# Is economics an empirical or an "axiomatic-deductive" science? **URL:** \ **Category:** Great Debates\ **Created:** [March 23, 2006, 2:04pm UTC](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583 "2006-03-23T14:04:22Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![Lemur866](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/lemur866/32/434_2.png) [@Lemur866](https://boards.straightdope.com/u/Lemur866)\ **Post date:** [March 24, 2006, 12:21am UTC](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583/41 "2006-03-24T00:21:45Z")
OK, what if I wanted one true scotsman, but instead I got 5274 of them, all wearing kilts and eating porridge and playing bagpipes? ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [March 24, 2006, 1:35am UTC](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583/42 "2006-03-24T01:35:48Z")
If something is purely axiomatic, is it science? I mean, do we call mathematics “science”? Economics at least pretends to be based on empirical reality, but there tends to be a lot of shaky assumptions in economics as taught. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [March 24, 2006, 2:17am UTC](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583/43 "2006-03-24T02:17:55Z")
> [@jawdirk](#): > > These explain Menger’s position on the sauerkraut issue – he is saying that the sauerkraut has to be in your pantry ready to be put on your sausage, and your stomach has to be growling, for it to count as a “good.” It wasn’t my intention to defend Menger’s defintion, just to post it so we knew what we were talking about. In fact, that’s what I meant when I said we’d “descend” into a debate about what a “good” is. “Descend”, as in start a discussion that I think most people will lose interest in. Me included. 🙂 ---
**Author:** ![Contrapuntal](https://avatars.discourse-cdn.com/v4/letter/c/e274bd/32.png) [@Contrapuntal](https://boards.straightdope.com/u/Contrapuntal)\ **Post date:** [March 24, 2006, 3:08am UTC](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583/44 "2006-03-24T03:08:43Z")
> [@yBeayf](#): > > I’ve always had a problem with this one. There are many instances where I would definitely prefer a smaller quantity of a good to a larger quantity of it. Given the choice between paying $1 for one pound of sauerkraut, and $1 for five tons of sauerkraut, I’ll choose the pound. Having ownership of one pound of sauerkraut is infinitely more useful to me than having ownership of five tons of sauerkraut, and I value it accordingly. If sauerkraut is going for $1 a pound, I assume that money is a viable currency. Why woud you\* not\* want something that you could convert to $10,000 for an investrment of $1? ---
**Author:** ![ultrafilter](https://avatars.discourse-cdn.com/v4/letter/u/3d9bf3/32.png) [@ultrafilter](https://boards.straightdope.com/u/ultrafilter)\ **Post date:** [March 24, 2006, 3:15am UTC](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583/45 "2006-03-24T03:15:08Z")
> [@Contrapuntal](#): > > If sauerkraut is going for $1 a pound, I assume that money is a viable currency. Why woud you\* not\* want something that you could convert to $10,000 for an investrment of $1? You have to be prepared to do that conversion. Going into business selling sauerkraut isn’t a walk in the park. ---
**Author:** ![Contrapuntal](https://avatars.discourse-cdn.com/v4/letter/c/e274bd/32.png) [@Contrapuntal](https://boards.straightdope.com/u/Contrapuntal)\ **Post date:** [March 24, 2006, 3:28am UTC](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583/46 "2006-03-24T03:28:45Z")
> [@ultrafilter](#): > > You have to be prepared to do that conversion. Going into business selling sauerkraut isn’t a walk in the park. Fine. Sell it a huge discount. The point is money can be exchanged for goods. Why pass up a chance to make a little money at no risk? ---
**Author:** ![yBeayf](https://avatars.discourse-cdn.com/v4/letter/y/e274bd/32.png) [@yBeayf](https://boards.straightdope.com/u/yBeayf)\ **Post date:** [March 24, 2006, 4:38am UTC](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583/47 "2006-03-24T04:38:36Z")
> [@](#): > > If sauerkraut is going for $1 a pound, I assume that money is a viable currency. Why woud you not want something that you could convert to $10,000 for an investrment of $1? What **ultrafilter** said. If 5 tons of sauerkraut suddenly showed up on my doorstep with a note saying I owned it, I wouldn’t think “hey, free money!”, I’d think “how the fuck am I going to get to work with all this sauerkraut blocking my door (and my neighbor’s door, and possibly the freeway which is 20 feet from my doorstep)”. ---
**Author:** ![TJdude825](https://avatars.discourse-cdn.com/v4/letter/t/dec6dc/32.png) [@TJdude825](https://boards.straightdope.com/u/TJdude825)\ **Post date:** [March 24, 2006, 4:44am UTC](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583/48 "2006-03-24T04:44:59Z")
> [@Jonathan Chance](#): > > ‘If you lined up all the economists they’d point in different directions.’ Or, "If all the economists in the world were laid end to end, they would not reach a conclusion. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [March 24, 2006, 4:45am UTC](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583/49 "2006-03-24T04:45:29Z")
> [@yBeayf](#): > > What **ultrafilter** said. If 5 tons of sauerkraut suddenly showed up on my doorstep with a note saying I owned it, I wouldn’t think “hey, free money!”, I’d think “how the fuck am I going to get to work with all this sauerkraut blocking my door (and my neighbor’s door, and possibly the freeway which is 20 feet from my doorstep)”. You don’t seem to understand. If your actions contradict the axioms, there is something wrong with you, not the axioms. 😃 ---
