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The Forum > General Discussion > Is Economic Science Possible?

Is Economic Science Possible?

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It is also a false dichotomy to argue that something is *not* science because it *is* philosophy. Both historically and epistemologically, science has come out of natural philosophy. For example Newton’s famous work explaining the law of gravitation was entitled “Mathematical Principles of Natural Philosophy”.

To give an example of my 3rd proposition, say we want to grow wheat in a ploughed paddock. Our two factors of production are seed and superphosphate. Adding super will *increase* production up to a point. But thereafter any further addition of super causes a *reduction* in output. Same with seed. Therefore holding all other factors constant, we *cannot indefinitely increase output by indefinitely increasing one factor.* That’s the proposition.

Spare me the semantic quibbles about “optimum” or “constraints”, and personal argumentation based on attributions of my supposed bad faith. Go ahead and give a real-world example of where we can *indefinitely increase production by increasing one factor of production while holding all the other factors constant *.

Or kindly admit that the three propositions are universally true; and let me proceed to demonstrate how we can make logical deductions about axioms of human action that provide scientific explanation and rational proofs and of economic phenomena.
Posted by Peter Hume, Monday, 18 April 2011 7:49:06 AM
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Hume, I think you have it backwards.

If observations do not fit the 'theorem', then yes, the observations need to be tested again to make sure that they are correct. They are not ignored completely.

But this is beside the point, we are not arguing about trigonometry or surveying here.

Your 3 'universally true' basic propositions are not universal.

You think that you have shown that you can derive axioms of human action? Not by a long shot, tell us one oh wise one.

The three basics summarised thus:
1) humans are mortal
2) preferences exist
3) There is a maximum amount we can produce of any given product at any given time.

While preference exist, it does not logically follow mean that there are always preferences and that preference applies to everything.

Nevertheless, that you think that you can logically derive universally true statements about human action from these three basics akin to mathematical theorems that are never wrong, and that it is the observations that are wrong, shows that you don't really understand science.

If several surveyors consistently come up with observations that do not fit the mathematical theorems they use, then the observations deserve further attention, and if the observation hold it would prove that the theorems do not hold universally. That their observations always hold to the theory (so far) speaks to the strength of the theory. That you think you can make a 'logical' science and not have to worry about those pesky observations not fitting is an archaic form of philosophy. Ancient science perhaps, not any modern understanding of the field.

If you think that there are logically derivable universally true axioms that are true about human economic activity, then lets have one. And please make it useful and about economics, not about human mortality or whatever.

Economic modeling often starts with assumptions about what is considered true and then deduces from there. That real-world observations rarely fit the predictions thus derived is no surprise. I see no difference in that approach and what you are proposing.
Posted by Bugsy, Monday, 18 April 2011 8:23:17 AM
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At the risk of getting caught in the crossfire, I couldn't help but notice a slight flaw in Peter Hume's first "axiom".

>>1) physics imposes limits on human action<<

This can only be theoretically true, since it is impossible to prove empirically. For example, the time it takes for a human being to run 100 metres keeps getting shorter. It is not possible, even with all the information that we have about the human body, to guess when this progress might come to a halt.

Of course, this might not in itself be a problem. You could throw your arms in the air and say "that's stupid, of course there is a limit". But the other "axioms" rely to a certain extent on the validity of the first, which puts it under some additional pressure.

>>2) these limits result in universally true propositions about human action<<

If we knew what those limits were, this might be possible. But we don't. The best we can say is "the existence of hypothetical limits..." which weakens the entire logical structure.

And by the time we get to the last one...

>>3) we can make logically valid deductions from such axioms<<

...we should be more than a little concerned about the stability of our logical house of cards.

There are of course some theorems that behave perfectly under any kind of pressure, but this is by no means evidence that all theorems conform to this standard. So to argue that because Pythagoras "proves that science can be based on logical deductions from axioms", as Peter Hume did earlier, does not lead to the conclusion that "anything-we-choose-to-call-science" has a similarly solid foundation.
Posted by Pericles, Monday, 18 April 2011 9:27:43 AM
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Peter, part of the fun of OLO is to try to understand and anticipate where the author is going and by what route they intend getting there. I personally think OLO’ers are quite talented at this, which is why it is one of the most challenging forums.

