Not sure if you are asking me, but I will respond anyway.
Any ‘study’ that attempts to predict the outcome of a system, is a ‘science’ (though we can argue ‘pure’ verses ‘applied’ and ‘natural’ verse ‘social’); any item given artifical rules and definitions (no matter how useful) is a language.
Programming is a language, math is a language, French is a language. Extreamely useful (programming ‘talks’ to computers, math ‘talks’ to science, French talks to well, French), but not science.
Exactly so, EEMan. Logic is another language.
I would agree 110%
So what I was trying to address with the question about modern physics is whether there’s still a meaningful distinction between purely rational and purely empirical approaches to knowledge. There are a number of modern sciences–economics, computer science, cognitive psychology–where the distinction is extremely blurred. Hell, there are even respectable arguments for empirical mathematics.
String theory is not terribly empirical, but no one seems to insist that it may never be. How is economics any different?
Sure, that’s reasonable. But in that case the people who are collecting economic data and testing their models against it are empirical scientists, aren’t they?
The theories put forth Austrian and Chicago schools can be, and are, examined through empirical study. The Austrian school may rely on an introspective approach to come up with its theories, or be deendent upon praxiology, but the Austrian school is not the whole of economics.
Albert Einstein relied primarily on logic and deductive reasoning to come up with the general theory of relativity (and, to a lesser extent, the special theory.) Nonetheless, were I to say that physics is not an empirical science, you would think I was insane. The theory of relativity is not all of physics, and while it was created deductively, it has been (very extensively) TESTED empirically. And many, many other aspects of physics were inductively discovered.
So it is with economics; it is flat-out nonsense to suggest it’s not an empirical science. The study of economics is so full of empirical data it’ll drown you. To reject - or, as you seem to want to do, refuse to even examine - empirical evidence that challenges your deductions is simply unscientific. (It actually sounds quite Marxist.) And, I might add, spreads ignorance.
“Economics” seems to be treated much of the time either as something people see only on television, wherein some “economist” claims to be able to predict how the unemployment rate is going to be in August, or as a sort of ideological battle between various proponents of economic-political positions.
Actual economic study in an actual school is largely a neverending examination of mounds of empirical data to test hypotheses.
No one said that it is. But its tenets are deductively derived from, as you indicate, praxeological axioms. The impression that I got from your post was that your professors had never even mentioned to you those theories, and that empiricism was all you had to know. You certainly may examine Austrianism with empiricism, but that examination is not itself Austrianism.
I have not said that economics is not an empirical science. I have said that reliable economics is not an empirical science in any case in which it contradicts the deductions made by Austrianism and that I would reject such a contradiction. A physicist would do no less if he encountered a theory that contradicted the laws of mathematics, say a theory that contradicted the Induction Axiom. At least, I hope he would.
So if the real world data contradicts your theory, you won’t give it up? That’s a profoundly anti-scientific attitude.
The real world data cannot contradict a sound deduction. It is metaphysically impossible. You are positing, for example, that someone might find a circle on a flat plane whose circumference/diameter ratio is something other than pi.
Maybe, but the Austrian school’s axioms are pretty solid. Unless you’d like to attack the axiom “humans act.” Mises logically deducted his entire masterwork, Human Action, from this one axiom. Or maybe, if you want to attack Menger’s axioms, you could try disproving “humans prefer more of a good to less,” or “humans prefer a good sooner rather than later.”
At this point, it’s time for a tl;dr point. This is Hans Hoppe’s excellent explanation of the role of empiricism in economics, from the introduction to Democracy: The God That Failed
"If one is to make a rational choice among . . . rival and incompatible interpretations [of historical events and social empirical data], this is only possible if one has a theory at one’s disposal, or at least a theoretical proposition, whose validity does not depend on historical experience but can be established a priori, i.e. once and for all by means of the intellectual apprehension or comprehension of the nature of things. In some circles this kind of theory is held in low esteem; and some philosophers, especially of the empiricist-positivist variety, have declared any such theory off-limits or even impossible. This is not a philosophical treatise devoted to a discussion of issues of epistemology and ontology. Here and in the following, I do not want to directly refute the empiricist-positivist thesis that there is no such thing as a priori theory, i.e., propositions which assert something about reality and can be validated independent of the outcome of any future experience.[10] It is only appropriate, however, to acknowledge from the outset that I consider this thesis - and indeed the entire empiricist-positivist research program, which can be interpreted as the result of the application of the (egalitarian) principles of democracy to the realm of knowledge and research and has therefore dominated ideologically during most of the twentieth century, - as fundamentally mistaken and thoroughly refuted.[11] Here it suffices to present just a few examples of what is meant by a priori theory - and in particular to cite some such examples from the realm of the social sciences - in order to put any possible suspicion to rest and recommend my theoretical approach as intuitively plausible and in accordance with common sense.[12]
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Examples of what I mean by a priori theory are: No material thing can be at two places at once. No two objects can occupy the same place. A straight line is the shortest line between two points. No two straight lines can enclose a space. Whatever object is red all over cannot be green (blue, yellow, etc.) all over. Whatever object is colored is also extended. Whatever object has shape has also size. If A is a part of B and B is a part of C, then A is a part of C. 4 = 3 +1. 6 = 2 (33 - 30). Implausibly, empiricists must denigrate such propositions as mere linguistic-syntactic conventions without any empirical content, i.e., “empty” tautologies. In contrast to this view and in accordance with common sense, I understand the same propositions as asserting some simple but fundamental truths about the structure of reality. And in accordance with common sense, too, I would regard someone who wanted to “test” these propositions, or who reported “facts” contradicting or deviating from them, as confused. A priori theory trumps and corrects experience (and logic overrules observation), and not vice-versa.
