Re: Paul D. on this year's Nobel

[Ted Winslow <egwinslow@xxxxxxxxxx>]

James Juniper wrote:

> When Carabelli and De Vecchi draw a distinction between sources of
> beleif and reasons for holding a belief, they follow Keynes in applying
> logical analysis to the rational principles of valid thought. People
> fall back on caprice, whim, sentiment and convention to resolve
> situations of radical uncertainty. So I don't think their argument
> contradicts what Keynes explicitly claims about the "rational" way of
> dealing with uncertainty or what he explicitly says in A Treatise on
> Probability about both rational beliefs and rational reasons for
> holding beliefs.

Keynes distinguishes between the reasons for holding a rational belief
and other kinds of reasons for holding a belief.  The former, according
to the argument he makesin A Treatise on Probability, are "logical" i.e.
they are directly known "logical probability relations."

As I showed, he explicitly claims in the Treatise that many actual
beliefs are not "rational" in this sense.

Carabelli and De Vecchi themselves point this out:

“However, there is also an objective dimension in thinking. The
assumption of the approximate uniformity of human minds allows us to
abstract from those elements that vary from man to man, and to say
‘what, apart from peculiar circumstances, a man ought to think and
feel’. This is the reasonable aspect of thinking, the domain of logic
(Keynes, 1905a).9 [Note 9 'From the beginning Keynes clearly
distinguished between what we ought to, and what we can, think and feel.
In his view, ‘we ought’ does not mean that ‘we can’. He frequently
stressed that ‘we ought but we can’t’, pointing out a sort of fragility
of the will.'] The ‘objectively valid’ dimension of thought is what
Keynes investigated in A Treatise on Probability. For him ‘logic
investigates the rational principles of valid thought’, which form the
basis for rational belief, action and choice (Keynes, 1921, p. 3).
Although Keynes could allow a role for psychology, he also maintained
that one could say what a rational individual ought to think, on the
grounds of logic." (p. 276)

So Keynes - as early as his undergraduate years - distinguished
"rational" belief, i.e. belief self-consciously rooted in the "rational
principles of valid thought," from actual beliefs which may not be and
often are not "rational" in this sense.  He explicitly denies that "the
reasons for holding a belief are always rational" if by this you mean
that beliefs are always rational.  Moreover, since the rationality of a
belief depends on it's "source" (the source of a rational belief must be
knowledge and use of the "rational principles of valid thought") beliefs
having a source other than this - e.g. beliefs whose source is "pure
instinct" or "irrational associations of ideas" (VIII, pp. 14-15) - are
not and cannot be rational.

Keynes went to the trouble of arranging in his will for the publication
of an essay which explicitly claims that "the view that human nature is
reasonable" is "flimsily based" and "disastrously mistaken," that this
view ignores that there are "insane and irrational springs of wickedness
in most men."  In his economics, he explicitly claims that the "vast
majority of those who are concerned with the buying and selling of
securities know almost nothing whatever about what they are doing."  In
particular, they "know almost nothing whatever" about the "rational
principles of valid thought," i.e. "they lack even the rudiments of what
is required for a valid judgment."  (If, by the way, they knew and were
making use of the "rational principles of valid thought," they wouldn't
be "the prey of hopes and fears easily aroused by transient events and
as easily dispelled" since, as Keynes explicitly points out, "transient
events" do not provide a relevant basis for expectations of the long run
future; they are irrelevant "news.")

Since, for Keynes, a rational belief is a "valid judgment," the beliefs
of those who "lack even the rudiments of what is required for a valid
judgment" will usually not be "rational."

This is true of what he calls "conventional" beliefs.  For these to be
rational beliefs, they would have to be "valid judgments."  Keynes makes
it about as clear as it can be made, however, that they are not "valid
judgments."

In the case of expectations about the long run future, for example, the
"valid judgments," according to Keynes, are that it will be different
both from the past and  from anything we could predict. These are the
"rational" beliefs individuals "ought" to hold, i.e. the beliefs that
follow from "the rational principles of valid thought."

Those who resort to "conventions," however, believe that, "contrary to
all likelihood," it will be like the past and that they can, on this
basis, predict it.  These beliefs are inconsistent with "the rational
principles of valid thought" and are, therefore, not "rational" in
Keynes's sense.  The "reasons" they are held are psychological rather
than rational.

This is also true of "the conventional belief in the stability and
safety of a money contract."  This belief is not "rational," according
to Keynes, because it is "rational," for the reasons Keynes gives in the
Tract (IV, pp. 6-10), to expect inflation.  The belief is also not
"sensible."

To constitute a "rational" response to "uncertainty," "conventional"
beliefs and feelings would have to be based on "the rational principles
of valid thought," they would have to be "valid judgments."  Since they
are not "valid judgments," they are not "rational."

According to Keynes, it will only "be rational to allow caprice to
determine us," where we validly and consciously believe that future
consequences of alternative courses of action are unknown and where
there is a known valid reason other than knowledge of these consequences
for doing something rather than nothing (e.g. "to avoid being in the
position of Buridan's ass" XXIX, p. 294).

Ted