in a wind tunnel), are of pragmatic use as efficient tools, in terms of energetic and material costs, for investigating reality.
Human Agency is the capacity of human actors to act in a given environment. The living human (agent) is the connection between real systems which humans come in contact with and human formal systems.
We can represent this process very simply as:
Real Systems Human Agency Formal Systems (Instantiated in Real Systems)
Human agency need not, indeed should no,t be postulated as having any non-physical basis. However those complexities and controversies are outside this discussion. What is it that is shown as passing from Real Systems, through Humans exercising agency, to Formal Systems and vice versa? The simplest physicalist answer is mass, energy and information. This is a correct and complete physicalist monist description according to modern physics and its relational system model of the cosmos.
How is any of this useful in the discussion of economics? As a first point, this consistent ontology instructs us to do away with any assumption that the economy is free-standing from the environment. Environmental science and thermodynamics already tell us the same thing of course. Indeed, it is modern science which leads us to the priority monism a priori assumption at the philosophical level.
This theory also gives us an elegant proof that money is not neutral (if such proof were still needed). Money is information (among other things) as it sends signals and it is indeed a pattern, or forms patterns, which affect other patterns namely the patterns of real systems. Information which affects the formation of patterns is not neutral.
More deeply, this theory reminds us that all human created formal patterns are changeable relatively easily compared to changing real systems. In other words if you are in a collision with reality change your ideas. The entirety of human perception and understanding is achieved by modelling. Brain-internal coalesced perception as perceived perception, is a virtual model of external reality. Higher level ideations, concepts and explicit models are also themselves all models. Human understanding (and misunderstanding) is comprised in its entirety of models and nothing but models. If the model is wrong abandon the model. Truth correspondence exists as the connections of valid congruences or isomorphisms between our models (all modelled perceptions, understandings, statements and explicit models) and reality, or real systems, external to the brain or mind.
There is no doubt that the ideas and prescriptions of conventional economics (which is entirely a prescriptive discipline) are in collision with reality. Specifically, they in collision with biosphere systems, ecological systems, the finite limits of earth and even the psychology and physiology of humans. Rather than permitting nominal measures (large amounts of capital handled via the manipulations of the owners and managers of large amounts of capital) to manage our system, we should ensure that real data are employed to manage our system.
Thus, the argument that large amounts of capital will be stranded and lost if we rapidly discontinue the use of coal, is a non-argument. It is meaningless in every sense except that it provokes reaction from the owners of fossil capital. However, the argument that modern civilization cannot continue without adequate power is a valid argument. Equally valid is the argument that the difficult transition away from fossil must be undertaken despite the dangers of collapse from inadequate power because on the current course a worse collapse is ultimately inevitable. The entire transition must be mapped on real parameters, physical and social. Financial capital per se, and markets, must take no part in the analysis and prescriptions for action although financial capital might employed, very likely in a statist manner, to effect the decisions prescribed by entirely scientific analysis. Equally, we should not remove requisitioning, rationing and possibly even conscription from our thinking. The climate and limits to growth emergency to which conventional economics has delivered us is an existential threat to humanity equal to that of total war. Nobody except a complete fantasist would think that total war could be prosecuted in a democratic polity without democratically agreed requisitioning, rationing and conscription.
A good effort, Ikonoclast. Hard to disagree with without sounding like nit-picking. What you say “At the outset …” pre-empts most of my instinctive quibbles, and in any case, I agree with your conclusions about “How useful …”.
Trying to pin down where I am still uneasy, it seems to be in your definitions of “Formal Systems” in terms of language rather than encoding, and “Information” in terms of pattern rather than structure (Shannon’s channeling and information capacity or Bateson’s “difference which makes a difference”). If language is a real system, then one would expect to find it having four levels equivalent to your physics, chemistry, biology and ecology (which indeed it does: nouns and verbs with their respective adjectives and adverbs; but see also values, variables, modes of interpretation and processes in Algol68-R scientific computing language:
http://web.eah-jena.de/~kleine/history/languages/Algol68R-UserGuide.pdf ).
Human agency (as distinct from the reactive animal part of its agency) I should say is the capacity NOT to react (i.e. to be able to imagine the consequences of a change – including, as in your example of coal use, continuing the present into the future – and to dislike what one sees sufficiently not to proceed with it). That is a lesson our Social Darwinist would-be Nietzschean Supermen (of both Tory conservative and Fabian socialist ilk) still have to learn.
in reply to Egmont- Kakarot Hardtke November 16; 2019 at 2:56 pm
Although my only education was a mature age B A , graduating on my 65 birthday in 2001.
In many ways my interest in economics is not about trying to achieve any sort of academic recognition, but rather to support those who are arguing for an economic system that gives justice for all people. On this basis i find your article very readable as well as addressing many of the concerns of the ordinary people, that should also help to encourage academics to readjust their economic thinking to real economic issues, instead of ivory tower theory isolated from the real world.Furthermore I think your article could easily be adapted to, and appeal to , many members of the public, and students of all ages. BECAUSE it connects to their understanding of the real world they live in.