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More importantly, examples of a priori theory also abound in the social sciences, in particular in the fields of political economy and philosophy: Human action is an actor’s purposeful pursuit of valued ends with scarce means. No one can purposefully not act. Every action is aimed at improving the actor’s subjective well-being above what it otherwise would have been. A larger quantity of a good is valued more highly than a smaller quantity of the same good. Satisfaction earlier is preferred over satisfaction later. Production must proceed consumption. What is consumed now cannot be consumed again in the future. If the price of a good is lowered, either the same quantity or more will be bought than otherwise. Prices fixed below market clearing prices will lead to lasting shortages. Without private property in factors of production there can be no factor prices, and without factor prices cost-accounting is impossible. Taxes are an imposition on producers and/or wealth owners and reduce production and/or wealth below what it otherwise would have been. Interpersonal conflict is possible only if and insofar as things are scarce. No thing or part of a thing can be owned exclusively by more than one person at a time. Democracy (majority rule) is incompatible with private property (individual ownership and rule). No form of taxation can be uniform (equal), but every taxation involves the creation of two distinct and unequal classes of tax-payers vs. tax-receiver-consumers. Property and property titles are distinct entities, and an increase of the latter without a corresponding increase of the former does not raise social wealth but leads to a redistribution of existing wealth.
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For an empiricist, propositions such as these must be interpreted as either stating nothing empirical at all and being mere speech conventions, or as forever testable and tentative hypotheses. To us, as to common sense, they are neither. In fact, it strikes us as utterly disingenious to portray these propositions as having no empirical content. Clearly, they state something about “real” things and events! And it seems similarly disingenious to regard these propositions as hypotheses. Hypothetical propositions, as commonly understood, are statements such as these: Children prefer McDonald’s over Burger King. The world-wide ratio of beef to pork spending is 2:1. Germans prefer Spain over Greece as vacation destination. Longer education in public schools will lead to higher wages. The volume of shopping shortly before Christmas exceeds that shortly after Christmas. Catholics vote predominantly “Democratic.” Japanese save a quarter of their disposable income. Germans drink more beer than Frenchmen. The United States produces more computers than any other country. Most inhabitants of the U.S. are white and of European descent. Propositions such as these require the collection of historical data to be validated. And they must be continually re-evaluated, because the asserted relationships are not necessary (but “contingent”) ones; that is, because there is nothing inherently impossible, inconceivable, or plain wrong in assuming the opposite of the above: e.g., that children prefer Burger King to McDonald’s, or Germans Greece to Spain, etc… This, however, is not the case with the former, theoretical propositions. To negate these propositions and assume, for instance, that a smaller quantity of a good might be preferred to a larger one of the same good, that what is being consumed now can possibly be consumed again in the future, or that cost-accounting could be accomplished also without factor prices, strikes one as absurd; and anyone engaged in “empirical research” and “testing” to determine which one of two contradictory propositions such as these does or does not hold appears to be either a fool or a fraud.
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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. Living standards can be higher only despite higher taxes and regulations. Similarly, theoretical insights can rule out reports such as that increased consumption has led to increased production (economic growth), that below-market-clearing (maximum) prices have resulted in unsold surpluses of goods, or that the absence of democracy has been responsible for the economic malfunctioning of socialism as nonsensical. As a matter of theory, only more saving and capital formation and/or advances in productivity can lead to increased production, only guaranteed above-market-clearing (minimum) prices can result in lasting surpluses, and only the absence of private property is responsible for the economic plight under socialism. And to reiterate, none of these insights requires further empirical study or testing. To study or test them is a sign of confusion.
From Hoppe:
“A priori theory trumps and corrects experience (and logic overrules observation), and not vice-versa.”
Amen and amen.
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.
“A larger quantity of a good is valued more highly than a smaller quantity of the same good.”
Really? You need water, right? OK, I’ve got 27 million cubic meters of water right here, please sign for delivery. How about beef carcasses? Those are valuable, right? I can dump 270,000 beef carcasses on your front lawn by next tuesday.
As much as I see your point, you’re going to descend into a debate about what a “good” is. If we define a “good” as something we value, then 1 pound of the stuff is a “good”, but 5 tons is not, since we don’t value it (or we value it less, making it a different “good”).
