Re: more squiggly lines

[Alan G Isaac <aisaac@xxxxxxxxxxxx>]

On Tue, 30 Jul 2002 17:54:32 -0400 Gunnar Tomasson <gunnar.tomasson@xxxxxxxxxxx> wrote:
> I have long been persuaded (a) that the Achilles Heel of modern economics
> resides in its methodological pre-suppositions; (b) that the single most
> important thereof is the pre-supposition that causal relations between
> economic variables may be divined from econometric equations; (c) that it is
> useless to engage academic economists in debate on this key methodological
> aspect of all modern economics; whence it follows (d) that, as prelude to
> exposing the shallowness of (b), few things are likely to be more potent
> than a knock-out blow to the like methodological pre-supposition in
> theoretical physics.


So you want to start by explaining to physicists why their
incredibly successful project cannot possibly be justified
methodologically!  Does not some little brain nook start
to giggle when you catch yourself saying such things?
Since you read philosophy of science, you must be aware
that in the 20th century enough people---including philosophers
of science---started giggling at such hubris that the entire
foundationalist project collapsed and was replaced not by
a pervasive skepticism but by a growing pragmatism.

If physicists represent causal relations in the world in ways that you
think are not methodologically justified, so what?  They are
succeeding in doing much more to make the world better off than are
the philosophers of science who critique them.  I am personally
startled that mathematicians hold (as most do) a Platonist conception
of mathematical objects, but so what?  They are advancing mathematics;
I am not.  And even supposing I am right that they are working with a
serious misconception of the nature of mathematical objects, it does
not follow that if I could persuade someone of my view s/he would do
better mathematics!

During the 20th century, it is fair to say, philosophers of science as
a group learned enough humility to focus on *learning* from scientists
rather than dictating to them.  Of course not everyone learned that
lesson.

Finally to economics.  It is of course true that there is a great
distance between econometric equations and what we know about the
world (and surely an even great distance from the "true facts,"
however useless such an observation is for functioning in the world of
experience).  That they remain useful for both understanding and
prediction is much more surprising than it is in physics (where it was
surprising enough that some people thought it must reflect the mind of
god at work).  And yet we can estimate a price elasticity of demand
for cigarettes and get a quite reasonable estimate of the revenues
that will be raised, the change in the quantity of cigarettes smoked,
and even the number of people who will quit as the result of a tax
increase.  In addition, we *because* the models are explanatory,
we can critique them discover ways to improve them (e.g., by better
accounting for substitutes, smuggling, etc.).  I laugh as hard as
anyone when econometricians pretend that they are estimating the
"true" parameters of the structure of the economy, but I have also
noticed that if you actually talk with econometricians they seldom
hold such naïve views as the textbooks suggest.  Like everyone else
they are grappling with such tools as they find useful to understand
and explain a complex, shifting world that fortunately has enough
exploitable regularity in it that our struggles lead us to get better
at dealing with it.

Alan