Home > Uncategorized > What is truth in economics?

What is truth in economics?

from Lars Syll

28mptoothfairy_jpg_1771152eIn my view, scientific theories are not to be considered ‘true’ or ‘false.’ In constructing such a theory, we are not trying to get at the truth, or even to approximate to it: rather, we are trying to organize our thoughts and observations in a useful manner.

Robert Aumann

What a handy view of science …

How reassuring for all of you who have always thought that believing in the tooth fairy make you understand what happens to kids’ teeth. Now a ‘Nobel prize’ winning economist tells you that if there are such things as tooth fairies or not doesn’t really matter. Scientific theories are not about what is true or false, but whether ‘they enable us to organize and understand our observations’!

What Aumann and other defenders of scientific storytelling ‘forgets’ is that potential explanatory power achieved in thought experimental models is not enough for attaining real explanations. Model explanations are at best conjectures, and whether they do or do not explain things in the real world is something we have to test. To just believe that you understand or explain things better with thought experiments is not enough. Without a warranted export certificate to the real world, model explanations are pretty worthless. Proving things in models is not enough.

Truth ought to be as important a concept in economics as it is in real science.

  1. John Hermann
    February 18, 2020 at 10:19 pm

    As any student of the philosophy of science will tell you, scientific endeavor rests upon the assumption that something called objective truth exists, and that the use of scientific methodology provides the best way of approaching (and approximating) objective truth.

    • February 21, 2020 at 8:13 am

      Its probably true that a student would tell you so. But would the same student also be aware of the fact that in social sciences the kind of objectivity that we take for granted in physics and chemistry may just not exist? The only objectivity available in economics is the objectivity of the method but that tells us nothing about the appropriateness of the method when applied to a world without objective truths.

  2. February 18, 2020 at 11:05 pm

    I don’t know whether Aumann means to exclude empirical comparisons with observations, but I will include them and *still* argue that a hypothesis/theory/model must be judged by whether it gives a *useful* guide to what we can observe.

    Is Newton’s theory of gravity “True”? Is it *wrong* because it doesn’t correctly predict Mercury’s orbit? Does that mean Einstein’s theory is “True”? It is not compatible with quantum mechanics. Talking about Truth in science just gets you in a big tangle.

    Newton’s theory of gravity is *useful* in many contexts. Einstein’s theory is *useful* in more contexts. The criterion is *useful*, not *true*.

    John Hermann, if you deal with “observations” then you don’t have to get into the question of whether there is an “objective reality” behind them. I leave that to metaphysicians and theologists. It is our experience that there are many repeating patterns in our observations of the world, that is enough for us to do science.

    If Aumann did mean you don’t need observations to decide “truth” then he may have confused mathematics with science, which many economists do. In mathematics you can “prove” something, and it is “true” in that sense. But mathematics is an abstract logical structure, whereas science is a collection of (very) useful (often quantified) stories that help to guide us in the observable world.

    There’s a chapter on this in Economy, Society, Nature – see right-hand column.

  3. Meta Capitalism
    February 18, 2020 at 11:36 pm

    There are quite divergent views, at least in Western culture, about human nature. Some views are very negative: we’re selfish, greedy and stupid. We’re lazy and complacent, and only a huge shock or an imminent threat will stir us to change anything. We are innately warlike and will probably destroy ourselves.
    .
    There is some truth in this negativity, but it’s hardly the whole story. Many religions and philosophies entreat us to be loving with each other. Most of us have loving relationships in our lives and greatly value them. Some people are very loving in the way they deal with everyone. Many traditional cultures do practice sharing with each other, at least within their small communities. (Davies, Geoff. Economy, Society, Nature: An introduction to the new systems-based, life-friendly economics (World Economics Association Books Book 3) (Kindle Locations 765-772). World Economics Association. Kindle Edition.)
    .
    Joshua Greene argues for more than this basic suite of behaviours (Greene, 2013). He argues that many of our feelings promote cooperation among otherwise selfish individuals. He cites a surprisingly long list of feelings or emotional dispositions that, he argues, fit this claim: empathy, familial love, anger, social disgust, friendship, minimal decency, gratitude, vengefulness, romantic love, honour, shame, guilt, loyalty, humility, awe, judgmentalism, gossip, self-consciousness, embarrassment, tribalism and righteous indignation. These are all quite familiar aspects of our human nature, yet he argues that only recently have researchers come to appreciate how they all work together to promote cooperation. The conclusion depends on appreciating the situations in which the feelings are triggered. Of course simply listing all those feelings won’t convince you of the truth of his claim, and surely some of them will still be debated. Nevertheless such studies should show clearly enough that we do have strong propensities to cooperate, and that those tendencies have become deeply embedded in our human behavioural repertoire. (Davies, Geoff. Economy, Society, Nature: An introduction to the new systems-based, life-friendly economics (World Economics Association Books Book 3) (Kindle Locations 866-875). World Economics Association. Kindle Edition.)

    .
    You have a very shallow understanding of science Geoff and yet you too talk of the truth and carry in your so-called ‘truth claims’ ideas of what truth is and what reality is. You are fooling yourself if you think your science is value free of ‘truth claims’ about reality, and your shallowness shows in your confused metaphysics in your book which ironically, you claim to not be doing ;-)

    • February 18, 2020 at 11:47 pm

      Nit-picked. Perhaps there are more colloquial uses of ‘truth’ here. Also the first usage is about something that can be verified: that some people think human nature is very negative. The second is a bit looser, a short-hand for “convince you there is a reasonable amount of evidence to support this claim”. Neither is about some universal God-given Truth. Loosen up Meta.

      I’ll leave the ‘shallow understanding of science’ for others to judge. I’ve only spent 50 years plus practising it and contemplating the process.

