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Sloppiness, multi-senseism, storytelling: Thriving in the thickness of confusion

... economics is a big omnibus which contains many passengers of incommensurable interests and abilities. (Schumpeter, 1994, p. 827)

 

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... he [Adam Smith] disliked whatever went beyond plain common sense. He never moved above the heads of even the dullest readers. He led them on gently, encouraging them by trivialities and homely observations, making them feel comfortable all along. (Schumpeter, 1994, p. 185)

 

But though the Wealth of Nations  contained no really novel ideas and though it cannot rank with Newton's Principia  or Darwin's Origin  as an intellectual achievment, it is a great performance all the same  .... (Schumpeter, 1994, p. 185)

 

With Smith economics had a clumsy start and, despite great performances of whatever sort, fell further back over the long haul in comparison to physics and biology.

 

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A good principles of economics teacher is a good storyteller. (Colander, 1995, p. 169)

 

Another danger is that you may ‘precise everything away’ and be left with only a comparative poverty of meaning. ... Such a problem was avoided, said Keynes, by Marshall who used loose definitions but allowed the reader to infer his meaning from “the richness of context.”  (Coates, 2007, p. 87)

 

What a tricky business this all is! In his Treatise on Money,  Mr. Keynes told the world that savings and investment are only equal in conditions of equilibrium; that an excess of investment over saving means rising prices, and vice versa. In his General Theory, he told us that saving and investment are always equal, and that this is a mere identity or truism, without significance for the determination of prices. As far as I can make out, there are relevant and important senses in which all these statements are each of them right and each of them wrong. (Hicks, 1939, p. 184)

 

This is the articulate methodological commitement to inconclusivenes that, on a deeper level, unites economists of all camps: "... there are relevant and important senses in which all  these statements are each of them right  and each of them wrong. " Many senses  make no sense  at all. However, empirical and logical inconclusiveness quite effectively secured the ecological niche of Political Economy as a separate science. Demarcation does not work in the "thickness of confusion" (Suppes, 1968, p. 654). Contradictory statements are reconciled routinely by relating them to one of the following distinctions: short run/long run, ex ante/ex post, identiy/equality. Inconclusiveness helps passably against outright refutation. With regard to empirical testing the committment to inconclusiveness implies the — self-defeating — assertion that in economics no experimentum crucis  is feasible. All questions that cannot possibly be decided by experiment are out of science in the first place.

 

 ... you cannot prove a vague theory wrong. (Feynman, 1992, p. 158)

 

With enough fog emitted, almost anything becomes possible. (Mirowski, 2013, p. 344)

 

... nothing is clear and everything is possible. (Keynes, 1973, p. 292)

 

You can define anything you want but as a sage once said  “A rose by any other name will smell as sweet!” (P. Davidson, RWER-Blog, July 2, 2013)

 

For, on principle, we may call things what we please. (Schumpeter, 1994, p. 598)

 

This is a tough question to adjudicate on scientific grounds since the issue is largely definitional and, as Lewis Carroll pointed out, everyone is entitled to his own definitions. (Blinder, 1987, p. 131)

 

Let us mean by current income  the value of current output, ... (Keynes, 1933, p. 699)

 

... twentieth-century neoclassical theory resembles nothing so much as the child's game of Mr. Potatohead – the fun comes in mixing and matching components with little or no concern for the coherence of the final profile. (Mirowski, 1995, p. 294)

 

Trying to pin down down the essential ideas is sometimes difficult because neoclassical economics always seems to be a moving target. (Boland, 1992, p. 213)

 

Since it is true that everybody is free to define whatever appears to be appropriate it seems that a definition could not pose any real problem. This, indeed, is not  true because the full freedom of definition holds but for the first  definition. The subsequent definitions must be consistent with their predecessors. This continously restricts the freedom of definition. It is by no means the case that anything can be defined as desired. This is a methodological illusion  that is rather widespread among economists.  It explains, for the most part, the discipline's state of manifest confusion. A consistent and agreed-upon framework of concepts is indispensible. Keynes's aforementioned determination of income, for example, invalidates the General Theory  and all   its legitimate and illegitimate offshots (IS–LM, AD–AS) in one  sentence (see Keynes's Missing Axioms  URL or Why Post Keynesianism is Not Yet a Science  URL). 