In thanking you, your article reminds me of the old saying that you have separated the sheep
from the goats Ted
Lars, the entire premise of this posting is incorrect, in my view. What are the contributions of philosophy and methodology, to all social sciences? Certainly not clearing obstacles to science by clarifying limits and consequences of choosing specific modelling strategies, assumptions, and ontologies. Just the opposite, in fact. When brought into the work of social science by the scientist, philosophies and methodologies hinder the social scientist’s work.
Scientists often speak of results based not on data but rather the philosophical and methodological starting points ‘assumed” by the scientists when the work was begun. This is a problem that’s faced science since it’s inception. After all, scientists, in addition to being hard workers and on and off dedicated to science, are also often arrogant elitists who like to shame those they consider their intellectual inferiors.
The work of the social scientist and the object of the social scientist’s work have two, extremely different beginning points. I take the metaphor of a flatland as a simple way for the observers to clearly distinguish their job from the labor of those they follow around. If the analyst takes upon herself to decide in advance and a priori the scale in which all the actors are embedded, then most of the work the actors must do to establish connections will simply vanish from view. It is only by making flatness the default position of the observer that the activity necessary to generate some difference in size can be detected and registered. If the geographical metaphor is by now somewhat overworked, the metaphor of accounting could do just as well. The transaction costs for moving, connecting, and assembling the social is now payable to the last cent, allowing us to resist the temptation that scaling, embedding, and zooming can be had for nothing without the spending of energy, without recruitment of some other entities, without the establishment of expensive connections. Whatever metaphors we want to cling to, they do nothing more than help us counterbalance the weight of social inertia. They are part of our infra-language. Once again, everything happens as if observers did not locate social theory at the same level as “scientistic” social scientists. What the latter means by theory is a positive, substantive, and synthetic view of the ingredients out of which the social is fashioned-and those accounts may often be very suggestive and powerful. What I propose is we push theory one step further into abstraction: it is a negative, empty, relativistic grid that allows us not to synthesize the ingredients of the social in the actor’s place. Since it’s never substantive, it never possesses the power of the other types of accounts. But that’s just the point. Social explanations have of late become too cheap, too automatic; they have outlived their expiration dates-and critical explanations even more so. So many ingredients have been packed into society, individual, cognition, market, empire, structure, face-to-face interactions, that it has become as impossible to unpack them as it is to read the hundred thousand lines of code making up a proprietary operating system-not to mention trying to rewrite it. Therefore, we have to make sure that every entity has been reshuffled, redistributed, unraveled, and `de-socialized’ so that the task of gathering them again can be made in earnest. Thusly, we help ensure that the world of the actors themselves is not flattened out. Quite the contrary, they have been given enough space to deploy their own contradictory gerunds: scaling, zooming, embedding, `panoraming’, individualizing, and so on.
And where does all this get us? If you’ll excuse one more metaphor, social scientists today are often like lazy car drivers newly converted to hiking; they must relearn that if we want to reach the top of the mountain, we need to take it one step at a time, right foot after left foot, with no jumping or running allowed, all the way to the bitter end! This point is so important not only for science but also for politics. Three new questions may now be tackled. The first is to detect the type of connectors that make possible the transportation of agencies over great distance and to understand why they are so efficient at formatting the social. The second is to ask what is the nature of the agencies that are transported thus and to give a more precise meaning to the notion of mediator. Finally, if this argument about connections and connectors is right, it should be possible to come to grips with a plausible consequence that readers must have already puzzled about: What lies in between these connections? What’s the extent of our ignorance concerning the social? In other words, how vast is the terra incognita we will have to leave blank on our maps? That we must leave to the actors to fill up. The social of most social scientists is so badly packaged-we could not inspect its composition position any more than we could check its degree of freshness-just how do we go about rendering the social traceable? Certainly not as most textbooks in the social sciences tell us we should.
Ken, “the entire premise of this [comment] is incorrect, in my view”. Much ado about nothing.
As I said in response to Lars, Locke “might easily be interpreted as diverting attention from what was happening in the real world, i.e. the Bank of England pensioning off the king”. However, that might just as well have been coincidence, and at least he began the attempt to give some consideration to our use of language, even if his Newton-focussed understanding of the human computer wasn’t up to it and side-lined consideration of Descartes’ physiology.
Near the end you ask: “What’s the extent of our ignorance concerning the social? In other words, how vast is the terra incognita we will have to leave blank on our maps?” If I go on London’s underground I don’t need to know where it physically goes; the map of it is topological rather than geometric in the manner of a road map. Given a reliable topological map, one only needs a road map for around the station one is going to.
Dave, did you miss the word metaphor? I put it in several times so it wouldn’t be overlooked. Used, I hope to make the point that ordinary people make the reality for themselves that social scientists (including economists) follow along and describe more or less well. No philosophies, methodologies, or theories added.