      • Meta Capitalism
        February 19, 2020 at 12:17 am

        There are quite divergent views, at least in Western culture, about human nature. Some views are very negative: we’re selfish, greedy and stupid. We’re lazy and complacent, and only a huge shock or an imminent threat will stir us to change anything. We are innately warlike and will probably destroy ourselves. There is some truth</b in this negativity, but it’s hardly the whole story. Many religions and philosophies entreat us to be loving with each other. Most of us have loving relationships in our lives and greatly value them. Some people are very loving in the way they deal with everyone. Many traditional cultures do practice sharing with each other, at least within their small communities. (Davies, Geoff. Economy, Society, Nature: An introduction to the new systems-based, life-friendly economics (World Economics Association Books Book 3) (Kindle Locations 765-772). World Economics Association. Kindle Edition.)
        .
        Just as science is not about Truth, neither is science about proof. You cannot prove your
        theory of the world is correct. There are two reasons for this. One is that someone might invent a theory that works better, as Einstein’s theory works better than Newton’s. (Davies, Geoff. Economy, Society, Nature: An introduction to the new systems-based, life-friendly economics (World Economics Association Books Book 3) (Kindle Locations 2489-2493). World Economics Association. Kindle Edition.)
        .
        [Clearly here Geoff uses the big “T” to emphasize something, perhaps the claim of Absolute Truth or such claims that assert to model the ‘entire world economy’. In reality all theories make ‘truth claims’ of one kind or another just as they make value-judgments.]
        .
        Walras seemed to think it is a straightforward and rather trivial matter to abstract idealised concepts from experience, or in other words to formulate hypotheses. His conception was that certain truths about the real world are self-evident, rather as Euclid’s geometric postulates were held for a very long time to be self-evident. However alternative possible geometries were conceived in the nineteenth century, and Einstein then showed that Riemann’s geometry corresponds better with the larger universe than Euclid’s geometry. (Davies, Geoff. Economy, Society, Nature: An introduction to the new systems-based, life-friendly economics (World Economics Association Books Book 3) (Kindle Locations 2556-2560). World Economics Association. Kindle Edition.)
        .
        The simple truth is still that the Earth is finite and our efforts to extract from it are becoming more destructive. [We know not all ‘truths’ are simple and ‘self-evident’ while some are.] (Davies, Geoff. Economy, Society, Nature: An introduction to the new systems-based, life-friendly economics (World Economics Association Books Book 3) (Kindle Locations 5482-5483). World Economics Association. Kindle Edition.)
        .
        Hansen, J. (2009) Storms of My Grandchildren. The truth about the coming climate catastrophe and our last chance to save humanity. New York: Bloomsbury USA. (Davies, Geoff. Economy, Society, Nature: An introduction to the new systems-based, life-friendly economics (World Economics Association Books Book 3) (Kindle Locations 5759-5761). World Economics Association. Kindle Edition.)

        .
        There are many ways to use the term Geoff. What you call “Nit-picked” is further evidence of your sloppy use of terminology hiding your discombobulated metaphysics. The sad part is you are not able to face it honestly and hubris doesn’t hide this. Your definition of science is not the only one, and you use the term in different ways but with little self-conscious reflection.
        .
        Your writings (not just in the book above) are full of value judgments based on your beliefs–truth claims. Don’t get me wrong, for I like your approach to dealing with many issues in economics and even science. You just prove your own shortcomings in your shallow dismissal of ‘truth’ while using it throughout your own writings in different contexts. Just because you recognize the relative nature of your ‘truth claims’ doesn’t make them any less ‘truth claims’.
        .
        Contrary to your confused metaphysics people do care about the truth; including science and scientists. Even passionately (read your previous books!). Either it is true and accords with reality out there in the real world that human’s are causing global warming and it is really a catastrophe of “last chance” proportions or it is not. Either it is true that nature red in tooth and claw is not the whole story about cooperation, or it is not the whole story but only part of the story. These are all human judgments which carry both ‘truth claims’ as well as ‘value judgments’.
        .
        Just because truth is relative doesn’t mean it isn’t important and doesn’t exist. It simple means we see only through the lens of tentative, culturally filtered, human experience. Just because there are no absolute big “T” truth accessible to our observing personalities and minds doesn’t mean there is no material reality out there that we seek to understand.
        .
        I don’t have a problem with you not wanting to engage in lengthy philosophical discussions about methodology and wanting to get on with trying to better understand the way the world works through your understanding of science, only your unconscious philosophical assertions that reveal a rather naive and self-contradictory view of what you are doing.

      • February 19, 2020 at 12:41 am

        Meta – First, I explicitly adopt value judgements about economies and what they are for. I’m not trying to create a ‘value-free’ conception.

        You say ‘Just because truth is relative’, which reveals your own semantics. When I say science is not about Truth, I’m not talking about ‘relative truth’, whatever that is.

        The book is an Introduction not a rigorous philosophical tract. I’ve already acknowledged my colloquial use of ‘truth’ as (common) short-hand. You haven’t actually addressed the point I made above about True versus useful, which is the central point in my chapter on science.

        This is offensive: “you are not able to face it honestly and hubris doesn’t hide this”. Perhaps, Meta, my semantics are not the same as yours, perhaps your claims here are too terse and not readily understandable, perhaps your understanding of science is different from mine and perhaps we could explore that, but you have already descended to offensive personal characterisation instead of useful debate. End of exchange.

    • Meta Capitalism
      February 19, 2020 at 12:38 am

      We can leave the question of what ‘reality’ is ‘behind’ our observations to the metaphysicians and theologians. Unfortunately many scientists became enamoured of the idea that science is in the business of ‘reading the mind of God’. It’s another distraction, unless God’s mind is very changeable and context-dependent. So too can we leave the question of ‘truth’ to others. It is apparently a shocking claim to many people that science is not in the business of revealing Truth. Rather, science is, to emphasise the difference, in the business of inventing useful stories, stories that may be rather loose or may be very precise. (Davies, Geoff. Economy, Society, Nature: An introduction to the new systems-based, life-friendly economics (World Economics Association Books Book 3) (Kindle Locations 2402-2408). World Economics Association. Kindle Edition.)

