Karl Popper (who wrote the Logic of Scientific Discovery) and Thomas Kuhn (who wrote the structure of scientific revolutions) approached the problem of knowledge in the domain of DISCOVERY, which we call the physical sciences. At the same time, the CLOSE FRIEND of Karl Popper, Friedrich Hayek, worked on the problem of hubris in the social sciences. Hayek ended up combating Keynes over the frailty of models and reason. Keynes wrote ‘A Treatise On Probability” and then the “General Theory” which led to the governmental use of economic calculation that all of us live under, by trying to solve for unemployment – something Hayek (correctly) stated was not possible in the long run and would lead (as it has) to our bankruptcy. Hayek stated that traditional knowledge that was handed down, and perpetuated by trial and error, was ‘true’ even if we did not understand it rationally as yet. And that our record of rational judgment was exceedingly frail, and that history was filled with examples (past and present) of ridiculous scientific error. Keynes won in the short term however, because his theory solved the problem of socialism by replacing a false pretense of REASON (a managed economy), with the false pretense of PROBABILITY ( a monetarist economy) in the field of national economics. In other words, Keynes gave politicians power over our economies. The power that has led us to our financial crisis.
BOTH Popper and Hayek were countering two problems. A) the use of the fairly new field of statistical analysis and it’s limitations at prediction due to what Nassim Taleb calls the LUDIC FALLACY. And B) the rise of Socialism, and the socialist hubris of central planning . These men, plus Hayek’s mentor Ludwig von Mises, effectively undermined and predicted the impossibility of a socialist economy. Both men stated that human minds are frail and capable of very limited reason and prediction. More importantly, that the Anglo RECORD OF WHAT WORKS, or EMPIRICISM, is a superior form of KNOWLEDGE to the French (and then Marxian) fantasy of RATIONALISM. The fact that the average american does not understand this by doctrinare education difference is probably equal to the use of today’s mysticism in Islam or medieval christianity. It is a means of keeping people ignorant. We have attempted to replace mysticism with science without also teaching history (mythology) which teaches us the error of hubris. We do not teach history because in a pluralistic society, history includes value judgments and value judgements are class, race, and culture judgements. However, aside from class, race and culture, we are taught only the error of the churches, without the errors of silly scientists who were little better than shaman. We did not teach our children HUBRIS. Greek mythology teaches one lesson above all others: Hubris.
To the physical sciences, which is the process of DISCOVERY of what EXISTS already, is the objective of study. The holy grail is to discover the first-causal properties of the physical universe. To economists, the problem is one of INVENTION. This is called Hume’s problem, or the problem of induction. That is, what can humans INVENT given their current state of knowledge. THe problem of economic science, which is the ONLY social science we yet possess, is similar to climate science in complexity, yet additionally more complicated because there is no process of EQUILIBRATION in the intellectual world. (there is no human equivalent to the law of thermodynamics – there is in fact, energy added to the system. We call it ‘increases in production’.) Nor is time constant. In fact, that’s what productivity does: it creates more ‘time’ by using less of it to produce more calories. Instead, of an equilibrium as in nature, the mind of man invents new ideas all the time from permutations of existing patterns and disrupts all attempts at equilibria.
Both forms of our theories, whether physical science or economic science, can only be tested by FALSIFICATION. Unless you can stipulate ACTIONS by which we can prove climate hypothesis false, they are not in fact, scientific. For example, Einstein said that the absence of red shift would falsify one of his theories.
The first principle of Greek Rationalism is SKEPTICISM as a warning against HUBRIS. Hubris is a danger because of the cognitive biases humans of necessity possess because we attribute higher value to that which we study most.
TRUTH IN SCIENCE IS PREDICTION AND FALSIFICATION. Models are not truth. They are tools for rationalizing data. The carpenter may not understand the metallurgy of his chisel. He may not understand the distribution channel for his wood. The scientist is often using chisels and wood that he or she does not understand. If he or she understood, then he or she would understand that the peer review process CANNOT WORK. DOES NOT WORK, and QUANTIFIABLY, given the record, DOES NOT WORK. Furthermore, he or she would understand that only FALSIFICATION, not correspondence with a model, is the means of proving a theory.
Since these two problems DISCOVERY (Physical Science) and INVENTION (induction) are the two fundamental problems of the universe, it is not surprising that we are still incompetent at both.
What is surprising is that in both PHYSICAL SCIENCE and in ECONOMIC SCIENCE, the cognitive bias we bring to our studies, in which we confuse the practical utility of the limited tools and methods of our craft, consistently overwhelms and suppresses the knowledge that in fact, out tools are rough approximations with very poor records of prediction. And that only a combination of prediction and falsification demonstrate the veracity of any theory in either domain.
A financier who violates one of these principles, or a lawyer, or a craftsman, is held accountable for violating the ethics of his craft. With free speech, comes the same ethical constraint on Physical and Economic scientists. That is because there is HARM put upon populations whenever our work products are put into the public domain such that they may be used for the purpose of policy. The reason is, that all public policy is the application of VIOLENCE: the forcible taking of resources and the coercion of individual behavior under the treat of violence. The scientist or the economists is appealing for the application of violence to his purposes.
Therefore, a scientist is operating ethically by publishing FACTS. He or she is NOT operating ethically when he publishes theories or predictions unless the theory is accompanied by falsification. Failure to include how to falsify one’s theories is by definition a form of deception.
If we made it possible to sue scientists the way we can sue doctors and CEO’s then no doubt the quality of work would increase dramatically. And the fact that we cannot sue scientists for the harm that they cause, puts them in the realm with fortune tellers and astrologists.