My position is simple. If you want to study philosophy, then study philosophy If you want to study methodologies, then study methodologies. But if you want to study people and their work in building the social, society, culture, etc., then do just that. No need to add layers of philosophy and methodologies that only serve to hide the people and their work.
Ken, would you like to be a modern day economist without the arabic number system?
Dave, I wouldn’t like to be a modern day economist in any number system.
Most of the good work in economics has been done in response to a specific problem, trying to formulate the problem clearly and then deriving a solution. The resultant model can, with care, then often be applied to other problems that turn out to have similarities in logical structure. This is a far cry from an overarching theory of everything. Economics doesn’t have those. An example may help. Principal-agent theory was developed to analyse situations where people have a mixture of common and competing interests. For example, to answer questions like: what sort of contract should a landlord strike with a tenant farmer to ensure that he gets the maximum return from the land and the farmer is both incentivised and able to earn a living. It turns out that share-cropping as a system is seriously suboptimal for both parties. Note that the theory may not be a great positive predictor of behaviour since share-cropping exists. Nevertheless I found it useful when called to advise on the structure of local taxation in a small country. There was (is) a local tax base with revenue collected by local authorities. Government concerned about regional equality wants the local authorities to pay revenues into a central pot and then they redistribute it according to formulae designating “need”. This satisfies notions of fairness but means local authorities have little interest in developing the tax base and may be careless in collecting revenues. How to balance distributional fairness considerations with incentives for development and tax collection? Principal-agent theory was important in finding an answer. A bit of abstract theorising was useful when applied sensibly to a problem for which it had not been constructed. I can quote other examples.
It is quite true that economic models can be taken up and misapplied or used to “explain” things that they can’t – often for political or ideological reasons. That is an occupational hazard. Hammers can be used to hit people instead of nails but if you abolished hammers people would still hit each other with something; Meanwhile it would be harder to get nails into place.
That is why I prefer focused arguments to generalised diatribes about “economists”. There are plenty of intellectual atrocities to focus on.
Data gathering and modeling is all well and good, but they’re both at least one or more integrative levels below economic philosophy. Pattern observation and analysis is an integrative level above even philosophy and also includes all of the levels of analysis below it. Why isn’t anyone here but myself willing to think on the ultimate integrative level? All of the posts here express the heterodox perspectives and conclusions…..over and over and over again. Can’t we move on to pattern analysis which includes both philosophy and policy?
It’s nice to actually accomplish change. Much more so than merely talking about it endlessly.
Since reading The Essence of Neoliberalism November 10,2019 at 8:42 am
Where i made a post on November 10, 2019 at 11 am
Since then after reading davetaylors request for me to comment I have written and rewritten a comment many times. While I am not looking for sympathy my excuse is that I have a health problem that necessitates some nasty medication that sometimes makes it difficult to concentrate. Added to that I am a one finger typist on windows 7. With that background I thank and congratulate all of the grey power individuals who face similar problems still mak an effort to contribute to the conversation to reform economics.
The reason I hark back to the “Essence of neoliberalism” is that in the last19 years since the French students request that was supported by some of their professors, to be exposed to a range of economic models and theories very little has changed. Except from my observation people in the real world are becoming seriously disillusioned with the current economic system that sees them seriously disadvantaged.
In my post I wrote ” In my simple mind recognising the major fault of neoliberalism is the necessary first step in reforming economics”. What I now add is that I did not make it clear is that my understanding is that to much of the conversation has been cantered around the wrong end of the stick which in my opinion is theory before acknowledging what is happening in the real world. HERE I ACKNOWLEDGE that there are some economists and others who have voiced similar opinion’s
Then davetaylor’s response to my post was ” will you listen to and discuss about having already taken your ” the first step of recognising the major faults of neoliberalism” we have not moved onto listening to the concerns of the people and conversing with them.
My response to that is economists and academics have become so obsessed with their perceived superior knowledge that they have forgotten that economics is about people.
Thus in my simple understanding the logical solution is for economist’s of the main strains
to engage with the people, which must begin with listening to them and not pontificating to them. Sorry at the moment it looks my computer is about to expire latter if I can get it resuscitated will continue the conversation.Ted
As for the economists I do believe they have to put their old beliefs, theories and models aside and start their conversation from the position that Bernard Gurrien advocated in his conversation with Tony Lawson that he believed that the first step was to clearly identify the cause of the problem. Then once that was done as I understood it, it made sense to me that the old outdate model of homo economic us needed to be seriously debated as Lawson had advocated in a way that acknowledged that in spite of cultural pressures, modern man was not determined to act in the singular way that most economists falsely assumed.
the reason I argue that economists and academics need to engage in meaningful conversations firstly it should give the economists and academics a better understanding of the concerns of the people. Secondly if the people feel they are being listened to they are more likely to not only take part in the conversation, but become politically active in the call to reform economic thinking and policy. .the computer is stalling again so will try to finish.