      .
      Here Goeff is espousing a philosophy (a metaphysical belief). He uses rhetorically the big “T” as in “It is apparently a shocking claim to many people that science is not in the business of revealing Truth.” This is bull. Few scientists of real depth (e.g., Einstein) thought they were revealing absolute “Truth” (note Geoff’s confused rhetoric and manipulative story telling in that he slips from ‘truth’ to ‘Truth’ as though his justifies his conclusions about science and his own definition of it.)
      .
      Geoff has his own philosophy that he is espousing while simultaneously claiming he doesn’t do philosophy. Therein lies the irony:
      .

      The reason for the everlasting interaction between science and philosophy transpires clearly. The human mind musters an admirable ability to think up equations for physical systems. But equations need to be interpreted in terms of physical models and mechanisms. Science requires conceptual understanding. This understanding employs fundamental philosophical notions.

      (….) The scientific enterprise comes with philosophical commitments, whether the scientist likes it or not. The scientist needs philosophical ideas, simply because amongst the experimental and mathematical tools in the toolbox of the scientist there are conceptual tools, like fundamental notions. The despairing scientist may ask: ‘Will we ever get an answer?’ The philosopher replies: ‘Not a definitive answer, but a few tentative answers.’ Recall that the philosopher (and the scientist qua philosopher) works with conceptual models. At any one time only a few of these models are in circulation. They cannot provide the definitive answers of which the scientist is fond. But this is typical of models even in the natural sciences. (Weinert, Friedel. The Scientist as Philosopher: Philosophical Consequences of Great Scientific Discoveries. Berlin: Springer-Verlag; 2004; pp. 278-279. )

  4. Meta Capitalism
    February 19, 2020 at 2:31 am

    When we reflect on science—its aims, its values, its limits—we are doing philosophy, not science. This may be bad news for the high priests of scientism, who reject philosophy, but there is no escaping it.

    (….) There is a general agreement that science concentrates on aspects of the world that can be studied through theories that can be tested by doing experiments. Those aspects relate to spatiotemporal patterns in nature, for this is what makes experiments possible. If other dimensions of reality exist, they simply cannot be studied using the methods of the empirical sciences.

    (….) Modern science is an enormously wonderful and powerful achievement of our species, a culturally transcendent, universal method for studying the natural world. It should never be used as an ideological weapon. Scientific progress demands a respect for truth, rigor, and objectivity, three ethical values implied in the ethos of science. We can nevertheless draw different conclusions from our analyses of science, but we should always present them carefully, distinguishing what can be said in the name of science from personal interpretations that must be supported by independent reasons, or acknowledged simply as personal opinions. Our analysis shows that the Oracles differ in important points and are not consistently fighting for a common cause. When they go beyond their science, they use different arguments and arrive at different conclusions.

    We conclude with one final insight. Science is compatible with a broad cross section of very different views on the deepest human problems. Weinberg, an agnostic Jew from New York, shared his Nobel Prize with Abdus Salam, a devout Muslim from Pakistan. They spoke different languages and had very different views on many important topics. But these differences were of no consequence when they came together to do science. Modern science can be embraced by any religion, any culture, any tribe, and brought to bear on whatever problems are considered most urgent, whether it be tracing their origins, curing their diseases, or cleaning up their water. Science should never be fashioned into a weapon for the promotion of an ideological agenda. Nevertheless, as history has shown, science is all too frequently enlisted in the service of propaganda; and, as we have argued in this book, we must be on guard against intellectual nonsense masquerading as science.

    — Karl Giberson and Mariano Artigas (2007) in Oracles of Science: Celebrity Scientists versus God and Religion.

    .
    You are reflecting on science Geoff—its aims, its values, its limits—you are doing philosophy. And then naively claiming you are not doing philosophy.

    • February 19, 2020 at 4:00 am

      OK, one more clarification. I do not claim I’m not doing philosophy, I just don’t want to get hung up trying to sort out the philosophy. I want to get on and do some scientific economics. However some misconceptions are so common and egregious among mainstream economists that I devoted some space to clarifying them. The confusion of mathematics and science is one. The claim that assumptions don’t matter is another.

      I would find this site more interesting if it did less philosophising and more actual analysis of patterns evident in economies. Meta, if read more carefully, rather than just picking bits out of context, you might have understood that.

      • Meta Capitalism
        February 19, 2020 at 6:04 am

        You say you want to get on with “scientific economics” but nonetheless your book contains naive philosophy and religion. I am not arguing with your legitimate claims; only your insistence that you are not doing philosophy when you certainly are. I am reading carefully Geoff as well as watching your dismissal of philosophy while doing philosophy (albeit naively) and then claiming science is just-so story telling. It doesn’t matter whether you claim you are doing philosophy or deny your are doing philosophy; the simple fact is your are naively doing philosophy but lack a critical awareness of what you are doing in you story telling. You are the one who on the one hand introduces naive philosophy into your book and then on the other hand dismisses philosophy as simply not interesting and something you prefer not to do. The problem with science as story telling and naive philosophy is that it is neither good science nor good philosophy let alone good history. For example, take your popular but misappropriation of Taoism and yin and yang. Taoism is a Chinese philosophy and religion or did you not know that? You are simply “think[ing] up ideas to embellish [your] theories” that are fictitious at best. Your Yin and Yang fictitious story-telling hardly tells the truth about the real meaning in context of Taoism or yin and yang.
        .
        Science as sober science is careful; science as story telling is not.