 

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We know from the history of science that entrenched classificatory schemes and misleading descriptive vocabularies have impeded scientific advance as much or more than the complexities and observational inaccessibility of the subject matter. (Rosenberg, 1980, p. 114)

 

As was standard with Marshall, the narrative told one story, the mathematics another. (Mirowski, 1995, p. 299)

 

Is it not a fact, which stares at us from the histories of all sciences, that it is much more difficult for the human mind to forge the most elementary conceptual schemes than it is to elaborate the most complicated superstructure when those elements are well in hand? (Schumpeter, 1994, p. 602)

 

The only way to arrive at coherent languages is to set up axiomatic systems implicitly defining the basic concepts. (Schmiechen, 2009, p. 344)

 

The currently prevailing pattern of economic theorizing exhibits the following three characteristics: (1) a syncopated style of argument fluctuating back and forth between literary and symbolic modes of expression, (2) naive translation, or the loose paraphrasing of formulae into sentences, and (3) loose verbal reasoning for certain aspects of theoretical argumentation where explicit symbolic formulation is lacking. (Dennis, 1982, p. 698)

 

Thus, economics is apparently the study of the economy, the study of the coordination process, the study of the effects of scarcity, the science of choice, and the study of human behavior. One possible conclusion to draw from this lack of agreement is that the definition of economics does not really matter. (Backhouse and Medema, 2009, p. 221)

 

The truth is, most persons, not excepting professional economists, are satisfied with very hazy notions. (Fisher, quoted in Mirowski, 1995, p. 86)

 

I think it is the lack of quite sharply defined concepts that the main difficulty lies, and not in any intrinsic difference between the fields of economics and other sciences. (von Neumann, quoted in Mirowski, 2002, p. 146 fn. 49)

 

Precision and rigor in the statement of premises and proofs can be expected to have a sobering effect on our beliefs about the reach of the propositions we have developed. (Hutchison, 1960, p. xxiii)

 

There is no rigor and precision in the definition of income and profit since two centuries. The reach of conventional propositions is null. That is more than sobering.

 

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To be sure, economics may perform a valuable social role without adding any significant understanding to knowledge of the economy – a “good myth,” economically speaking, can work not only in primitive tribal cultures but also in modern societies. ... Indeed, ... the religious function may have been the most important role throughout the history of modern economics since the Enlightenment. (Nelson, 2006, pp. 300-301)

 

Myth, well told, is still the most convincing way to explain how the world and humankind came to be in their present form. To recall, Zeus was the god of sky and thunder. He oversaw the universe, assigned the various gods their roles, and was known for his erotic escapades. Zeus was emotional, spontaneous and had a lot of trouble with other gods, goddesses and humans. At Prometheus, for example, he was angry for three things: being tricked on sacrifices, stealing fire for man, and for refusing to tell him which of his children would dethrone him. To handle his problems, Zeus regularly fell back to chicanery, force and violence (for an overview see Wikipedia URL). Since antiquity, everybody "understands" Zeus and he easily provokes like/dislike. Purified from all religious connotations, Greek myth is the stuff psychology,  literature, soap-operas, blogs, newspapers, and history are made of until today. Let us call this all-embracing panorama of human motives and actions the gossip model of the world. It affords immediate access to subjective understanding which, however, is barely distinguishable from a projection. With the gossip model everything and its opposite can be explained. That makes it both popular and preposterous. Utility maximization is the economist's reduced version of the gossip model. Science started the very day when Greek philosophers threw the gossip model out of the window.

 

... observed acts of behavior allow an indefinite number of interpretations regarding the plans from which they are assumed to have sprung. (Morgenstern, 1941,

p. 381)


Now, at any rate, we have an explanation for why the assumptions of economic theory about individual action have not been improved, corrected, sharpened, specified, or conditioned in ways that would improve the predictive power of the theory. None of these things have been done by economists because they cannot be done. The intentional nature of the fundamental explanatory variables of economic theory prohibits such improvement. (Rosenberg, 1992, p. 149)

 

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Economics as a discipline faces the following alternative. If it wants to be accepted as a science it has to stick to the rules. The rules are quite simple: material and logical consistency. No excuses (complexity, Duhem-Quine, etcetera). If economics cannot deliver on principle it has to join the Geisteswissenschaften/humanities and try its luck with Verstehen/understanding.  Feynman defended the standards in quite certain terms: "You don't like it? Go somewhere else!"  Since J. S. Mill spoke excusatory of Political Economy as inexact and separate science, economists attempted to water down the rules and to tergiversate material or logical consistency or both. Lower standards or Verstehen can by its very nature not lead to much more than to a gossip model of the world. Homo oeconomicus may be replaced by the far more realistic homo socialis; this improvement, though, still remains within the confines of the gossip model and is not sufficient for a better understanding of how the economy works. No behavioral approach whatever is adequate. It is not a question of realism, it is a question of methodology. There is no such thing as an inexact and separate science. There is no hiding behind complexity. There is only science and nonscience. The Unity of Sciences does not mean unity of science and its look-alikes.