MY UNDERSTANDING of economics is wealth controls politics and to some extent and similarly many economists the debate has to include not only many strands of economics but also the people who are the players of the economic charade Ted
Edward, thank you for the comments. Your position and mine are simpatico. People make economies and explain what they make. Talk with them, Observe their daily actions. And be respectful. They have the answers for which we search. Of course, economists could continue to take the path they have for over 50 years. Make up answers that sound good and make them look good.
Well, that is how they earn their keep, doing the bidding of those vested interests who pay the bills. It explains but cannot excuse their behaviour, let alone condone it. It has brought evil outcomes, like poverty and homelessness, which wan afford to fix.
Which “we can” afford to fix, sorry about the typo
Historians look at people who live in specific places and particular times. Economists in their smugness do too, although they do not admit it, which is why they’ll never produce a new science. When I looked at Europe in the 20th century, and particularly at the deutsche catastrophe mid=century, I knew, as an historian, that Germans would haul their intellectual baggage and the mental capital skills the nation developed onto the stage of history in their postwar recovery. I also knew, since I had been doing comparative history, that the intellectual baggage and mental capital skills would be accompanied by what they learned from the victors, i.e…, USA. I described how the German’s developed differently from the US, and quite successfully in Chapter 2, “German Obstinacy” in the Collapse of the American Management Mystique, Oxford University Press, 1996. Ken says people make economies and explain what they make. People on this blog pay no attention, to how people outside Anglo-saxonia, in the past two centuries have talked about economics in a different orbit, especially since 1945.
Excellent points, Robert. It’s amazing how changes in time and place impact how and what people create, and how they explain their creations. Economists miss most of human life by refusing these basic human actions.
It is amazing, Ken, and I was personally amazed, after spending several years looking at German economic recovery, from which I gained a reputation with some powerful historians (e. g Alfred D. Chandler, Jr., David Landes) that boosted me into the Esso Chair, a two year appointment at the Europe Institute for Advanced Studies in Management, Brussels, The people who designed the mission of the chair, did not pay any attention to what I had been writing, the man they made the chairholder (1982-84). Instead, at EIASM, the studies completely reflected US economic and management studies. I saw this immediately when I noted no German’s were in EIASM to express the German view of business economics, about which I had been writing. The Germans had their own journals of business economics, and an associatiion of academic business economics (founded 1924), which predated 1940, But they were ignored in this so-called European Institute. I learned a lot from studying the history of German business economics, but German business economics lost its considerable prewar reputation after the war, and could not regain it.
The specificities of thought and practice in economic management were not considered peculiarities in anglo-saxonia, as I tried to explain them, but norms for the whole world to follow, as Chandler tried to proselytize.
I’ve had the personal satisfaction of seeing my forty year analysis confirmed,, while this blog erroneously sticks to anglo-saxon norms.
Robert, revealing. A story few economists would be able to even attempt to follow. Or, more importantly would even consider such an attempt.
“first step was to clearly identify the cause of the problem.”
But there is not one problem. There are many. Someone tackling one problem should not necessarily be criticised for not tackling another problem. You can’t solve everything, at least not all at once. The issue is exemplified on this blog where people are often at cross purposes because addressing different problems while looking for “the” answer. No wonder they don’t agree.
Craig,
I got them to change the tax system by talking about it. If I’d talked to them about philosophy and pattern recognition I think we would still be talking. Sometimes you have to cut a few corners and get concrete.
Gerald,
If you talked to whomever about the tax system AND ALSO about how changing the monetary and financial paradigm with the concrete policies I’ve advocated here would enable us to greatly reduce taxes for individuals….AND ALSO how they resolved systemic austerity, and individual monetary scarcity….AND ALSO how they completely ended any possibility of inflation….they may have recognized that the general beneficial effects of a paradigm change are a whole lot better and more transformational….than a mere one off resform.
The mindset of reform while well intentioned is smallish and easily undone. The mindset of paradigm change is deep, broad and permanent. And when you have specific and concrete policies that will mathematically, empirically and temporally create the kind of changes of the latter….why would anyone not want to sign on to them?
“why would anyone not want to sign on to them?”
Well, vested interests I suppose. And sweeping changes frighten people who will stick to the devil they know. I understand the wish for radical systemic reform. Fitzgerald said it: “Ah love, if we could but with fate conspire to change this sorry state of things entire, would not we shatter it to bits and then rebuild it nearer to the hearts desire.”
I don’t think we disagree much. But I resist the view that if you can’t change everything, it is unworthy to effect small improvements. Sometimes the only course is to do good by inches. That’s why Lars Sylls’ criticism of Esther Du Flo and collaborators was a cheap shot in my view. Economics is not good at big solutions. Marx tried hardest and came up short. But it can be useful for the inches if you know how to handle it.
Yes, we don’t disagree much, but when one actually looks at and so becomes aware of a program that effects a paradigm change (a 50% discount at retail sale WILL immediately double everyone’s purchasing power and rebating the discount back to the enterprise giving it WILL immediately double the potential revenue for the enterprise’s goods and services and in so doing completely invert systemic austerity and individual monetary scarcity into abundance) it’s at best neglectful not to pursue such deep and transformational change as well.
