PKT message, On The Definition Of Economic Science

The following Gang8 message of today's date summarizes my views on a subject matter which John Stuart Mill addressed, inter alia, as follows:

"The definition of a science," John Stuart Mill wrote, "has almost invariably not preceded, but followed, the creation of the science itself. [...] And, in truth, there is scarcely any investigation in the whole body of science requiring so high a degree of analysis and abstraction, as the inquiry, what the science itself is; in other words, what are the properties common to all the truths composing it, and distinguishing them from all other truths.[...] The definition of a science must, indeed, be placed among that class of truths which Dugald Stewart had in view, when he observed that the first principles of all sciences belong to the philosophy of the human mind." ('On The Definition Of Political Economy; And On The Method Of Investigation Proper To It', Essays on Some Unsettled Questions of Political Economy, London, Longmans, Green, and Co, 1877, pp. 120-122 - underlining added.)

Gunnar

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David Hume, who viewed Newton as "the greatest and rarest genius that ever rose for the ornament and instruction of the species," summed up Newton's contribution to epistemological clarity in the field of modern physical science as follows:

"While Newton seemed to draw off the veil from some of the mysteries of nature, he shewed at the same time the imperfections of the mechanical philosophy; and thereby restored her ultimate secrets to that obscurity in which they ever did and ever will remain."

That is to say, our minds are not equipped to know nature's "ultimate secrets" - something which Socrates taught long before either Newton or Hume.

For some reason, the vast majority of modern top-rank theoretical physicists seem to take personal exception to this Socratic view of their intellectual capacities.

So they have fashioned an alternative statement of the facts of the matter which, unlike the unvarnished Socratic truth, is not as grating on their egos - what is best known as Karl Popper's falsification criterion for distinguishing "science" from "pseudo-science".

Well, not really "science" in the original meaning of the Latin root of the word - for the "falsification" restatement of our irredeemable ignorance is accompanied by the grudging acknowledgement that, yes, Socrates, Newton, and Hume were right on the point at issue.

Why "grudging"?

Because, as noted in a recent message on the Keynes/Popper concept of "truth", it is an article of faith among most top-rank theoretical physicists that, while we may never know the "truth", the falsification modus operandi of modern science is a means of moving us ever closer to the "truth".

Einstein, who (a) did more pure theoretical science than any half-dozen of his twentieth-century peers combined, and (b) understood the epistemological aspects of his own work and that of others, took a completely different view as also noted earlier.

Briefly, if it turns out to be the case that the field "axiom" is found to be inadmissible, then Einstein cheerfully acknowledged that "out of my whole castle in the air - including the theory of gravitation, but also most of current physics - there would remain almost nothing."

In economics, the situation is roughly as follows.

1. Economics is a man-made system with ever-changing empirical manifestations.

2. Only a fool - or Rational Expectation Theorist - will try to reduce the latter to Newton-like formulae.

3. Yet, there is an element of logic in the man-made system that is Entrepreneurial Production, involving (a) Suppliers of Factor Services, (b) Entrepreneurs, and (c) Credit whereby the two sides interact in the Production Process.

4. That element of logic is "utterly beyond falsification".

5. With that - key - element of logic in hand, all the rest is common sense - that is to say, we can only do the best we can.

Gunnar