**Author:** ![Contrapuntal](https://avatars.discourse-cdn.com/v4/letter/c/e274bd/32.png) [@Contrapuntal](https://boards.straightdope.com/u/Contrapuntal)\ **Post date:** [March 24, 2006, 4:54am UTC](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583/50 "2006-03-24T04:54:51Z")
> [@yBeayf](#): > > It still breaks down. Let’s say that 1 lb of sauerkraut is a good, because I value it. 5 tons of sauerkraut is nothing more than a great quantity of this good (10,000 of it, to be exact). If a greater quantity of a good is always valued more than less of a good, then how is it that I prefer 1 lb of sauerkraut to 10,000 lbs of it? Because you are assigning a value to money in the first case and ignoring it in the second case. > [@](#): > > If 5 tons of sauerkraut suddenly showed up on my doorstep with a note saying I owned it, I wouldn’t think “hey, free money!”, I’d think “how the fuck am I going to get to work with all this sauerkraut blocking my door (and my neighbor’s door, and possibly the freeway which is 20 feet from my doorstep)” How about if it showed up in a walkin refrigerater you owned, conveniently packed in 1 pound boxes? And Octoberfest had just started. ---
**Author:** ![yBeayf](https://avatars.discourse-cdn.com/v4/letter/y/e274bd/32.png) [@yBeayf](https://boards.straightdope.com/u/yBeayf)\ **Post date:** [March 24, 2006, 4:59am UTC](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583/51 "2006-03-24T04:59:15Z")
> [@](#): > > How about if it showed up in a walkin refrigerater you owned, conveniently packed in 1 pound boxes? And Octoberfest had just started. Well, then I might be happy to have it, but it’s irrelevant. As things stand right now, I’d be happy to have a pound of sauerkraut in my possession and pissed off to have 5 tons of it. Even if I could sell it and make some money, I probably wouldn’t want to – it would be more hassle than it’s worth. And yes, that does mean I’d be turning down “free” money. ---
**Author:** ![Contrapuntal](https://avatars.discourse-cdn.com/v4/letter/c/e274bd/32.png) [@Contrapuntal](https://boards.straightdope.com/u/Contrapuntal)\ **Post date:** [March 24, 2006, 5:11am UTC](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583/52 "2006-03-24T05:11:49Z")
> [@yBeayf](#): > > Well, then I might be happy to have it, but it’s irrelevant. As things stand right now, I’d be happy to have a pound of sauerkraut in my possession and pissed off to have 5 tons of it. Even if I could sell it and make some money, I probably wouldn’t want to – it would be more hassle than it’s worth. And yes, that does mean I’d be turning down “free” money. O.K. Thanks for the response. ---
**Author:** ![hawthorne](https://avatars.discourse-cdn.com/v4/letter/h/c89c15/32.png) [@hawthorne](https://boards.straightdope.com/u/hawthorne)\ **Post date:** [March 24, 2006, 6:17am UTC](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583/53 "2006-03-24T06:17:17Z")
Rightly or wrongly, Austrian economics isn’t very influential. Most professional and academic economists barely know what it is. They’ve read Hayek’s _Information_ paper and Menger on the orgins of money, and that’s about it. Modern economists accept the Austrians point about the impossibility of socialist calculation and then - to the bewilderment of the Austrians - happily build models that assume the calculation is quite possible. The neoclassical types (and most others) don’t mind because they see themselves as building models to do economics. Models are always wrong. They start from incorrect assumptions and use imperfect data to reach predictions that will be wrong. But better than nothing. And that’s one ongoing difficulty with economics: “something beats nothing” vs “looking for the keys under the lamp-post because the light’s better than where I dropped them”. Sure, prediction is not really possible in economics. But if the US auto industry asks me how a change in China’s coal tariff will affect it, I can - with the aid of a neoclassical general equilibrium model and some data - make a much more sensible guess than no guess at all. But of course, when I’m wrong, it won’t be really clear whether it’s because some big shock (a big earthquake) came and changed things or because my theory is tractable, but wrong. It’s amusing to note that in the substantial chunk of some bloke quoted by **WillMagic** , there are a couple of glaring errors: > [@](#): > > As a matter of theory, only more saving and capital formation and/or advances in productivity can lead to increased production This is rubbish. It would only be true if all prices adjusted instantaneously. (How fast do they adjust? Empirical question. Why do they adjust at different speeds in different markets? Theoretical question. Are unions a major cause of these nominal rigidities? Empirical question. Why are contracts of employment long term and incomplete? Theoretical question…) > [@](#): > > If the price of a good is lowered, either the same quantity or more will be bought than otherwise. This is an empirical regularity. Theory in fact tells us that upward sloping demand curves could exist (Giffen goods). That’s model-building neoclassical theory, of course. ---
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [March 24, 2006, 12:17pm UTC](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583/54 "2006-03-24T12:17:54Z")
To be fair, those were used as examples of a priori logical propositions as opposed to post priori empirical statements. It makes no difference to his point whether they are true or false. “2 + 2 = 5” is as much an a priori proposition as “2 + 2 = 4.” ---
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [March 24, 2006, 12:23pm UTC](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583/55 "2006-03-24T12:23:08Z")