People and business owners will see the obvious self interest in the policy and policy makers can easily see the problems it solves and the opportunities it additionally enables…if they actually look at the policies and their effects.
.
In normal times I might think you were correct in this advice. But not today. The systemic system is broken beyond repair and tinkering with the edges only diverts attention from the deeper systemic problems, in my view. Your argument reminds me of those republicans that argued they were joining the Trump administration in an attempt to minimize the damage by acting as “guardrails” when in fact their attempts were futile and their presence only lent legitimacy to a pathologically narcissistic demagogue hell bent on tearing down the separation of powers and destroying the American Constitutional Republic and experiment in self-rule. It is fiddling while Rome burns.
Correction, fiddling while the world burns.
Ted, on “The Essence of Neoliberalism” you wrote: “[Keynes] believed the evidence showed that free trade, the international mobility of capitalism and foreign ownership of national assets were more likely to create war than peace. … In my simple mind [this] recognising the major faults of neoliberalism is the necessary first step in reforming economics. … [In PAER 32] Bernard Gurrien and later Edward Fullbrook expressed similar views. … Listening to the concerns of the people and conversing with them could begin to construct a foundation for a new economics”.
Which on the face of it is precisely what this RWER blog has attempted to make possible.
Actually, at the time, I didn’t join in the Cambridge declaration supporting Gurrien’s proposal, because this aimed to expose students of economics to its different schools, not to “construct a new foundation for economics” that would enable it to resolve its problems. What Keynes and before him Marx did was not so much to resolve the problems of capitalism as try to control them. This left us back at square one when Friedman and Hayek persuaded Thatcher and Reagan to get rid of the controls by attributing post-Keynesian (and of course Marxist) difficulties to them.
In this blog and elsewhere Fullbrook hoped new thinking would emerge from discussion of differences. Those directing the discussions have unfortunately “conversed” very little with the contributors, attracting mainly economists and critics already committed to defending views of what they see as visible in the economy. That includes neither its foundations nor that they are seeing it through fraudulently rose-tinted and theory-distorted glasses. Ken can see it is built on sand, so Ikonoclast wants it built on hard science. But that itself has the distorting glasses of Newtonian force theory, blinding it to Shannon’s information theory based on form rather than meaning. Fullbrook himself realised that economics involves quantitities, hence both number theory and algorithmic [arabic] number forms, so it is greatly to his credit that his book on Market-Value leads up to these. It resolves the aggregation problem (not being able to add apples and bananas) with the principle that an uncountable whole can be subdivided into countable parts: formally equivalent to moving a decimal point from the right to the left, making the place numbers negative.
I went on to joke about the seriousness of [present-day] economics being a joke, and to seriously propose the economic equivalent of Fullbrook’s enumeration principle: the accounting of what the banks call debt [to them] (a negative number) as a credit [limit] (a positive number). As we can see from our credit cards, this only becomes a debt [but to the society which is provisioning us] insofar as we “spend” it. The card company merely does the accounting, so has no proper right to charge interest.
Arguing about money supplies, MMT half sees this in terms of government budgets, not perhaps in terms of personal ones, nor in terms of the government justifying the credit it was given by doing the job it is being paid for in advance. Craig here half sees it from the retail end, though not how the gift is to be written off as repaid by our caring for ourselves and joining in doing what needs doing, whether contractually, educationally or voluntarily. (Gracefully, as Craig puts it, with respect for desire and ability to repay. Not the individualist form of justice: “an eye for an eye”).
Joking seriously about what even ordinarily people do, I said I saw few economists seeing men trying to impress their women-folk (not to say themselves and their clientele) with fine jewelry, clothes, cars and houses. Gareth Connelly directed me to “Conspicuous Consumption” in Veblen’s “Theory of the Leisure Classes”, which turns out to be itself a serious joke: a wonderfully overstated satire. 130 years on, it is clearly very relevant again. My copy unfortunately does not contain an index, but it does nor seem to go on to consider children as people. The anthropologist Clause Levi-Strauss argued that the family, not the individual, was the atom of society, so this is important. My first principles theory of human kind,as (if you like) talking and writing animals, ends up with the father and mother feeding and educating the family and old folks (with more time to think) developing new ideas (like “reserve” banking, the financial control system and “pecuniary interests” in Veblen which have evolved from that). My first principles theory of control systems maps directly onto the economy at Tony Lawson’s “ontological” level”. What is an economy? It is a PID control system (specifically an aid [Gerald Holtham’s hammer] in household management). What is the role of a person in an economy? Whichever type is setting the aims, the other three provide the PID feedbacks. What is the financial system? It is an information based PID servo. What is wrong with it? It is being used to control not the economy but itself. Its attempt to control inflation is analogous to that of a stabilised electric power supply.