  5. February 19, 2020 at 12:20 pm

    The question was, “What is truth in economics?” and simple answers proposed: Aumann’s “usefulness” and Lars’ “not a lot”, but “Truth ought to be as important a concept in economics as it is in real science”. Geoff sides with Aumann, ‘Meta’ with Lars – as indeed I do. “Stories” (a colloquial term for lies) can be “useful”, at least in furthering self-defence, self-glorification and the aims of liars – like persuading others that their evil [in the economy, usury] is good.

    ‘Truth’ is a word, and Humpty Dumpty had it right: “When I use a word, it means what I choose it to mean – neither more nor less”. So we need to agree on a definition, not childishly assume it means what we think other people assume it means.

    Geoff says “I’ll leave the ‘shallow understanding of science’ for others to judge. I’ve only spent 50 years plus practising it and contemplating the process”. This is not a lie, but the ‘it’ he has practiced is not the whole of ‘science’, just his ‘bit’ of it, and so far he has seemed unwilling to acknowledge that my ‘side’ (not bit) of it IS science. His examined the physical world; my 50 years of information science examined the world of words, including their interaction with the physical world, e.g. how brains/computers work and differ as well as what they are useful for. Geoff is not alone in ignoring the existence of information science. In the 1970s Shannon’s “mathematical” theory was recognised as a breakthrough as significant as that of Newton – and Geoff: far more “useful” (spawning today’s ubiquitous information technology) than a geology (spawning the burning of fossil fuels) that we largely have to live with. Has it been just a coincidence that recognition of it disappeared along with truly Keynesian economics?

    Let me address the question, then. First, we need to distinguish different types of word: adjectives (raw data), nouns (names of variables), adverbs (judgements of processes), verbs (processes) and logic words. Thinking in words is a process and the logic word ‘truth’ a judgement of it. In word logic the definition of the criterion ‘true’ is relative to ‘not true’, so that a true statement (and hence its meaning) is completely different from all those which are not true, hence (in the origins of this) a true wife has never slept with another man. In process logic, if a program is to be capable of delivering its intended outcome, it must not only be true but open to correction if it goes wrong, hence (in its origins) steering (cybernetic homeostasis) and today’s automated navigation (PID error control using information feedbacks).

    In economics, it seems to me, the assumption (or suggestion) is that things are distinct where in fact they are interactive. It is claimed it can be controlled by varying the quantity of money (or by varying the interest rate, the amount of credit available to the people who need it). Keynes having seen in mass unemployment the need to correct errors in the economic process, Malthusians and Logical Positivists have joined in systematically ignoring him – and his contribution in ‘A Treatise on Probability’ (1921) to the transformation of logic after Frege’s arithmetic (1893), Russell’s types (1903) and Whitehead’s dynamic processes (1925). Jung and Chomsky humanised Russell’s types, Shannon our logic and types of communication.

    But of course, this is neither interesting nor fundamental science, is it, Geoff?

    • Meta Capitalism
      February 20, 2020 at 1:16 am

      “Stories” (a colloquial term for lies) … ~ Dave Taylor
      .
      story noun : 1. a description, either true or imagined, of a connected series of events…. 3. a lie. ~ Cambridge Online Dictionary
      .
      [S]cience is … in the business of inventing useful stories, stories that may be rather loose or may be very precise. (Davies, Geoff. Economy, Society, Nature: An introduction to the new systems-based, life-friendly economics. World Economics Association Books Book 3. Kindle Locations 2402-2408).

      .
      I don’t think that Geoff is telling lies. Careless stories perhaps, but not intention lies. There is more than one meaning for the term “story.” No doubt Geoff really believes science is in the business of inventing useful stories whether “loose” or “precise”. And he is right; it is very easy to find examples of story telling in the writings of scientists that are loose with the facts and careless with truth, especially when their fundamental world-view takes fact and truth so lightly that they can self-confidently declare they “can leave the question of what ‘reality’ is ‘behind’ our observations to the metaphysicians and theologians,” and “leave the question of ‘truth’ to others.”
      .
      We can all enjoy a tall story told with panache; we all enjoy a good bullshitter in the right context (in the pub over a few beers):
      .

      There’s a kind of big, outdoor sort of man who’s got no patience at all with prevaricators and fibbers, but will applaud any man who can tell an outrageous whopper with a gleam in his eye.” The gleam in the eye is essential here: it is this complicity between bullshitter and audience which constitutes the “bull session” (On Bullshit, p. 34). Only when it escapes from the bull session and masquerades as regular assertion is bullshit deceptive; however, the insidious nature of this deception degrades the commitment commitment to truth upon which public discourse depends. (Gary Hardcastle, George Reisch. Bullshit and Philosophy: Guaranteed to Get Perfect Results Every Time (Popular Culture and Philosophy Book 24) (p. 152). Open Court. Kindle Edition.)

      .
      Of course implicit in Goeff’s comments is a certain disdain of philosophy and gross stereotype of religion as being essentially a waste of his time. Whenever I see scientists pontificate on ‘truth’ like this my bullshit detector rings load and clear. When truth doesn’t matter to science it is prone to become an ideology (world-view) that conflates fiction and mere speculation with “good, sober, and restrained science on the one hand, and non-empirical metaphysics, fantasy, myth and ideology on the other (Alexander and Numbers 2010, Biology and Ideology: From Descartes to Dawkins).” When scientists engage in story telling with little or no regard for fact or truth they are espousing an ideology “transcending the category of provisional scientific theories … constituting a world-view.’” (Alexander and Numbers 2010, Biology and Ideology: From Descartes to Dawkins, Kindle Locations 4215)
      .

      In dealing with something as large and complex as the universe as it spreads out through space and time, scientists need to remember that they should be agnostic and that their language should exhibit a greater humility than it frequently does…. The record of the past, even of the fairly immediate past, is extremely imperfect. The record is not only a very small sample of the reality, but it is a highly biased sample, biased by durability, for only durable records survive. Hence, we are trying to piece together an enormous pattern, most of which is missing. Any pattern that we think we perceive has a quite strong presumption that it might be wrong. (Boulding 1984: 153)

      .
      When both science and religion become less dogmatic and more tolerant of criticism, philosophy will then begin to achieve unity in the intelligent comprehension of the universe.
      Technically, a scientist has no right to assert that he is either materialist or idealist, for in so doing he has assumed to forsake the attitude of a true scientist since any and all such assertions of attitude are the very essence of philosophy.