> [@RickJay](#): > > I’d be willing to accept that some of the lower order Austrian conclusions pretty much have to be accepted as valid, before we get into Clintonesque arguments like “people prefer more utility to less, well, whaddya mean by utility?” That’s all that I’m saying. So long as the premises are reasonable, and the inferences are drawn in accordance with rules applied to well formed formulas, I accept the conclusion reached — no matter whether I agreed with it before or not. After all, if reason did not trump experience, we could not account for optical illusions. That said, if an argument is merely valid but not sound, then it is not sufficiently compelling to cause me to reject contradictions out of hand. Not all of the Austrian school (and certainly not all of the Chicago school) is good deduction. But that which is, is definitively reliable. I’m not sure that you and I disagree at all, frankly. ---
**Author:** ![Shalmanese](https://avatars.discourse-cdn.com/v4/letter/s/45deac/32.png) [@Shalmanese](https://boards.straightdope.com/u/Shalmanese)\ **Post date:** [March 24, 2006, 1:57pm UTC](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583/56 "2006-03-24T13:57:18Z")
> [@](#): > > A larger quantity of a good is valued more highly than a smaller quantity of the same good. Even money doesn’t work like this. There have been many cases of a person winning the lottery and having their life ruined as a result. ---
**Author:** ![RickJay](https://avatars.discourse-cdn.com/v4/letter/r/bb73d2/32.png) [@RickJay](https://boards.straightdope.com/u/RickJay)\ **Post date:** [March 24, 2006, 1:58pm UTC](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583/57 "2006-03-24T13:58:03Z")
> [@Liberal](#): > > That’s all that I’m saying. So long as the premises are reasonable, and the inferences are drawn in accordance with rules applied to well formed formulas, I accept the conclusion reached — no matter whether I agreed with it before or not. After all, if reason did not trump experience, we could not account for optical illusions. That said, if an argument is merely valid but not sound, then it is not sufficiently compelling to cause me to reject contradictions out of hand. Not all of the Austrian school (and certainly not all of the Chicago school) is good deduction. But that which is, is definitively reliable. I’m not sure that you and I disagree at all, frankly. We don’t now, I just needed this expansion of your position. I have some interesting thoughts on this but I’ll have to post them later because I’m holding a baby right now. ---
**Author:** ![hawthorne](https://avatars.discourse-cdn.com/v4/letter/h/c89c15/32.png) [@hawthorne](https://boards.straightdope.com/u/hawthorne)\ **Post date:** [March 24, 2006, 2:26pm UTC](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583/58 "2006-03-24T14:26:17Z")
> [@Liberal](#): > > To be fair, those were used as examples of a priori logical propositions as opposed to post priori empirical statements. It makes no difference to his point whether they are true or false. “2 + 2 = 5” is as much an a priori proposition as “2 + 2 = 4.” I really don’t see how you could get that from this (my emphasis) > [@](#): > > According to the approach adopted here, theoretical propositions like the ones just cited are accepted for what they apparently are: as statements about **necessary facts and relations. As such, they can be illustrated by historical data, but historical data can neither establish nor refute them.** [13] To the contrary. Even if historical experience is necessary in order to initially grasp a theoretical insight, this insight concerns facts and relations that extend and transcend logically beyond any particular historical experience. Hence, once a theoretical insight has been grasped it can be employed as a constant and permanent standard of “criticism,” i.e., for the purpose of correcting, revising, and rejecting as well as of accepting historical reports and interpretations. **For instance, based on theoretical insights it must be considered impossible that higher taxes and regulations can be the cause of higher living standards.** […] **And to reiterate, none of these insights requires further empirical study or testing. To study or test them is a sign of confusion.** ---
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [March 24, 2006, 2:30pm UTC](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583/59 "2006-03-24T14:30:24Z")
> [@hawthorne](#): > > Rightly or wrongly, Austrian economics isn’t very influential. Most professional and academic economists barely know what it is. They’ve read Hayek’s _Information_ paper and Menger on the orgins of money, and that’s about it. Can you speak to why they haven’t read _Human Action_, the very source of derivation for the school? ---
**Author:** ![Liberal](https://avatars.discourse-cdn.com/v4/letter/l/848f3c/32.png) [@Liberal](https://boards.straightdope.com/u/Liberal)\ **Post date:** [March 24, 2006, 2:33pm UTC](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583/60 "2006-03-24T14:33:25Z")
> [@hawthorne](#): > > I really don’t see how you could get that from this (my emphasis) But that wasn’t one you included in your post. In fact, Hoppe himself dealt with that one specifically, stating that living standards can only be higher _despite_ higher taxes; i.e., there is some cause to the higher living standard other than higher taxes. [Previous page](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583.md?page=2) [Next page](https://boards.straightdope.com/t/is-economics-an-empirical-or-an-axiomatic-deductive-science/349583.md?page=4)