Ted, you say I said “we have not moved onto listening to the concerns of the people and conversing with them”, which “must begin with listening to them and not pontificating to them”. Let me emphasise that I am one of “the people”, and before and since chancing on Keynes in 1968 I had listened to my own experience as father of a large family as well as that of others, and as a Catholic to the pontiff [meaning “bridge builder”] Leo XIII, speaking out on behalf of those English family men he had listened to, who were being locked out of work c.1890. Keynes himself, with the experience of a statesman, was one of the people, and sufficient of a man to be able to start from first principles and eventually come to disagree with what he had been taught. What I am myself concerned about as one of the people who happens to have experience of both physical and information science, is that I can see economics with either pair of glasses (badly distorted by the money of the older science, making sense as credit in an information-based control system) but find none willing to listen among those for whom this should be of professional concern. Ikonoclast (above) seems to be a scientist who has never heard of information science; Ken (above, Nov 18 at 10.58) seems to be a non-scientist, for he claims “scientists [and by innuendo myself] … are also arrogant elitists who like to shame those they consider their intellectual inferiors”. I’ve met such, but how wrong Ken has been about me and my not obviously successful attempts at bridge-building between economists and relevant science. So he can’t yet understand me; but infants can’t walk until they try.
As a humble back-room scientist I have never had any status to worry about, Ted, and if I have occasionally put Ken down it has been in frustration that such an obviously talented man as himself can be so full of his own beliefs that he hears nothing of what I am (not telling him to believe but) asking him to consider. As for me, at 82 I still consider bridge building (“pontificating”) an honourable or in any case a practicable profession.
Gerald Holtham is of course quite right that here we are often at cross-purposes. Getting from one place to another, not looking for “the answer”, is what bridge building and topological mappings are all about.
Dave,
The essence of neo-liberal finance capitalism is the paradigm of Debt Only as the sole from and vehicle for the creation and distribution of money/credit.
Integration of the truths etc. of opposites is the very process of wisdom. Paradigms are the essence of patterns, i.e. the second highest integration of the opposites of essence as in a single refined mental concept and the character of the whole of the temporal/physical universe pattern. So perceiving them is the wisdom of the integration of opposites.
The pinnacle concept of wisdom is grace as in love IN INDIVIDUAL ACTION/SYSTEMIC POLICY and if one studies all historical paradigm changes it becomes apparent that all of their effects are aspects of the ethical and temporal concept of grace like abundance, anti-monopoly/anti-dominance, increased freedom, increased knowledge as in data and also as in epistemology, inclusion/unity, ignorance regarding problematic slowing and/or stopping to problem resolution as in discovery, enlightenment and flow/free flowingness, increased survival, etc. etc. And monetary grace as in gifting is simply its newest and most urgently needed expression in the economy.
Grace is the true nature of the cosmos within and without, and awakening to that truth enables us to flow freely, happily and ethically through the maya that ONLY the physical and ONLY force and power as in control are real. The concept and experience of grace resolves, enlightens and unites even that.
Craig, although we both speak English and use many of the same words, I am not at all sure how far we share the same meanings because you define your terms only by using them. For example, ‘grace’ for me is not a ‘something’ which does something (which seems to be your usage); it is word for a forgiving attitude of mind which allows things to improve. From your usage of the word ‘maya’ I thought you were contradicting me – until finding in my dictionary it meant “illusion”, so I could see we were actually agreeing! Can we “build bridges” between us by discussing what we each understand by shared words like ‘paradigm’ and ‘integration’?
Worded as directly as possible, any so-called science that devotes most of its time and effort to outlining and defending the philosophy(s), theories, and methodologies it uses cannot be a science. In other words, economics’ focus seems to be studying and praising itself. There is not enough time for this work and the work of researching economics’ supposed research subject – creation and operation of an economy. Other social sciences make this same error, but economics is the most blatant and long-term among the social sciences. Economists take full charge of informing everyone what economics is, both in thought and practice. They override and supplant the work of creating and explaining an economy by those who directly perform that economy. This includes the following. No action can be economic unless it takes place in a market that is self-regulating, clears at the margin, and always seeks to return to equilibrium. Every economic action must be individualistic and serve the needs of the individual economic agent (homo economicus). Overall, capitalism is the only successful economic framework. Deviations from its principles must be opposed. Efficiency is primarily important for economic transactions. And the list goes on and on. Actions that do not fit within the requirements of this long list are not economic, at least for economists. Unfortunately, at least for economists, many actions labeled economic by corporations, banks, the local grocer, most families, and even government (of all types) are not included on this list. So, economists and those who create economies are at loggerheads. Creators are pushed aside in favor of social scientists. No scientific work can come from this. Economists have the same problem as the Roman General Crassus. Crassus loved Rome, like the pimp loves the prostitute. A la economists and the economy.
So we all agree, Ken, that economics as currently taught is not worthy of being called science. Beautifully put, but you are telling us nothing new. Where you are disagreeing with me (for it is that way round) is when you assert that economics is not a science because (things having gone wrong with it) it is inappropriate to inquire “Why?”, i.e. to do what Lars is encouraging us to do here: study its “philosophy(s), theories, and methodologies” in hope of finding out “Why”.