 

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The solution consists in replacing  behavioral assumptions, both  the sloppy and the axiomatized ones, by structural axioms. Structural axiomatization has the accessory advantage of putting off muddleheads, commonsensers, wishwashers, smatterers,  storytellers, and all those "whom any discovery that brought quietus to a vexed question would inevitably vex because it would end the fun of arguing around it and about it and over it" (Peirce, 1931, 5.520). Structural axiomatization strictly excludes the explanation or prediction of human behavior. Hence there is no empty talk about it.

 

Filibuster economics may indeed have performed a multitude of useful social roles but this is of no consequence for its scientific status. Social utility is not a criterion for the assessment of a theory. Sloppines, incoherent definition, green cheese assumptionism and self-protecting inconclusiveness is detrimental to  the growth of knowledge. Social utility cannot exculpate scientific junk.

 

A Supreme Being would have no need for axioms, but they are often found quite useful for mere men. (Strotz, 1953, p. 390)

 

More specific: The rigor and objectivity of structural axiomatization is needed in order to abandon the endemic sloppiness of economic argument and finally to advance from proto-science to science.

 

 

References
Backhouse, R. E., and Medema, S. G. (2009). On the Definition of Economics. Journal of Economic Perspectives, 23(1): 221–233.

Blinder, A. S. (1987). Keynes, Lucas, and Scientific Progress. American Economic Review, 77(2): 130–136. URL

Coates, J. (2007). The Claims of Common Sense. Moore, Wittgenstein, Keynes and the Social Sciences. Cambridge, New York, NY, etc.: Cambridge University Press.

Boland, L. A. (1992). The Principles of Economics. Some Lies my Teacher Told Me. London, New York, Ny: Routledge.

Colander, D. (1995). The Stories We Tell: A Reconstruction of AS/AD Analysis. Journal of Economic Perspectives, 9(3): 169–188. URL
Dennis, K. (1982). Economic Theory and the Problem of Translation (I). Journal of Economic Issues, 16(3): 691–712. URL

Feynman, R. P. (1992). The Character of Physical Law. London: Penguin.
Hicks, J. R. (1939). Value and Capital. Oxford: Clarendon Press, 2nd edition.

Hutchison, T.W. (1960). The Significance and Basic Postulates of Economic Theory. New York, Ny: Kelley

Keynes, J. M. (1933). Mr. Robertson on "Saving and Hoarding". Economic Journal, 43(172): 699–712. URL

Keynes, J. M. (1973). The General Theory of Employment Interest and Money. The Collected Writings of John Maynard Keynes Vol. VII. London, Basingstoke:

Macmillan.

Mirowski, P. (1995). More Heat than Light. Cambridge: Cambridge University Press.
Mirowski, P. (2002). Machine Dreams. Cambridge: Cambridge University Press.

Mirowski, P. (2013). Never Let a Serious Crisis Go to Waste. London, New York, Ny: Verso.

Morgenstern, O. (1941). Professor Hicks on Value and Capital. Journal of Political Economy, 49(3): 361–393. URL

Nelson, R. H. (2006). Economics as Religion: From Samuelson to Chicago and Beyond. Pennsylvania, PA: Pennsylvania State University Press.

Peirce, C. S. (1931). Collected Papers of Charles Sanders Peirce, volume I. Cambridge, MA: Harvard University Press. URL

Rosenberg, A. (1980). Sociobiology and the Preemption of Social Science. Oxford: Blackwell.

Rosenberg, A. (1992). Economics - Mathematical Politics or Science of Diminishing Returns? Chicago, IL: University of Chicago Press.

Schmiechen, M. (2009). Newton’s Principia and Related ‘Principles’ Revisited, volume 1. Norderstedt: Books on Demand, 2nd edition.
Schumpeter, J. A. (1994). History of Economic Analysis. New York, Ny: Oxford University Press.

Strotz, R. H. (1953). Cardinal Utility. American Economic Review, 43(2): 384–397. URL

Suppes, P. (1968). The Desirability of Formalization in Science. Journal of Philosophy, 65(20): 651–664.

 

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See also: Confused Confusers: How to Stop Thinking Like an Economist and Start Thinking Like a Scientist  URL

 

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