      • February 20, 2020 at 11:11 am

        Meta, Geoff’s stories have been trying to simplify the complications of economics for the benefit of new students of it, so I have never believed he was deliberately telling lies: my point was that physical reality is what it is, but in the world of words stories can be lies.

        You make a good point about perception being influenced by the words we use, and great to see you quoting Boulding, of whom J Galtung (with “Only One Quarrel with” him) wrote:

        “”They [Boulding’s two 1984 books] are written by a person whose intellectual trajectory is literally speaking astronomical. Boulding has read so much, seen so much, discussed so much, and in addition to that written so enormously much, that what comes out certainly merits that rare distinction: wisdom”.

        Beware, Meta. Science and religion are bucket labels and dogma is merely definite teaching: like equilibrium in economics, what G K Chesterton called the starting point for heresy. It is people who need to be tolerant of criticism. In my case I can see three starting points, and I have committed myself to the Big Bang theory as most consistent with the historical evidence and what instrumentation has revealed, as allowing me to account for both materialism and idealism. So you need to be tolerant of a scientist’s right to be honest: both about why I am committed and my recognising alternatives.

    • February 20, 2020 at 1:27 am

      Dave, “a *useful* guide to what we can observe”. Not “a practical means to create a new industry”, evil or otherwise. In my professional case a guide to understanding how the Earth works. What “use” such knowledge is put to is a different issue. You over-interpret my brief comments (though not quite as grossly as meta). It’s true I don’t know what you do about information theory. That’s not the same as ‘ignoring’. I doubt it’s really very incompatible with my proposals for better analysis of patterns evident in economies (aka ‘economics’). There seems to be too much presumption of antipathy in these threads – see also Frank’s comment below.

      • February 20, 2020 at 11:15 am

        Geoff, here it is you assuming antipathy in me! See my defence of you above.

    • February 20, 2020 at 3:01 am

      Dave, for once I find something useful in Meta’s comment. “Story” does not imply “lie”. A description of a connected series of events. Either loose or precise: by “loose” I do not mean loose with the ‘truth’ or the ‘facts’, I mean “not precise”, a rough approximation. Rough approximations can be very instructive in some contexts (for how long was there a magma ocean on the Earth early in its history, 10,000 years within an order of magnitude), but other contexts require great precision (fundamental quantities in particle physics, many significant figures).

      • February 20, 2020 at 11:33 am

        Geoff, I’m not a good story teller so apologies for misleading you and indeed for associating you with the general problem that language can be used dishonestly. Let me add that I am by no means against stories as such: I’m just re-reading “Sophie’s World”, which wonderfully yet remarkably accurately summarises for young people the world of philosophy. I was rather less enthusiastic about your story of three people exchanging goods, for in current practice one of the three is a banker and what is actually exchanged is money; but I am sure we will agree: that isn’t as simple as it looks.

      • February 21, 2020 at 12:04 am

        Dave, I get the impression you are not thinking of stories in the general sense of “A description of a connected series of events” but more specifically as idle fancies, arbitrary fictions, even deliberate untruths. Of course a story can be any of those things. But I use it as above, and not as an arbitrary fiction.

        My parable (story) about three people exchanging is quite particular, not ‘just a story’. It is simplified in the sense of getting to an essence, not in the sense of leaving important things out. If you don’t see the connection between that and money (from a bank or otherwise) then you may have missed the essence. And of course banks are covered in Chapter 11.

        A banker is someone who runs a bank. Just because most of them so far have been power-hungry graspers doesn’t mean they have to be. Banking has been monumentally complicated by bankers and ignorant regulators, I’m certainly not oblivious to that. But the essence of what money is, and what a bank can be, are there nevertheless.

      • Robert Locke
        February 21, 2020 at 8:40 am

        A description of a connected series of events”

        All historians deal with reality this way, as in “What are the causes of the First World War,” or “Why and How did the discipline of economics come into existence and develop.” The latter, like most other historically important questions, is a an historically contested field, that is, it has been an object of dispute from the beginning. That dispute is the science of economics, and economist don’t know or don’t want to know much about it. So their discussion is shallow and irritatingly naive.

      • February 21, 2020 at 10:16 am

        I’ve been sad seeing Robert becoming all bitter and twisted about this – apparently after something I said (I know not what) quite innocently a couple of years ago.

        Geoff, when I’ve been quite open about being a committed Christian, so for eighty years used to hearing and reflecting on the meaning of parables, I don’t understand how you could “get the impression” I hadn’t understood your intention. In any case, I did not reject what you had written, I simply said I was “less enthusiastic” about it than about “Sophie’s World” (in particular its treatment of Kant, which though in story form was not “arbitrary fiction” but like yours, a laudable attempt at simplification). I accept your story as an illustration of delay in reproduction for repayment. I am less happy about its suggestion that in a monetary system we become indebted to other individuals rather than the community, and repay in kind rather than by giving credit where this is due.

        Incidentally, you say above ““Story” does not imply “lie”. In logic, as the set of stories includes a set of lies, it does imply the POSSIBILITY of them. A very instructive discussion of different ways of reasoning can be found in Mervyn Hartwig’s “Dictionary of Critical Realism”, under the term “Inference”.

      • Robert Locke
        February 21, 2020 at 11:04 am

        “Dave, I get the impression you are not thinking of stories in the general sense of “A description of a connected series of events” but more specifically as idle fancies, arbitrary fictions, even deliberate untruth”

        I assume Geoff is talking about ” connected series of events” not you Dave. Historians are use to economists not connecing historidal events when discussing their discipline, and their ignoring historians when they correct them. So don’t feel sad for me. Feel sad for economists.