In point of fact (as Tony Lawson has pointed out and I have personally experienced studying with would-be physical scientists) the problem is that Kuhn’s “normal” scientists want to get on doing what they see other scientists do, not worry about whether they are doing it right. So, they advance knowledge incrementally. As Kuhn and Lakatos saw, the time for “revolutionary” science is when they stop doing so: not because the “normal” scientists waste their time studying “philosophy(s), theories, and methodologies” but precisely because they are the very people who don’t, self-defensively seeing no need to. That, actually, is YOUR philosophical position on science, Ken, and adaptation to context your methodology.
Dave, as I’ve said, it is impossible to perform as a science while seldom exploring anything more that the actions of the supposed science. Reflexivity of a science is to be expected and applauded. Self-worship is not. Economists are focused on loving themselves and economics. They spend little time or effort exploring the economy. They take this course of action because they believe they know all the answers. Making exploration or research unnecessary. They are certain they’ve latched onto the “truths” of western culture that shape economic actions. The individual human being has a special place in Western philosophy, theology, and politics. Since the Enlightenment, Western ideas about society have been cast largely in terms of individual rights and freedoms, elevating autonomy to a virtue, in opposition to the bonds and chains of tyranny and irrational superstition, and of family and community. It should be no surprise, then, that large segments of Western economic thought also start with the individual and try to understand the whole of work, trade, and money by analyzing the behavior of the single human being. This approach is selfish only because it begins with the individual “self,” not because it always assumes that human beings act egotistically. Adam Smith’s “economic man” is selfish in this sense. Quite the contrary, most modern economists portray human beings as essentially rational and intelligent, and they specifically want to avoid the kind of value judgments about morality and motives that are implied when we use a term like “selfish” to describe someone’s actions. So, in attempting to understand economics today, the priority is to reveal the history of the efforts to build economics starting from the rational individual. The goal is to give a fair and balanced view of the dominant perspective in modern Western economics, to explain some of its results and conclusions, and to question why it has achieved such wide acceptance and power in the world. It’s also important to include some discussion of both the internal and external criticism of Western economics by people seeking to qualify, modify, or improve its approach. A focus over emphasized on this blog, and in the western media generally. However, the more fundamental challenge facing us is assessing the possibility of building economics on a foundation other than individual rational action. Because of the diversity of American culture, there are several such possibilities. For example, while most Americans like to think of themselves as individuals first, this cultural identity coexists with its exact opposite, the idea that we all fall into groups and “types,” that most people are predictable because of their age, gender, background, family, and ethnicity. We often explain a person’s actions as “typical eldest sibling” or “middle class,” and we like to label groups like yuppies, slackers, evangelicals, and Trumpers. Modern North Americans thus hold contradictory notions of who they are and how they are labeled. And, of course the actions they ought to take. The label “American” exemplifies this contradiction. The tension between individual and group identity is a central theme in American culture more so than most any other culture on Earth. It’s also a basic obstacle in all social scientific research and historical scholarship, since all reconciliations are speculative, at best. Other economic foundations we need to consider could include the following. First, morality. Every culture has one or more moral codes. Second, and it seems more obvious, economics can focus on politics and power. Or, some combination of personal identity, morality, and politics and power.
Finally, I will say only this about Kuhn and normal vs. revolutionary science, Kuhn was wrong. I’ve not read Lakatos so I can’t discuss whether he accepts such nonsense. Science is a struggle. The work may become revolutionary in the sense of culturally disruptive as an historical accident, but revolutions aren’t planned. Plus, scientific revolutions require recognition to be revolutionary. And recognition depends on time and place. So, if we want to understand science, we must consider it within the context of the cultures and societies that create it. Kuhn’s error was his view of normal and revolutionary science. He defined normal science as, “…the activity in which most scientists inevitably spend almost all their time, is predicated on the assumption that the scientific community knows what the world is like.” Much of the success of science as work derives from the community’s willingness to defend that assumption, if necessary, at considerable cost. Revolutionary science, on the other hand, Kuhn takes as extraordinary episodes in which that professional commitment fails. It is Kuhn who adds the terms normal and revolutionary to these actions. It’s my view they are simply part of ongoing scientific debates and disagreements, whose consequences, if there are any vary over time and location and are not predictable.
It seems it is not just scientists who are “arrogant elitists who like to shame those they consider their intellectual inferiors”. Kuhn was wrong! Well, Lakatos didn’t disagree with Kuhn’s way of characterising the different types of mind: the “normal” which painstakingly sifts the evidence to retain only the new, and the “revolutionary” type of mind, just as immersed in the evidence but sometimes very directly, whose gestalts suddenly reveal “the young lady in the face of the old”. What Lakatos said (and I have to agree) is that the revolutionary types won’t get a hearing until their time has come. Until it is agreed (as it is in economics), the “normal” scientific method isn’t working.