These seem like extremely naive simplistic statements to me. Clearly they could be misinterpreted or else refuted empirically. You’re going to have a lot of trouble defining a “good” sufficiently for these axioms to hold universally.
Suppose I deliver one wide-screen TV to you. We agree that that would be a “good,” no? How about if I deliver 1 million wide screen TVs to you, but you lack the secure warehouse to hold them. Even if you manage to drag a dozen into your house, the rest clog your street, get rained on, cars hit them and the drivers sue you, the city fines you, environmental protection lawsuits, etc. Not so empirically “good,” more like an empirical disaster. Now, suppose instead that we delay the delivery for a month, which gives you time to set up deals, and get the secure warehouses set up in exchange for a cut of the sales. Wouldn’t you prefer that “good” later rather than sooner?
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?
For reference, Menger’s defintion of a good:
Things that can be placed in a causal connection with the satisfaction of human needs we term useful things. If, however, we both recognize this causal connection, and have the power actually to direct the useful things to the satisfaction of our needs, we call them goods.
If a thing is to become a good, or in other words, if it is to acquire goods-character, all four of the following prerequisites must be simultaneously present:
1. A human need.
2. Such properties as render the thing capable of being brought into a causal connection
with the satisfaction of this need.
3. Human knowledge of this causal connection.
4. Command of the thing sufficient to direct it to the satisfaction of the need.Ah, so my point still holds true. 1 lb of sauerkraut satisfies my need for food. 10,000 lbs of sauerkraut satisfy my need for food in exactly the same manner, yet I still prefer 1 lb of sauerkraut to 10,000.
While I have great respect for the Austrian school, I know of no serious economist who honestly believes that the entirety of Austrianism is as certain a set of laws as mathematics. That is, frankly, just not true, and is self-contradictory with respect to the Austrian school’s emphasis on the unknowable complexity of economic systems. The Austrian business cycle theory, to use one example, is a theory that works only insofar as you assume the original premises were valid - which in that particular example is not absolutely certain. Mises’s business cycle theory must be established through empirical study, not accepted as axiomatic.
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?” But it’s foolhardy to think the two-step-away conclusions can’t be overturned by objective evidence. It’s that thinking that made Marxism so popular, or that had physicsts believing in ether for so long, or that made geologists refuse to accept continental drift.
A degree of a priori agreement is necessary for any science, but science is still based on the examination of empirical evidence. Will has already cited one that is demonstrably false, if interpreted literally: “A larger quantity of a good is valued more highly than a smaller quantity of the same good.” He also claims this:
That is simply not axiomatic. In some conspicuous items, lowering the price will likely reduce demand, not increase it, such as designer clothes.
Or to use another example, I actually have an associate who is part owner of a golf course just north of Toronto. The course didn’t start out well, struggling to fill the tee times, so a consultant with experience in the industry was hired. The consultant immediately recommended they raise their prices from their fairly moderate level to a somewhat more hoity-toity price - not a huge amount, but a significant jump.
Demand went up.
The reason, as I understand it, was that serious business-type golfers avoid regular play on courses with moderate pricing, as they fear the courses will be packed with the hoi palloi. To use Yogi Berra’s line, nobody goes 'cause it’s too crowded. We could play the same game with “people want a good now, not later” - that’s clearly not always true. I am not hungry now; I would like a prime rib later, but I don’t want it now. (Will goes on to cite many things that are obviously statements of belief, not geniune axioms.)
Even if there’s just a few examples of demand for a good going down if prices go down, or vice versa, it’s simply NOT axiomatically equivalent to mathematics.
I know little about economic theory but I see a problem in Economics as a study in the feedback between economics and politics. Whenever an economically powerful group gets squeezed by economic factors its members put pressure on politcians to change the rules.
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.”
But these further definitions of “good” open up a cascade of new terms. What are “satisfaction of a need,” “knowledge,” and “command?” This will lead to an infinite regress where we define (and redefine) terms until they match what we empirically observe. This will creap out of the realm of deduction, and into the realm of description.
Some examples to illustrate what I am saying:
What if I don’t actually “need to satisfy” my desire. Sure, I like sauerkraut, but I’ve never eaten it in any circumstance where I wouldn’t have been ok without it. Doesn’t that make these axioms useless for describing the vast majority of economic transactions (in the U.S.) which have nothing to do with a need to satisfy a desire? And if not, then we’re going to need one of these long definitions for “need” as well.
What if I never really think about what I’m buying – I just buy a bunch of stuff that holistically makes me feel like I’m a certain kind of person. But none of the individual things that I’m buying are individually causally connected to my need to satisfy the desire to be that kind of person. I don’t need arm bands to feel like an Xtreme bicyclist, nor do I need a hat, nor do I need the handgrips, nor do I need the energy bars, kous-kous, or fresh-squeezed juices, but somehow, all together, they provide just enough of that gnarly atmosphere that all my friends think I’m a shredder. And do these things make me a shredder, or does my being a shredder make these things good? Where is the causal connection? How can his deductive model apply to all these economic transactions if he is going to require “knowledge of a causal connection.”