Sometimes the means of getting to the point can be tortuous. It can be direct, indirect, conditional or indirect-post indexed. Your initial post was pretty direct and you declared up front how you wanted get there, which was good, but not where you wanted to go, which was a “tease”.

Unfortunately, your route and objective were spotted early on and you were headed off at the pass, ambushed actually. After that you lost the initiative and were jammed into tactical defense.

If you wish to make the case that there is a discipline we could call “economic science”, “domestic science” or even “political science”, what is the purpose of such a proposition? What is it you wish to impart to economists from the scientific domain? How does this change the function they perform? And do you expect us to assign scientific skill sets to say an economist?

Would it mean that someone employed as an economist could not only create the economic case for the development of a “proton driven hyperspace drive”, but could also “produce” it? Yes it would however, that person would be trained as an economist “and” a scientist and not an economic scientist.

Would it redefine the skills of say, Ross Garnaut and make him an “economic scientist” rather than just an economist?

All the human domains have cross dependencies, particularly with economics, that’s the way we humans made them however, to try to make a case for a “hybrid” discipline without context and relevance seems odd.

I also note that you again try to redefine human “domains”. You now assign “natural” where science does apply and “artificial” where it doesn’t. This is news to me.

TBC:
Posted by spindoc, Monday, 18 April 2011 1:43:13 PM
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Continued;

Whilst we are on the subject “redefinitions”, Could you please stop mixing up Laws (of nature) with rules (man made). It might suit your case but is becoming almost malicious.

There is no such thing as man made “natural” domain, otherwise we would be God. Nature, physics the universe is not and can never be man made. Conversely, there is no such thing as an “artificial” man made domain where science does not apply? Not only is science one of those domains but all domains “use” scientific output in some way. Not really sure where you are trying to go with that Peter?

I think you may be having trouble understanding the nature of human created “domains” or are finding it difficult to make your case “because” of them. As a result you are constantly trying to change or redefine them to make your case, which incidentally, you have still failed to declare. (Are we heading for an “indirect post indexed” with a surprise at the end?).

You can, and you do, try hard to redefine what we all understand science to be. It is a human created domain; it is a set of skills, tools, math and technology that we are developing in order to better understand our natural world. It already embraces an astonishing variety of scientific “techniques”, many of which you have already mentioned and many more we add on an almost daily basis.

They are all man made, as are all the other skill and discipline domains we humans have created. These domains also describe everything about us, our societies, our technology, our politics and what we understand about our environment. They describe us.

So why do you wish to change elements of the definition of what it is to be human?
Posted by spindoc, Monday, 18 April 2011 1:44:30 PM
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My opponents are reduced to arguing that humans might be immortal, or that observations might disprove Pythagoras’s theorem.

Okay. And by the same token the moon might fly out of its orbit tomorrow; or observations might prove that 2 + 2 = 9 if you say so.

But you don’t conclude thereby that physical science is impossible, do you?

By the way, my Oxford English Dictionary defines “science” thus:
“1. (arch.) knowledge. 2. Systematic and formulated knowledge… 4. … natural science, one dealing with material phenomena and based mainly on observation, experiment, and inductions, as chemistry, biology;… pure science, one depending on deductions from self-evident truths, as mathematics, logic…”

Your mistake is in thinking
a) that the scientific methodology of the natural sciences is the *one and only* model of scientific methodology for all sciences. As the OED shows, and as I have shown, that is not so.
b) that “economic science” must mean *empirical* economic science. You are quite right in saying economics is not a science in that sense, and the pretensions of positivist economists such as Ross Garnaut or Ben Bernanke are false.

But that doesn’t mean economic science is not possible. It just means their empirical methodology is wrong - because all human data are *subjectively* motivated. It means the scientific methodology proper to economics is *logical* not *empirical*.

If you can’t give any real-world examples of human actions disproving my three universally true propositions – and be honest, you can’t, else you would have done so immediately – it means I have proved,
and my opponents have been COMPLETELY UNABLE to disprove that
• science can use logical deductions from axioms
• science does not necessarily, and does not by definition require empirical testing of hypotheses
• the fact that we cannot have final knowledge does not preclude the possibility of science
• we are capable of identifying axioms of human action in consequence of natural scarcity
• we are capable of valid logical deductions therefrom
• therefore economic science is possible.

Q.E.D.
Posted by Peter Hume, Tuesday, 19 April 2011 7:37:02 AM
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