      • February 21, 2020 at 5:59 pm

        Point taken, Robert. Geoff, this from the post proposing “Keynes on Fridays” looks relevant to your parable:

        “Loanable funds theory essentially reduces modern monetary economies to something akin to barter systems — something they definitely are not. As emphasized especially by Minsky, to understand and explain how much investment/loaning/crediting is going on in an economy, it’s much more important to focus on the working of financial markets than staring at accounting identities like S = Y – C – G.”

  6. ghholtham
    February 19, 2020 at 1:17 pm

    Auman expresses a methodological view which resembles that of the logical pragmatists, a largely American school of philosophy. “Useful” is to be understood epistemologically – useful for understanding and organising phenomena, not useful for any ulterior purpose.

    • February 19, 2020 at 7:42 pm

      “Logical pragmatism, or the theory that ‘The truth of a proposition depends upon [is measured by] the value of its consequences’ “. W.P.Montague, in The Journal of Psychology and Scientific Methods, Vol 6, No 17 (August 1909).

      Okay, but this is more than a bit dated. Keynes’ probability theory and Shannon’s Information Science have happened since then. In any case, even usefulness is relative to purpose, and the consequence of a scientific theory not being true is that if one acts on it then it is likely to have negative consequences.

      Truth in my view is complex. It must not only point you near enough in the right direction, it must also be reliable – the theory of this being derived from Shannon.

  7. February 19, 2020 at 3:04 pm

    What Auman really refers to is religion. Religion is a way to navigate life and so are certain branches of economics. The underlying reason for applying religion rather than reasoning is that life is uncertain in a Keynesian sense. Therefore, humans – including economists – somehow have to make sense of a world that is not (completely) accessible by natural science’s tools. Auman chooses religion but calls it (economic) modelling. He should simply be more honest to the world and to himself. :-)

    • February 19, 2020 at 7:46 pm

      “Religion is a way to navigate life”.

      All the more reason then for the religion and economic theory to be true, though religion is more strictly being grateful for the gift of life.

      • February 21, 2020 at 8:08 am

        Kind of agree, but in science on the one hand and in economics as well in religion on the other “truth” is a very different thing. That’s the key takeaway.
        Economics must first get its ontology straight.

  8. Frank Salter
    February 19, 2020 at 3:36 pm

    A major problem with all the discourse on these blogs is that apparently no one is listening to what is said by others. If people worked through what others are saying and tried to reach a consensus then science would be occurring rather the pontificating which is what is frequently happens.

    I have frequently pointed out what real science is with respect to the quantity calculus and dimensional analysis. I am beginning to believe that many economists are either too lazy to go and find out for themselves the truth of what I have been saying or are incapable of understanding what they read. If these are true then it is no wonder that no progress is made in understanding reality.

    If two way conversations occurred than some consensus may be arrived at. Please join in.

    • Yoshinori Shiozawa
      February 20, 2020 at 4:11 pm

      Yes, this page is not a discussion page but a series of monologues. There is no real discussion. There is no hope that a better economics emerges from this page.

      • February 20, 2020 at 9:09 pm

        I have never seen the word ‘monologue’ used in this context, but yes, my dictionary says it can be “a harangue that engrosses conversation”, and a harangue “a loud speech addressed to a multitude; a pompous or wordy address”. Pompous comes out as “solemn affectation of dignity” and affectation as “striving after an appearance of what is not natural or real”.

        So yes, I can see how I might come across this way to you, Yoshinori, but (unlike Meta and Ken) I have gone out of my way to make my points and responses as concisely as possible. As an information scientist I have had to “shout” to get myself heard, and any dignity I have shown in discussing economics has been earned by my professional training and 67 years of interest and original work in the field, despite the incomprehension pioneers almost inevitably meet.

        Frank is right, but moving towards consensus requires us to discuss rather than ignore what we don’t understand, likewise criticism of our own understanding. When you take the trouble to discuss with me the paper I sent you, Yoshinori, I may begin to take your bleating about our discussion of Lars’ blogs more seriously.

      • Yoshinori Shiozawa
        February 21, 2020 at 11:19 pm

        I am perplexed by your mail. I indeed received two sinopses or tables of contents and a paper three years ago (July 2017). How can I discover what you are thinking from these lists of titles? If you think what you are thinking deserves to be widely known, you should write a book after those sinopses. I can understand your idea only when you have amply explained your idea, at least in paper length and preferably in book length. The more novel your idea is, the more acute the necessity to write books is. Until I understand what you are thinking, I can say some definite thing on your ideas.

        I have edited two or three English books and have written several Japanese books. Some are sold quite well (around 10 thousand copies) but I do not think my ideas are easily understood. I’ve got some supporters of my ideas and a few researchers who can develop my ideas. Even though I am still working to be understood by writing papers and editing books (I have no capability to write an English book from scratch).

      • Yoshinori Shiozawa
        February 21, 2020 at 11:30 pm

        Correction: I can say some definite thing on your ideas. >> I can say no definite thing on your ideas.

      • Yoshinori Shiozawa
        February 21, 2020 at 11:58 pm

        Correction: I can say some definite thing on your ideas. -> I can say no definite thing on your ideas.

      • February 22, 2020 at 3:13 pm

        Yoshinori, from my email records it seems I sent my paper to you on 21 Jan 2018, along with this introduction to it:

        “The attached is at least trying to found macroeconomics on fundamental axioms. Choosing energy rather than pre-existing things as the starting point, new capabilities – emerging from self-control (loss of freedom) in one, two then three dimensions – repeatedly create a new starting point, like an arabic number form emerging as tens at each level are carried forward in a higher dimension. In human activities, this PID control emerges in the form of cybernetics, i.e. navigation, but in monetary economics complete control morphs into to a further level with complete freedom to pursue money making, severing the controlling feedbacks. I’ve always said Keynes added the I feedback to the P feedback from the pricing system.