Dave, whatever normal is then. May not be the same as now. I’d be surprised if they are the same. But weird things do happen. As the attorneys I work with would put it, you’re assuming facts not in evidence.
In response to davetaylor November 2, 2019 at 10:34 pm
My sincere apologies to you in particular if I did not make it clear of whom I was accusing of pontificating. FIRSTLY it was not you, or many of the other contributors to the conversation who reply to my simple posts, Secondly I welcome constructive criticism because it gives me the opportunity to evaluate my understanding and improve my knowledge of the subject. My reason for becoming involved in the RWER is I am acutely aware that economics and political policy, from the publics perception, will not listen to their concerns. This is why in respect to all those who are contributing to the conversation with an open mind. i thank you all. I am now of to the heart doctor. Ted
Ted, no apologies needed. My thanks for giving me (in the word ‘pontificating’ meaning “bridge building”) a new way of explaining what I’ve been attempting:
“Getting from one place to another, not looking for ‘the answer’, is what bridge building and topological mappings [like maps of London’s Underground] are all about.”
In response to davetalor November 20, 1019 at 10:34pm
Thank you for your reply, where you say “Actually at the time I didn’t join in the Cambridge declaration supporting Gurriens proposal, because this aimed to expose students of economics to its different schools, not to “construct new foundations for economics” that would enable it to resolve its problems. As I read that statement now you leave it open that it may not be your position now.
Firstly I have always been a supporter of Keynes because I was born to struggling parents in 1936 with the result i was often told about the hardships many of the older generation experienced during the great depression. Then in later years those people of little or know education, expressed from there experience the same sentiments in my quote from Keynes.
Now I give my reasons for supporting Gurrien, Lawson Fullbrook and others. Which is from my practical perspective, was as i understood it, their intent was to stop telling the students what to think and give them the opportunity to examine different models and concepts applicable to real world situations. In other words their aim was to foster an open mind that would enable them to have meaningful conversations with those with alternative views in the search for solutions to economic problems, such as the inequality between the extremely wealthy and the disadvantaged. The computer is playing up again, so will try again later Ted
Ted, how nice it is to have someone asking wanting to discuss my position rather than assume it is wrong!
Let me first say I have shared your experience of and gratitude to Keynes, but joined in this debate twenty years ago because Lawson had realised the need to “Reorient Economics”: even the current understanding of Keynesianism. Since 1968 I had seen Keynes anticipating developments in “cybernetic” control theory, but still find this dismissed out of hand by conventionally trained people, either because they don’t understand it well enough to see its significance, or in defence of the academic status on which their own jobs depend. At the time I’d tried to interest Lawson’s Critical Realist circle in information science: at root C E Shannon’s mathematical theory of communication and N Wiener’s biological machine theory of cybernetics. However, since 1958 I’d seen the origins of amoral capitalism in David Hume’s atheist philosophy of social science, which it turns out Adam Smith had imbibed. Studying philosophy of science I was introduced to Kuhn, who distinguished “revolutionary” from “normal” science, these corresponding roughly to the fundamental science I was working on in light of evidence from my work in applied science. Lawson’s philosopher of science, Roy Bhaskar, distinguished these concisely with his DREI(C) and RRREI(C) mnemonics (in his book “Dialectic”) for the successive phases of fundamental and applied science.
To cut a long story short, where economic students like Guerrian were rightly objecting to even historically significant thought like that of Keynes and Marx being off-limits, I was objecting to suppression of an information-oriented understanding significant for the future, despite the incredible impact it has had on the real economy. For me it was a question of priorities. It is not that I disagreed with the students, but the problem is, who is to teach them? The blind leading the blind? The students were wanting choice between outdated models based on a 1740’s self-centred philosophy and 1840’s science. I was then already well on the way to refuting Hume’s philosophy, developing an understanding of control empirically consistent from the Big Bang right into the failure of economics post-1980, and an algorithmic map of everything that shows how our failing economy is causing failure of our environment.
Perhaps my answer to you should be BOTH “reorienting economics” AND “to stop telling the students what to think and give them the opportunity to examine different models and concepts applicable to real world situations”. But this has to start with the teachers reorienting their ideas. The buck – and probably the world – stops with them.
Ted, I found this (recommended by Yoshinori in ‘Economics Enslaved’) exceptionally clear on the difference between a theory and a model. From this point of view economics now teaches playing with models rather than applying science.
https://doi.org/10.1080/23322039.2017.1280983
Dave, et alia, social sciences and physical sciences are different in several ways. One difference argues against using biology to guide the work of social scientists. The plant grows, needing several inputs for growth. The plant reproduces. The plant dies. Each of these plants share with humans. But the plant attaches no meaning to its existence. In simple terms, the only meaning assigned to plants during their study is by biologists and other scientists. Social scientists assign meaning to their objects of study, humans’ actions and society. Simultaneously, however, humans involved in actions and society also assign meaning to them. Which meanings ought the social scientist focus and report on in their research? In my view, it’s the latter. For economists, it seems to be the former.