        “I’m happy to be able to share this with you, as from the RWER blog you seem to be an honourable and thoughtful man”.

        You replied you had read only the introduction, and were more interested in what the economy is now than what it ought to be. To show how my thought had been developing, I sent you three (not two as I had remembered) book outlines, to which you reply here:

        “How can I discover what you are thinking from these lists of titles?”

        To which I reply, by wondering why I might think them important enough to write about. It takes two to tango. Did you even look up what is meant by “complex number” and its significance in mapping positions or recognising exogenous side effects in directed motion? Cf. my response to Gerald Holtham above on economic efficiency presuming reliability. Instead of giving up with my abstract, which was introductory, you might have thought to study my conclusions.

        On my need to present my ideas in book or at least in paper form, agreed, but I have yet to find a market for it, or editorial advice on making it intelligible which doesn’t amount to “tell the readers what they wish to hear”. In my own judgement the key concepts of feedback systems cannot be understood except by visualising flow diagrams, but interest in these is most likely to be generated via a dialogue with or posthumous biography by an already recognised authority. I’m thinking of Bryan Magee’s “Men of Ideas” (BBC, 1978), Jamie Morgan interviewing Herman Daly here in PAER90, pp. 137-155, and James Gleick’s excellent biographies of scientists. Back in 1999 I found common ground with Tony Lawson’s Critical Realism. Reading Chapter 4 (on “The Modern Corporation”) in his “The Nature of Social Reality” (2019, Routledge), I have just found him coming to much the same conclusions as I did in the paper I sent you: in his case by considering the UK legal position.

        Apologies for the length of this, folk, but there is a lot to be learned from it.

      • Yoshinori Shiozawa
        February 22, 2020 at 4:06 pm

        There were some confusions about dates for my side.

        Dave > the key concepts of feedback systems cannot be understood except by visualising flow diagrams

        You may be right but there are so many things that are difficult to be understood. I believe you should try to express your thought by whatever means you have in your disposition.

      • February 23, 2020 at 11:57 am

        Thank you for this, Yoshinori. My wife and I squabble all the time, she being sensory and I intuitive. This is irritating, but we’ve learned not to hang on to it as “hard feelings”. In our old age we’re both struggling to find words. It came up when discussing this with our daughters last night that my wife tries to construct meaning out of words she is not always familiar with, whereas I seek to understand the meaning of paragraphs or books as a whole and barely notice the actual words used until trying to construct my own paragraphs. A bit like seeing the significance of a number from the number of digits, whereas she sees the digits and not, say, the significance of the number being odd or even. On the whole, we have come to the conclusion, it helps to have both points of view.

      • February 23, 2020 at 11:28 pm

        Dave I’d be interested to receive a copy of a paper that outlined your ideas, because I don’t have any clear idea of them. Fragmented comments here (by many commenters, not just you) commonly do not enlighten me much. You can find a contact at my website if your don’t have one betternaturebooks.net.au under checkout.

      • February 26, 2020 at 5:52 pm

        Re my comment to Yoshinori on Feb 22 at 3.13 (“Did you even look up what is meant by “complex number”?), this from Boris Johnson’s heterodox chief advisor:

        “Only about 2-3 percent are taught about matrices and ‘complex numbers’ (which many children can grasp between the age of 10-14 but they are not given the chance unless they do Further Maths A Level).”

        https://dominiccummings.com/2014/10/30/the-hollow-men-ii-some-reflections-on-westminster-and-whitehall-dysfunction/

  9. Norman L. Roth
    February 19, 2020 at 10:17 pm

    What on earth are you fellows talking about or talking around ? It’s becoming quite clear that most of you {not all} have any real knowledge of basic economic ideas or of the history of economic thought, evolution of economic ideas, or any understanding of the problem of spurious quantifiability that dogs most perfectly legitimate aspirations to apply mathematics to economics. Not all such attempts can be brushed -off as easily as most of you seem to think. As for junking everything in economic thought back to Aristotle & starting all over again from “basics” ? WELL, It’s amateur hour as in Keynes satirical description of the denizens of the “economic underworld” !
    I had thought that most people who fancied themselves masters of the dark corners of the “dismal science” would have learned something about the eternal folly of imitating other more “truth-seeking” {usually physical} sciences, by simply imposing them on economics. The farcical “physics envy” & slavish imitation of mid 19th century thermodynamics, of the so called “neo-classical” school should have taught all of you a lesson. Not to mention mathematically trained Irving Fisher’s slavish mimicry of Boyle’s Law of gases, to derive his “Quantity theory of Money”. Or the conspiratorial schools of Marxism, & a veritable army of monetary cranks, who call the same old dog-eared fallacies by different names. They were thoroughly & humiliatingly debunked by Keynes, Ralph Hawtry & the British Actual society 90 years ago I can’t help thinking that those who natter away constantly about “What is Truth{said jesting Pilate} are much the same as who natter away about “love”: They are the ones who practice it the least. Don’t take any of this personally. I intend all I have said as an exercise in applied Epistemology .Please GOOGLE: {1 } Norman L. Roth and {2} Norman L. Roth, Economics & {3} Norman L. Roth, Technological Time

    • February 20, 2020 at 3:20 pm

      Norman, if you don’t understand what we are talking about, you would do better to keep your nose out of it. As for myself, junking everything back to Adam Smith’s tutor Hume, whose way of thinking left no room for paths to truth and love, does not mean I am starting again from either Aristotle or Newtonian physics. I have started again from a scientific world that has discovered radio communication, relativity, quantum mechanics, information science and cybernetics, retroduced to the Big Bang, then shown a time ordering in phases of evolution which explains these and still applies in the evolution of economics. This also taught me not to deride our predecessors for not seeing what had not yet been discovered: only teachers who idly take for granted what their teachers had taught them.

    • Meta Capitalism
      February 21, 2020 at 1:32 am

      the eternal folly of imitating other more “truth-seeking” {usually physical} sciences, by simply imposing them on economics. The farcical “physics envy” & slavish imitation of mid 19th century thermodynamics, of the so called “neo-classical” school should have taught all of you a lesson. Not to mention mathematically trained Irving Fisher’s slavish mimicry of Boyle’s Law of gases, to derive his “Quantity theory of Money”. ~ Normal L. Roth

      .
      I think we must take telos and economics seriously. I agree with Roth (2008, 5).

  10. February 20, 2020 at 3:04 am

    This thread is increasingly toxic, with sustained personal attacks from Meta Capitalism, gross over-interpretation of brief statements made here (Dave and Meta), presumption to know what I’m thinking, presumptions about my values and motivations (keeping science separate from metaphysics and religion is certainly not the same as dismissing or disdaining them).

    This is not the first time Meta Capitalism has persistently harassed other commenters with personal characterisations etc, rather than debating the issues. He(?) is making this site toxic for any debate.

    • Meta Capitalism
      February 20, 2020 at 3:23 am

      You are not keeping them separate Goeff (that is flat out obvious in your own words) you are mixing both religion and philsophy with your own ideology and own your own scientism. You don’t like the critique that points this fact out and so you call it toxic. What is clear from reading your book is that you are story telling more than doing science. But you say that flat don’t you:

      There are striking parallels between complex systems and the old wisdom of Taoism, which arose from close observation of nature and of human affairs. The Taoist world view is probably best known for its concepts of yin and yang. Yin and yang are often characterised as the female and male principles, but the Tao view is that all things in life have opposites, or polarities, that are also manifestations of yin and yang. Other examples are dark and light, yielding and resistance, intuition and rationality, contemplation and action. In the Tao view there are times for contemplation and times for action. When the world is stable it may not be a good use of energy to try to force change, but if the world is changing, particularly if it is in crisis, then small actions may have large consequences. (….) Taoism counsels that a life lived only at one polarity will be a restricted life. For a full realisation of potential we should not become stuck in an extreme, but should balance yin with yang. Taoism seems to have distilled an essence from the living world: healthy living systems do not depend on competition alone, nor on cooperation alone, but balance both in varying degrees. (Davies, Geoff. Economy, Society, Nature: An introduction to the new systems-based, life-friendly economics.World Economics Association Books Book 3. Kindle Locations 2109-2118).

      (….) We can leave the question of what ‘reality’ is ‘behind’ our observations to the metaphysicians and theologians. Unfortunately many scientists became enamoured of the idea that science is in the business of ‘reading the mind of God’. It’s another distraction, unless God’s mind is very changeable and context-dependent. So too can we leave the question of ‘truth’ to others. It is apparently a shocking claim to many people that science is not in the business of revealing Truth. Rather, science is, to emphasise the difference, in the business of inventing useful stories, stories that may be rather loose or may be very precise. (Davies, Geoff. Economy, Society, Nature: An introduction to the new systems-based, life-friendly economics. World Economics Association Books Book 3. Kindle Locations 2402-2408).

      — Geoff Davies (2019) Economy, Society, Nature.

      That is clear from reading your book. Your outrage is interesting considering you appropriate Taoism in a shallow scientistic way (a religion no less!) and claim you are leaving ‘truth’ to others. Clearly you meant what you said. That you openly admit science is the business of story telling and then engage in rather ‘loose’ story telling that has little truth in it, I think it is reason enough to point out the inconsistency in this kind of science as story telling.
      .
      Let us not forget that your comments are the context of Lars post about ‘What is truth in economics?’ As you weave truthless story telling in your science I have to wonder again, where is truth in economics if science is nothing more then mere story telling?

    • Yoshinori Shiozawa
      February 20, 2020 at 4:19 pm

      Davies is right. This comment page is not working in a positive way. A simple way to change the atmosphere of the page would be to restrict the number of posts per week, for example two posts per person and per week. Then, there will be less blasphemies. People will post well-considered constructive thought.

      • February 21, 2020 at 11:05 am

        I’m tempted to say “Shiozawa is wrong”, though I’ve been taught to be friendly, Yoshinori, rather than formal.

        “This blog is renowned for its high level of comment discussion. These guidelines exist to further that reputation.
        • Engage with the arguments of the post and of your fellow discussants.
        • Try not to flood discussion threads with only your comments.”

        If one follows the first guideline but finds fellow discussants defending their own agendas by disputing or not engaging with yours, the second guideline – to be fair – will remain merely an aspiration.

        “A simple way to change the atmosphere of the page would be” for contributors to follow the guide-lines, interpreting the second as not flooding the discussion with verbal diarrhea.

      • Yoshinori Shiozawa
        February 21, 2020 at 11:24 pm

        Dave has reminded us a very important thing. Yes, we should keep the guideline.

  11. Ken Zimmerman
    March 11, 2020 at 2:31 pm

    Everything humans do, say, and believe is communal. Humans made themselves communal. They chose to live in communities and to craft their ways of life communally. There’s noting in early human history to indicate there is any “natural” inclination for humans to live communally. That happened 40,000 or 50,000 years ago. Therefore, both truth and lies are communal. At a minimum, truth is communal in that facts (e.g., 1 + 1 = 2, one’s hair or eye color, who is president of the United States) are interpreted in specific community contexts. At a maximum, truth is communal in that we communally categorize certain ideas as factual (e.g., ideas about child rearing or taste or beauty). Similarly, lies, which rely on fabrication and interpretation are also communal. For example, consider the world’s best know liar today — Donald Trump. His lies arise out of a specific community, which also supports and spreads his lies. Along with other subordinate communities. If we wish to study the truth and lies of economists we need to study economists’ communities and associated communities.

  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.